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A smartphone and a casino are seen before a projection of the Spotify logo Photo: Dado Ruvić/Reuters

As this financial issue came out last week, Spotify bought two small tech companies. Chartables and Podsights, founded and founded in New York, are hardly household names: with about 50 employees between them, according to Crunchbase analytics estimates, they are the kind of acquisitions that large companies regularly make and are often hidden from anyone else. the energy of the observers. And the acquisitions, both for closed sums, help explain why the company is so keen to face criticism from the likes of Neil Young and Joni Mitchell about its broader podcasting tool — and its apparently valued spending. $200 million to acquire the exclusive rights to the Joe Rogan podcast.

Both Podsights and Chartables allow podcasters and networks to include tags in their shows that track who was listening, whether they listened, and whether they took an action after listening. Spotify says it plans to use Podsights technology beyond podcasting, rolling it out to “the full range of Spotify platforms, including music ads, video ads and show ads.” The adoption of podcasts seems to be focused more on the podcasters themselves than the advertisers, especially because of their technology like SmartLinks [which are clickable from podcast tracks]. “These tools will make it easier for publishers to convert audience insights into action and enhance the audience experience, ultimately growing their business,” writes Spotify.

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In other words, both companies are creating tools that turn podcast advertising into something more like Internet advertising. Podcasts are cliche ads here: there are meal kit deliveries, direct-to-consumer strata and web-hosting services. It’s not (only) because these companies are big fans of supporting the skills of independent media. But the fact is that buying and running ads on podcasts has historically been expensive, an analog business that involves personal relationships with small publishers and authors, all to serve advertisers with little to no ability to track. beyond the absolute meter in the broadest sense. This means that the “customer cost” of podcast marketing is very high, so it is usually only paid in industries where the price is paying a lot of money for each new customer: income or large item industries.

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From the seller’s point of view, they are ineffective throughout the system. Purchasing orders is difficult due to the limited nature of podcast production; audience targeting is difficult due to the lack of meaningful analytics available through decentralized ecosystems; and buying a purchase is difficult because it is difficult to respond to a specific call-to-action link for any person.

Enter Spotify. What the company offers is pretty obvious. When you listen to a podcast on Spotify, you’re not just downloading an MP3 from the server and playing it on a generic device of your choice – you’re streaming directly from Spotify’s servers, connecting the audio directly to your account and everything. the proportional profiling that it brings with it. Spotify sells ads for podcasters, they get those ads with much more granularity than most apps, and they easily develop technical lines – like “click here to buy” – as advertisers see fit.

But society looks at the chicken and the egg. Listeners won’t switch to listening to podcasts on Spotify without a big push, and podcasters won’t convert if the listeners aren’t there.

That’s why Spotify wants to ignite its relationships with some of the biggest names in music through Joe Rogan.

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Many musicians accurately describe the struggles of one money not behavior, but they are mistaken about where the money really lies. Also, every time you listen to a song on Spotify, you’re buying the company money: royalties are paid by the stream, and the perfect Spotify music fan is someone who pays every month and never opens the app. And yes, every time you listen to Joe Rogan on Spotify, you’re making money for the company: the podcast still carries ads and profits from the audience, but Spotify has reportedly quadrupled its business with the former MMA commentator.

But that business is minor compared to the long-term point of businesses like Rogan’s, which is to turn the platform into a podcast home. By buying exclusives upfront, Spotify is breaking the chicken-and-egg problem that has hampered its efforts to transform podcast advertising from a profitable niche into a major part of the industry. The plan isn’t, as the New York Times reports, to embed Spotify podcasts on Netflix – it’s to embed Spotify podcasts on YouTube.

It is surprising, however, that society builds up to this end with almost no resistance. Apple, whose built-in Podcasts app is still the market leader, hasn’t completely abandoned a medium that’s effectively created. Its inadvertent launch of paid podcasts in late 2021 was notable more for its time to disrupt the podcast business than for the small number of shows that took it up on offer. Amazon is building an impressive slate of audio exclusives on Audible, but its ultimate goal is clearly a Netflix-style model. The list of independent apps and networks that make up the long tail of the podcasting industry lacks the resources and coordination to fight back.

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There are exceptions. Spotify is making a clear push to dominate the market, following the BBC’s decision earlier this month to pull a number of podcasts from public directories and into a single BBC Sounds app.

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“The world of audio streaming is constantly changing, with global tech giants increasingly publishing content exclusively on their own platforms,” ​​the BBC said in a statement. “We want to make it easy for people to find new content from the BBC and not rely on other platforms that have their own exclusive content and global catalog to do that for us.”

This migration was also controversial. As former technology watchdog Charles Arthur said, “you don’t need to watch special TV to watch BBC TV; You don’t need a special radio to listen to BBC radio. And yet it is clear that there is some degree of dominance in which this is right: you don’t need to be a devoted TV watcher to the BBC, but if the BBC actually ended up going to Heaven through an exclusive marketing intention, something would be wrong. badly

Whether Spotify succeeds or fails in its endeavor, the push at the start of the end looks to be one of the last parts to exist completely independently of the major tech platforms. As the rise of social media has usurped blogging, the success of YouTube’s central video creation, and yes, the creation of Spotify’s very own time of life MP3 based on online music fans, podcasts in their current form feel an almost existential change. . It’s hard to see how Spotify’s efforts can be successfully countered, other than I’d like the BBC to go back to their walled gardens, and since a world with twenty podcasting apps is better than a world with one, that would be the end. era

From one energy on the cusp of the assimilation of the platform to another in its final effort. Amazon this week completed its eight-year integration of the digital comics platform Comixology, which it acquired in the heady days of 2014.

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