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Apple to Play Podcast Protection – jj

Apple to Play Podcast Protection


Spotify (NYSE:SPOT) is assembling a podcast assault against Apple (NASDAQ:AAPL), which has long been the dominant player in the space. The Swedish music-streaming company has spent approximately $400 million so far this year to acquire three different podcast-related companies — Gimlet Media, Anchor FM, and Cutler Media — in a bid to aggressively expand into podcasts, an effort that will also entail original shows exclusive to Spotify’s platform.

Apple isn’t about to sit idly by while that happens.

Apple Podcasts app displayed on a MacBook Air in MacOS Catalina

Image source: Apple.

Betting on exclusives

Bloomberg reports that Apple is going to start funding original podcasts that would be exclusive to Apple Music, with executives in talks with content creators to acquire the rights. The tech titan continues to dominate the podcast industry, with its Podcast app representing an estimated 50% to 70% of engagement, according to the report. At the same time, overall podcast listening continues to rise, underscoring the opportunity that Spotify is chasing.

Lacking meaningful competition to up until now, Apple has arguably rested on its laurels. That’s particularly true when it comes to advertising, the primary way that podcasters monetize their content. “Let me add that Apple, of course, historically been the largest player in the podcast space,” Spotify CFO Barry McCarthy said on the April earnings call. “They don’t have an advertising business, and there’s been no innovation in podcast advertising in its entire history.”

Spotify wants to develop better digital ad sourcing technology that can improve ad relevance, while providing analytics tools to podcasters so that they can better understand their audience. Bloomberg notes that Apple released its Podcast Analytics last year, following its initial beta introduction in 2017. When Podcast Analytics was first unveiled in 2017, Gimlet co-founder Matt Lieber called it “the biggest thing to happen to the podcast business since Serial first went nuclear.” More recently, Nieman Lab characterized Podcast Analytics as more evolutionary than revolutionary.

Original content is king in 2019, and while Apple has been spending lavishly on original content for its upcoming Apple TV+ video-streaming service, it has been hesitant to use a similar strategy in podcasts, according to the report. But Spotify has been making waves by announcing a growing catalog of exclusives, including a recent partnership with Higher Ground Productions, the production company started by former President Barack Obama and Michelle Obama. Spotify now grabs an estimated 10% to 20% of listeners for many shows, and as much as 50% of listeners for others, Bloomberg notes.

At the end of the first quarter, Spotify had 15 exclusive podcast shows on its platform, but the company is just getting started. Spotify CEO Daniel Ek has noted that podcast listeners are nearly twice as engaged on Spotify compared to users that only listen to music, and the company will naturally leverage its strengths in content discovery. “So you should think about our podcasting strategy in the same way,” Ek said. “We have podcast content increasing engagement through discovery, which leads to lower [subscriber acquisition cost], lower churn, and then higher lifetime value.”

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