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Last week, Spotify announced a $100 million deal with Joe Rogan to put his popular podcast and archives exclusively on their site.
I sometimes tell aspiring journalists that the way for them to make it in the business is to get in a time machine and go back to 2003. That was a time when relative amateurs and inquisitive people could rise up through the world of independent blogging, then a small niche, and have their world eventually exposed to millions. An astonishingly large portion of reporters and columnists were once bloggers; those who got in early could make a name for themselves.
That ended once Facebook and Google took advertising dollars away from blogs, and Facebook (and to a lesser extent Twitter) took the eyeballs. They did this largely through acquisitions: Google bought YouTube and DoubleClick, a leading advertising technology provider; Facebook bought Instagram and WhatsApp, and they added on dozens of other back-end companies and competitors to dominate the space. Antitrust enforcers did next to nothing to stop it.
As a result, the manner in which I became known as a political writer has been completely shut off. Younger journalists are shouting into the wilderness, with thin hopes for advancement. It damages the entire media ecosystem. And we’re seeing this cycle tragically repeat itself again in podcasting.
There as well, a vibrant community of independent hosts, with a variety of styles and niche audiences, has exploded over the past several years. A lot of content is available for free, much of it with live advertising reads. Google and Facebook haven’t dominated the ad space because it’s not totally programmatic; listeners respond better to the podcasters they like supporting the products. Another source of revenue has been listener subscription services like Patreon; some podcasts combine free episodes with special “bonus” ones behind a paywall.
The multiple revenue streams have allowed podcasts to maintain and thrive, and the relative ease of distribution through numerous syndication channels bolsters that. As Matt Stoller points out, no one actor controls the content, the advertising, and the distribution, similar to the blogosphere in the mid-2000s.
But here as well, a giant is intruding on the space, with visions of pulling all the listeners their way and aggregating all the money available for themselves and their handpicked stable. This came to a head last week when Spotify announced a $100 million deal with Joe Rogan, which would put his popular podcast and archives exclusively on their site by the end of the year.
This comes after a series of acquisitions by Spotify, including the Bill Simmons sports site The Ringer, a series of podcast networks like Gimlet and Parcast, and ancillary companies that provide ad tools and data analytics, among other things. Spotify is already the largest podcasting platform in the world. The Rogan deal is just for exclusive content. So distribution would then be centralized on Spotify along with content, and they’re growing the ad tech to dominate that part of the market too.
These elements build on one another: Once Spotify grows its share of the podcasting network, it will have the data to target advertising. Spotify has an ad-supported “free” version of its service, and a subscription-based one at $10 a month, combining the multiple podcasting revenue streams. The ad-supported version is necessarily programmatic and can therefore be targeted to user profiles. Regardless of what listeners opt into, it helps Spotify: They get the user data either way, and can target ads or collect monthly fees.
Fans of Rogan or The Ringer’s assortment of podcasts or the others Spotify is sure to snap up will have to use the service to find their favorites. They’re building the dominant channel for audio content, in an attempt to muscle everyone else out. Simmons actually identified this as the main attraction to selling The Ringer. In an interview with Vulture, Simmons explained that he wasn’t looking to sell, but he saw Spotify’s various purchases of podcasting networks and supporting companies. “When they made the Gimlet move, and Parcast … I was like, ‘I like everything I’ve read about these moves that you’re making and how you’re thinking about stuff, and I think it’s worth us talking a little more seriously.’” In other words, he wasn’t interested in hooking up with Spotify, but now that Spotify was becoming a budding monopolist, it sounded great.
We see how this has worked in other contexts. If you get some attention, you get sucked up by the giants: Witness The Office star John Krasinski’s video series Some Good News, which he sold to Viacom after a bidding war. Those not fortunate enough to have a pre-existing sitcom before hosting a show will fade into obscurity, as the audience travels to the monopolists. Podcasting will no longer become a place to capture a following, just like blogs in previous years.
To win, Spotify will eventually have to fend off Apple, Amazon, and Google, all of which offer their own audio services. Of course, they all make money off Spotify to one degree or another, charging it to sell its app in phone- or smart-speaker-based app stores. But Spotify won’t just have to battle the platform giants—it can learn from them.
Spotify is for the most part following the successful efforts of Google in search, Facebook in social, and Amazon in e-commerce.
Right now, we’re having a debate about free speech on social media, with President Trump signing a largely meaningless executive order because he got mad about being fact-checked on Twitter. How the tech giants handle censorship and user-generated content will inform Spotify’s conduct toward its podcasters. We learned this week that Facebook has been wooing state law enforcers through years of influence peddling and relationship building. Spotify will watch the impact of that campaign and how it affects antitrust enforcement against Facebook, and take up similar strategies if it faces resistance to monopolizing the podcast world.
Spotify is for the most part following the successful efforts of Google in search, Facebook in social, and Amazon in e-commerce. It now knows the path, how Big Tech got in trouble in Washington and how they got out of it, how to work the system to get free rein to consolidate.
The thing is, policymakers know that path as well. And they can choose not to fall for the same traps. Last week, Rep. David Cicilline (D-RI) proposed limits on political ad targeting, to prevent disinformation campaigns directly pitched at specific groups on social media. This is a quarter-step to simply banning targeted ads entirely, which I proposed two years ago. Targeted ads serve little productive purpose while compromising our privacy, destroying unique web and media outlets, and facilitating extreme concentration, leading to other bad outcomes for consumers and media producers. It would largely solve the Spotify problem by keeping advertising networks out of its hands. And it would allow the creators of media to get funding based on their uniqueness, not whether they happen to attract the attention of a platform giant.
Without Congress or regulators taking action, the playbook for Spotify has already been written. That’s good news for the Joe Rogans of the world, but for younger, less experienced, more diverse voices, it’s another hurdle to being heard.
