Watch out for Spotify

“These are the problems the entire industry is facing, with every service and every app: discovery, revenue sharing, bigger catalogs, more users, and better ads to serve them. That’s where the competition is going to happen.”

There are many companies in audio, but only three key platform-level players in music, podcasts, and other media: Apple, Google, and Spotify. (In a year, Amazon could enter this list if it wants to, and really, it should.)

Sleeping giants

On its face, Apple and Google are the two that are most relevant to publishers. Not only do they have deeper roots in online news and the app ecosystem, but both companies are making big moves.

Apple has acquired Pop Up Archive, a podcast search company, and the audio recognition service Shazam. With the acquisitions, Apple shores up its position as the leader in digital music and runaway leader in podcasts — and keeps key assets out of its competitors’ hands. When it delivers its long-promised analytics suite for podcasts, Apple will be in a position to make publishers and advertisers very happy. Search opens up all kinds of new possibilities for consumers, publishers, and advertisers, from better discovery tools to sophisticated, weblike programmatic advertising. This will definitely be applied to audio, and could be used in video too. Apple has a huge first-mover advantage in podcasts, plus an enormous user base. There may be other players in the market, but Apple doesn’t want to share.

Google, on the other hand, has more and better advertising tools than almost anyone else, and YouTube gives it a huge advantage in video. Its parent company Alphabet is set to merge Google Play and YouTube Music with YouTube Red, its subscription video service, folding all three into a subscription service under the YouTube brand codenamed “Remix.” Google Play has a tiny footprint in podcasts right now, but the extra visibility they might get under the new service with a big company-wide push could change that in a hurry.

Amazon’s exhibited lack of interest in podcasts is a mystery. The company owns the biggest player in audiobooks, thrives on self-service publishing in ebooks, and its most popular hardware device line, the Echo, is a smart speaker. Amazon built something that could and should be a podcast machine, but forgot the podcasts — except indirectly, through third-party apps like TuneIn, Anypod, or Spotify.

Apple, Google, and Amazon are giants with money to burn: audio helps keep customers in their backyards, but none of them live or die by it. All three have good reasons to want to own podcasts, and non-Netflix digital media more generally.

Nevertheless, I want to make the case for Spotify, the company with audio at its core, and that’s made a big leap in podcasts in the last year — not least because Spotify’s evolution helps explain what Apple and Google are up to.

First, my confession: in the past, I have been a Spotify hater. I’ve complained about its software crashing all the time. I trashed its business model and openly doubted whether it could succeed after Apple and Google showed up. I made fun of its ads, which were terrible longer than they’ve been…kinda good? I even downloaded skins to make the app look more like Rdio. I am not the guy who showed up in 2017 ready to speak up for Spotify. But now, at the end of the year, I use the app every day; I think it’s on one of the most interesting trajectories in media; and I firmly believe publishers should be paying close attention to how it works.

Stay indie, stay foolish

Spotify should have been gobbled up by a bigger company a long time ago. With Apple, Google, Amazon, and Tidal all jumping into the space, Spotify looked like it might be more of a service than a company. It has huge market share and still operates at a loss. Not long ago, its investors were getting itchy; even now, on the verge of a public offering, giants are swooping in with offers of stock swaps, looking to nab a piece of Spotify and shore up its value.

But sometimes a rising tide really does lift all boats. All Spotify’s competitors helped convince consumers to start paying money for music. It’s not profitable yet — in fact, it’s losing more money than ever — but its revenues have grown, to $3 billion in 2016 and $2.2 billion in just the first half of 2017. Its operating margins are up to close to 22 percent. The company some people (including me) thought could never stand on its own will probably be publicly traded early in 2018.

More importantly, the service has gotten better. There are holes in the music catalog, mostly by competitors and die-hards, but they’re closing, and matter less than they used to. The discovery tools, from recommendations to retrospectives, are getting smarter and more sophisticated. The social tools remain robust, as Spotify’s managed to leverage Facebook without being beholden to it. There are lessons in this.

You have to marvel at what Spotify has been able to do. Backed by music industry investment and tech sector investment, it’s built an independent media delivery platform that successfully competes with giants. It delivers equally well to desktops, phones, and home speakers. Juggling subscriptions with ads (and the ads really are getting better), it may have the most successful freemium product in the history of the internet.

I don’t know whether or not a “Spotify for news” is possible or even desirable. But it’s clear that there are lessons for publishers in Spotify’s success. And when it comes to audio and video journalism, Spotify itself is a serious platform that deserves serious attention. The core of the business and the product may be music — but there’s no reason it has to stay that way, and every reason it should build itself into something new.

Podcasts, podcasts, podcasts!

Spotify introduced podcasts in early 2016, but only made its big push in summer 2017. It also has videos and concerts. But for the moment, podcasts are the tip of Spotify’s multimedia spear.

Here’s another confession: I love Spotify as a podcast app. There are no bulky downloads like iTunes, no hunting and gathering like SoundCloud, and they’re not isolated from other audio options like Stitcher or Overcast or the dozen or so podcast-only apps. Switching between devices is a snap: close a podcast on one machine, and it’s ready right where you left it on another.

For a variety of reasons, Spotify has gravitated towards big publishers with strong news and entertainment reputations: the major labels of the podcast world. So far, this includes ESPN, the BBC, The New York Times, The Washington Post, The Wall Street Journal, Vox Media, Slate, Gimlet, and the various U.S. public radio organizations, plus radio versions of TV network news shows. The publishers gain a solid discovery portal (something not all of them have on their own sites) and bigger potential audiences. They can run whatever native ads they want, and add revenue from Spotify’s preroll. They get promoted in discovery, where it’s a little easier to stand out than in Apple’s haystack. It’s a pretty compelling proposition.

But so far, Spotify hasn’t delivered its users. It’s not turning its music listeners into podcast listeners, at least on its platform, and it’s not winning users away from Apple, Overcast, Stitcher, NPR Music, or any of the other podcast apps that offer the same choices.

Meanwhile, Spotify is starving for video content and a way to differentiate itself from Apple and YouTube. (It has a few original series, but nothing essential yet.) And a lot of these same publishers have sunk a huge amount of money into video only to have Facebook (and to a lesser extent YouTube) pull the rug out from under them again and again. Isn’t there an obvious move here? Couldn’t publishers be Spotify’s major labels for audio and video?

What happens next

Spotify’s implementation of podcasts could use some work. Right now, when you browse on the desktop, it’s tucked away in a “More” submenu. It might be a design relic from when podcasts mattered to Spotify a lot less, but it reads as if the company’s ashamed of them. Right now, even search stinks: You can’t specify whether you’re searching for podcasts or music, and you can’t drill down by artist or topic within search. (This is one reason Apple bought Pop Up and Shazam: to keep them out of Spotify’s hands, and everyone else’s.)

But when Spotify gets serious about discovery for podcasts like it has for music, it has enough of the right kind of data to give its discovery engines some bite. Music preferences are a great proxy for demographics; add podcasts, web browsing data, and a social graph, and you get a very compelling picture of a user. That can be used to target ads, but it’s even more powerful in driving further use of the app.

Spotify needs to grow in everything: publishers, listeners, audio, revenue, data. Podcasts right now are a healthy coral reef; the system teems with indie producers who might be reluctant to embrace yet another platform. Spotify’s been picky about which podcasts it’s added and less than transparent about its criteria for adding them. Hardcore podcast listeners are fiercely loyal to the podcasts they love and unlikely to switch from whatever service they’re already using if they can’t find what they want. Spotify will have to figure out how to balance accessibility and discovery with comprehensiveness and credibility.

Spotify will also have to hit on a revenue sharing program that makes sense for everyone. Publishers might be desperate, but they’re not under the existential threat the music industry was when it threw in with streaming.

I’ve focused on Spotify, but these are the problems the entire industry is facing, with every service and every app: discovery, revenue sharing, bigger catalogs, more users, and better ads to serve them. That’s where the competition is going to happen.

Apple, Google, and Amazon all have leverage, because they own and control the devices. Spotify’s only advantage is that it works on almost every device. So Spotify will need the bigger tech platforms to not completely eat its lunch — in audio, in video, in everything.

Luckily, Spotify’s been in this position before with music, and mostly figured it out. It’s also getting an influx of cash and a mandate for growth. Selling more media to its users, keeping them inside the app as much as possible, could be a powerful way to grow — and to keep its current user base on board.

2018 is going to be a fascinating year for the podcast business. And I, for one, have given up on underestimating that little green dot.

Tim Carmody writes about media, technology, art, and culture.

José Zamora   Revenue-first journalism

Manoush Zomorodi   Self-help as a publishing strategy

Nicholas Quah   Stop talking trash about young people

Mandy Velez   texting is lit rn, fam

Jamie Mottram   From pageviews to t-shirts

Hossein Derakhshan   Television has won

Caitlin Thompson   Podcasting models mature and diversify

Neha Gandhi   Filler killers

Lanre Akinola   Making noise is not a strategy

Pablo Boczkowski   The rise of skeptical reading

Corey Johnson   The pro-fact resistance

Jacqui Cheng   Retailers move into content

Mike Caulfield   Refactoring media literacy for the networked age

Sam Ford   The year of investing in processes

Nathalie Malinarich   Peak push

Kim Fox   Audience teams diversify their approach

Edward Roussel   Eyes, ears, and brains

Sara M. Watson   Feeds will open up to new user-determined filters

Imaeyen Ibanga   Longform video leads the way

Michelle Garcia   Navigating journalistic transparency

Richard Tofel   The platforms’ power demands more reporters’ attention

Ernst-Jan Pfauth   Publishing less to give readers more

Kristen Muller   The year of the voter

Umbreen Bhatti   The trust problem isn’t new

Jim Moroney   Newspapers have to be good enough for readers to pay for

Rachel Schallom   Better design helps differentiate opinion and news

Nikki Usher   The year of The Washington Post

Mi-Ai Parrish   Blockchain and trust

Dannagal G. Young   Stop covering politics as a game

Jassim Ahmad   Thriving on change

Trushar Barot   The Jio-fication of India

Emma Carew Grovum   Newsroom culture becomes a priority

Kathleen McElroy   Building a news video experience native to mobile

AX Mina   Memes and visuals come to the fore

Nancy Watzman   Know thy TV

Evie Nagy   Pivot to mobile video frustration

Michael Kuntz   The only pivot that might work

Alfred Hermida   Going beyond mobile-first

Alexios Mantzarlis   Moving fake news research out of the lab

Jessica Parker Gilbert   Design connects storytelling and strategy

Matt Thompson   Here come the attention managers

Corey Ford   The empire strikes back

Rasmus Kleis Nielsen   The Snapchat scenario and the risk of more closed platforms

Felix Salmon   Covering bitcoin while owning bitcoin

C.W. Anderson   The social media apocalypse

Julia Beizer   A longer view on the pivot

Tanzina Vega   It’s time for media companies to #PassTheMic

Daniel Trielli   The rich get richer, the poor scramble

Marie Gilot   No assholes allowed

Betsy O'Donovan and Melody Kramer   Skepticism and narcissism

Matt DeRienzo   A recession, then a collapse

Steve Grove   The midterms are an opportunity

Kyle Ellis   Let’s build our way out of this

Alan Soon   The rise of start of psychographic, micro-targeted media

Molly de Aguiar   Good journalism won’t be enough

Jared Newman   Venture funding and digital news don’t mix

Claire Wardle   Disinformation gets worse

Joyce Barnathan   It will be harder to bury the news

Rachel Davis Mersey   AI, with real smarts

Hannah Cassius   The year of the echo-chamber escapists

Lucas Graves   From algorithms to institutions

Heather Bryant   Building the ecosystems for collaboration

Monique Judge   Letting black women tell their own stories

Valérie Bélair-Gagnon   Seeking trust in fragmented spaces

Jarrod Dicker   Honesty in advertising

Federica Cherubini   The rise of bridge roles in news organizations

Aron Pilhofer   We can’t leave the business to the business side any more

Sally Lehrman   Trust comes first

Laura E. Davis   Writing answers before you know the question

Yvonne Leow   The rise of video messaging

Taylor Lorenz   Social and media will split

Amy Webb   Listen to weak signals

Charo Henríquez   Training is an investment, not an expense

Paul Ford   Go global

Errin Haines   At the ballot, it’s time to count black women

Nushin Rashidian   Publishers seek ad dollar alternatives

David Skok   Finding an information-life balance

Jim Brady   With the people, not just of the people

Ariana Tobin   Too tired to tap

Ruth Palmer   Risks will grow for news subjects — especially minorities

Juliette De Maeyer   A responsible press criticism

Raju Narisetti   Mirror, mirror on the wall

Monika Bauerlein   The firehose of falsehood

Mary Meehan   Real lives are at stake in rural areas

Pia Frey   Address users as individuals

Ray Soto   VR reaches the next level

Matt Carlson   Attacks on the press will get worse

Julia B. Chan   Looking for loyalty in all the right places

Helen Havlak   Keywords, not publishers, power the world’s biggest feeds

Sydette Harry   Listen to your corner and watch for the hook

Jesse Holcomb   Information disorder, coming to a congressional district near you

Jennifer Choi   Standing up for us and for each other

Lam Thuy Vo   Breaking free from the tyranny of the loudest

Eric Nuzum   Beyond the narrative arc

Alice Antheaume   Are you fluent in AI?

Luke O'Neil   The end is already here

John Keefe   Scooped by AI

Sam Sanders   Shine the light on ourselves

Dan Newman   A return to trust

Eric Ulken   The year local publishers get smart(er) about change

Renée Kaplan   The year of quiet adjustments (shhh)

Tracie Powell   The muting of underserved voices

Juleyka Lantigua   Women of color will reclaim and monetize our time

Mariano Blejman   News games rule

Basile Simon   We need better career paths for news nerds

Gordon Crovitz   Serving readers over advertisers

Tim Carmody   Watch out for Spotify

Francesco Marconi   The year of machine-to-machine journalism

Vivian Schiller   Pivot to tomorrow

Tanya Cordrey   Finally, the seeds of radical reinvention

Mira Lowe   The year of the local watchdog

Kelsey Proud   No, no, no

Kawandeep Virdee   Zines had it right all along

Miguel Castro   The arrival of the impact producer

Andrew Losowsky   The year of resilience

Cindy Royal   Your journalism curriculum is obsolete

Cory Haik   Suffering from realness, pivoting to impact

Caitria O'Neill   The new court of public opinion

Justin Kosslyn   The year journalists become digital security experts

Dheerja Kaur   Fun with subscription products

Carlos Martínez de la Serna   The new journalism commons

Emily Goligoski   Looking beyond news for inspiration

Amy King   Let’s amplify visual voice

Vanessa K. DeLuca   Women’s voices take center stage

Pete Brown   Push alerts, personalized

Cristina Wilson   The year of the Instagram Story

Niketa Patel   Live journalism comes of age

Zizi Papacharissi   Women come back

Elizabeth Jensen   Show your work

Susie Banikarim   R.I.P. Pivot to Video (2017–2017)

Sue Schardt   Jump the niche

Feli Sánchez   The year for guerrilla user research

Dan Shanoff   You down with OTT? (Yeah, DTC)

Kinsey Wilson   Facebook and Google: Help out or pay up

Rubina Madan Fillion   Unlocking the potential of AI

Almar Latour   Conquering calm

Doris Truong   Computer vision vs. the Internet vigilantes

Jake Levine   The return to now

Carrie Brown-Smith   Transparency finally takes off

Craig Newmark   Working together toward sustainable solutions

Christopher Meighan   Passive partnership is in the rearview

S. Mitra Kalita   The arc of news and audience

Sarah Marshall   Loyalty as the key performance indicator

P. Kim Bui   The reckoning is only beginning

Raney Aronson-Rath   Transparency is the antidote to fake news

Amie Ferris-Rotman   More female reporters abroad (please)

Tamar Charney   We get serious about algorithms

Rodney Benson   Better, less read, and less trusted

Adam Thomas   Sharing is caring: The year of the mentor

Jennifer Brandel and Mónica Guzmán   The editorial meeting of the future

Joanne McNeil   Gatekeeping the gatekeepers

Mariana Moura Santos   Think local, act global

Mary Walter-Brown   Show a little vulnerability

Rodney Gibbs   Tech workers turn to journalism

Usha Sahay   Wallets get opened

Alastair Coote   The year of self-improvement

Borja Echevarría   TV goes digital, digital goes TV

Jennifer Coogan   The future is female

Damon Krukowski   Reviving the alt-weekly soul

Will Sommer   The year local media gets conservative

Ståle Grut   Reclaiming audience interaction from social networks

Debra Adams Simmons   And a woman shall lead them

Matt Boggie   The intellectual equivalent of the Dead Sea

Joanne Lipman   Journalists inventing revenue streams

Frédéric Filloux   External forces

Bill Keller   A growing turn to philanthropy

Rick Berke   Value is the watchword

Andrew Haeg   The year journalists become relationship builders

Brian Lam   Sketchy ethics around product reviews

Burt Herman   Things get real

Michelle Ferrier   The year of the great reckoning

Mario García   Storytelling finally adapts to mobile

Nicholas Diakopoulos   Fortifying social media from automated inauthenticity

Andrew Ramsammy   The year ownership mattered

Millie Tran and Stine Bauer Dahlberg   (Hint: It’s about your brand)

Marcela Donini and Thiago Herdy   Collaboration is the way forward for Brazilian journalism