Hey people! Welcome back to Forests Over Trees, your weekly tech strategy newsletter. It’s time to zoom-out, connect dots, and (try to) predict the future.
Is Spotify Listening?
A year ago, I revealed my love of podcasts.
I also challenged Spotify to treat podcasts better!
So it’s time to check-in and see whether they’re listening.
Setting the stage
As a reminder, a few years ago Spotify’s podcast strategy had two pillars.
Pillar 1 was all about exclusive celebrity deals. They had deals with Brene Brown and the Obama’s, a $20M deal with Harry and Megan, and a $200M deal with Joe Rogan.
With those first deals, they learned that going for exclusivity limits reach (cough, Obama’s), and that partnering with unproven podcasters can backfire (cough, the Royals)!
Pillar 2 of their original strategy was all about going vertical. In 2019 they bought podcast studio Gimlet for $230M and creation/distribution company Anchor for $150M. These buys came with point solutions and existing IP (podcasts in production). They rolled these acquisitions into internal business units, cut costs to streamline things, and started offering podcasters an end-to-end solution!
But my challenge to Spotify last time… my version of “please, do better!”, was this:
Spotify seems to be trying to play the role of king-maker and platform… and they need to pick one.
They act as the king-maker by launching original podcasts, signing celebrity deals, and buying up studios. When they do that, they’re saying “we know best what you want”.
But then they also act as the platform, giving creators the chance to sprout up from anywhere, and empowering them with monetization and growth tools. When they do that, they’re saying “you know best what you want”.
Spotify should go with the “you know best” strategy.
So has anything changed after a year?
Listening for Change
First, they fired Julie McNamara.
She was the Head of Spotify Podcast Studios, and while I’ll never celebrate athletes getting hurt or corporate athletes getting ousted, I think this is a positive signal.
Here’s why.
McNamara’s “Podcast Studios” group is where many of those acquired studios’ IP ended-up. And it’s also where the licensed podcast deals – the deals with Joe Rogan and the rest – got inked.
In fairness to McNamara, this was a reasonable strategy, and one based on her past experience (15 years at CBS, including being in charge of original programming for Paramount+, etc.).
But her departure (and an absence of news about other flagship podcast deals) tells me they are leaning away from being a king-maker.
Second, they announced an experiment in education.
According to The Verge, Spotify started piloting “Courses” in the UK in March 2024.
Apparently, Spotify noticed that educational content had traction on the platform already – with ~50% of premium listeners engaging with an education or self-help podcast.
And some of these podcasters were even paywalling the podcasts as a way of directly monetizing their audience and helping others learn!
For the pilot, Spotify is partnering with existing, creator-driven education platforms (Skillshare, Maestro, etc.). So those platforms can have their educational content broadcasted/discovered on Spotify.
This is a great start. By letting existing content creators (from proven platforms) compete for attention, they avoid king-making.
Third, they announced a partnership with Substack.
With this new integration, creators from Substack can seamlessly publish premium/paid podcasts to Spotify (try saying that five times fast!).
When a random Spotify listener sees the content and wants to unlock it, they can subscribe/pay within Spotify. Then, that subscriber data gets shared back to Substack so the creator can keep control over their growing audience.
Again, this is awesome. It’s a sign that Spotify wants to act like a platform for creators, rather than a king-maker. Plus, because Substack creators still get their subscriber data, they’re more likely to give it a shot (which gives Spotify more content to distribute, paid subscriptions to get a cut of, etc.).
This is a great start, but what should Spotify try next?
Copy TikTok Even More
Building an audience is really hard. And the hardest part is discovery (getting content into the ears of users that might like it).
Spotify already tries to tackle this by putting content into “recommended” sections and playlists. They even have a scrolling feed of audio previews (like a poor man’s TikTok)…
… But they should go way further with the scrolling feed!
Here’s what I mean:
Ditch the random audio previews. Instead, let the podcaster pick the most viral clips and add production value. Plus ~17% of all podcasts now come with video, so put it to use and leverage the more engaging video format!
Subscriptions aren’t the end-all-be-all. Let users “follow” podcasters who post clips they find interesting or entertaining. This helps podcasters build more top-of-funnel discovery, eventually converting those folks into subscribers!
Users and fans can drive discovery too. Don’t leave them out! Let them post reaction videos, breakdowns, memes, etc. As long as they’re giving attribution to the original creator, it’s all helping drive discovery (and engagement on the platform)!
And all of this like, comment, and swipe activity is data to make recommendation algorithms even better. Plus, it works just as well for music as it does for podcasts.
Wrapping up
While they might not take my advice to focus on discovery, I do think Spotify is warming up to the idea of being a creator platform. I think they’ll build on the experiments we covered today, introducing other ways to help creators monetize.
Maybe that means helping free podcasters convert to paid. Maybe that means helping all podcasters drive events (seminars, live shows, etc.)…
But what it definitely means… is more moves for us to follow!
Looking forward to keeping tabs on this.
Bonus Bullets
Quote of the Week
“Stone Age. Bronze Age. Iron Age. We define entire epics of humanity by the technology they use.”
– Reid Hastings, Chairman and Co-Founder at Netflix
Quick News Reactions
Private Likes – X is going to hide the usernames of people who have liked posts. Critics are saying it will promote bad behavior, where people aren’t ashamed to like questionable/offensive content. But I honestly think it’s just an interesting experiment for us to learn more about user behavior online, provided that the like counts aren’t being fudged by X!
Bartering with AI – For the newly announced partnership between Apple and OpenAI, analysts expected somebody was paying somebody. But it turns out it’s a completely non-financial exchange. OpenAI gets distribution through Apple, and Apple’s users get AI-supported functionality. Given that OpenAI and the LLM companies are in the commodity business (as I wrote about a few weeks ago), they shouldn’t have as much leverage! I think Apple is getting the short end of the stick here.
Hacking Tracking – Tile (the company that makes the location tracking devices), got hacked this week. While location data wasn’t leaked this time, this news really bothered me. Hacks of personal info can lead to financial scams or identity theft, but physical location and travel patterns connect to physical safety… think of all the tiles that might be on dogs’ collars, kids backpacks, etc. We may need regulation or some other enforcement to require better behavior that reduces hacking risk. We’re becoming numb to all the hacking news… and I’m worried companies are becoming complacent.