The two music-streaming companies are racing to corner the podcast market with investments and acquisitions, but it’s still anyone’s game.
In 2019, a curious thing happened to music streaming: The two biggest players in the industry, Spotify and Apple, both quietly stopped referring to themselves as music services. Though the two tech giants still tout their millions-strong song catalogs as the core of their products, the year has seen a series of aggressive moves from each of them in a different arena altogether.
That would be non-music audio content — and specifically podcasts, a booming format that attracts one-fifth of U.S. adults each week, according to Nielsen’s latest audience report. (That figure was half the size 10 years ago.) Spotify has spent the year on a hunting spree, snatching up several high-profile podcast opportunities with personalities like comedian Josh Adam Meyers and Barack and Michelle Obama; it’s invested some $300 million in podcasts, acquired two podcasting companies, and redesigned its app experience to highlight podcast episodes as prominently as it does music albums. Yet Apple, not to be outdone, is getting ready to fund is own original exclusive podcasts as well, according to a recent Bloomberg report. Specifics of the deals are not yet known.
Voxnest, an podcasting firm that offers services to publishers and advertisers, came out with a report this week using audience network data that proclaims Apple as the bigger of the two services in the podcast market right now by popularity — but only by a modest margin. Spotify’s current dominance in certain European countries such as Germany, Bulgaria and the Netherlands is “particularly important” to watch because of the promising growth rates in those regions, the report notes. What’s likely is that we end up seeing the same country-specific fragmentation that we do for music streaming, with Apple Music leading in U.S. paying subscribers but Spotify taking the global lead by market share. And that’s not yet factoring in the targeted podcasting efforts of audio companies like Pandora and Luminary, who are also pushing determinedly into the space.
A better question than “who will come out on top?” may be “which company will benefit more from podcasts?” Analysts largely see Spotify’s podcast initiatives as strategies to diversify the Swedish streaming service’s offerings; to Apple, though, expanding podcasting would be building off of something that has lived inside the company’s product ecosystem via iTunes (RIP) since 2005. But as a Vulture analysis on Thursday noted, the “substance and stakes are now dramatically different” as podcasting booms in popularity in profit, thanks to advancements in both streaming services and consumer tech gadgets like smart speakers. In short: Everyone’s seen the signs of a major untapped market, and the rush into it from every side will be anything but orderly.
Source: Rolling Stone