INCREDIBLE post from @brettbivens on @Spotify and the long-term opportunity in audio.
My "few key points" that I wanted to share ended up being half the article, there's just so much goodness. Forgive me!
Would love to hear from @eldsjal 🤞🙏
[THREAD]
venturedesktop.substack.com/p/spotify-the-…
My "few key points" that I wanted to share ended up being half the article, there's just so much goodness. Forgive me!
Would love to hear from @eldsjal 🤞🙏
[THREAD]
venturedesktop.substack.com/p/spotify-the-…
"...the consumer devices reaching scale today are largely audio-first and elevate the medium in a way that will unlock previously unforeseen use cases and business models..."
Strongly agree, this is self-evident with the explosive growth of smart speakers, AirPods, etc.
Strongly agree, this is self-evident with the explosive growth of smart speakers, AirPods, etc.
I'd add to this is the importance of being "platform agnostic."
A consumer will likely have multiple audio devices (smart speaker, AirPods, car) from multiple different providers (Amazon, Apple, Tesla) so it's important to have a service (Spotify) that is suitable for all.
A consumer will likely have multiple audio devices (smart speaker, AirPods, car) from multiple different providers (Amazon, Apple, Tesla) so it's important to have a service (Spotify) that is suitable for all.
"Yet despite the built-in advantages of these platform players [Amazon, Apple, Google], I believe it is actually Spotify who is best positioned to ladder up and capture the value that comes from being the market's predominant ambient media company."
This is the key question.
This is the key question.
"...all of these companies can afford to engage in price cutting and are happy to run their music businesses unprofitably for a long time to support larger and more attractive core businesses (AirPods, TikTok, etc.)."
A dynamic I struggle most with, still unresolved.
A dynamic I struggle most with, still unresolved.
A hard set up, in subscription music.
"...these companies see their digital music businesses as a complement to their primary raison d'être and are aggressively seeking to commoditize it..."
"...these companies see their digital music businesses as a complement to their primary raison d'être and are aggressively seeking to commoditize it..."
"Podcasts should be viewed as just the beginning of a much longer term strategy around audio-first content and the recent news of the company's "early" acquisition discussions with The Ringer hint at a much bigger vision for the future of Spotify than most give them credit for."
Would love to know how @joerogan coming onto the platform potentially changes the game and/or accelerates the trend @brettbivens?
Interesting way to frame their strategic pathway..
"Spotify's Ladder
Rung 1: Discovery
Rung 2: Vertical Depth
Rung 3: Expanded Format
The Final Rung: Social"
"Spotify's Ladder
Rung 1: Discovery
Rung 2: Vertical Depth
Rung 3: Expanded Format
The Final Rung: Social"
Rung 1: Discovery
"...personalization and discovery remain the core differentiators between Spotify and its music streaming competitors and an "asset that doesn't earn" that drives retention in the near term and conveys pricing power in the long term."
*Spotify's killer app*
"...personalization and discovery remain the core differentiators between Spotify and its music streaming competitors and an "asset that doesn't earn" that drives retention in the near term and conveys pricing power in the long term."
*Spotify's killer app*
Rung 2: Vertical Depth
"The three remaining rungs on Spotify's ladder...build off of the idea that Spotify's long term success hinges on differentiated discovery."
TBD how the importance of scale in driving AI/ML and the discovery engine, how that plays out...
"The three remaining rungs on Spotify's ladder...build off of the idea that Spotify's long term success hinges on differentiated discovery."
TBD how the importance of scale in driving AI/ML and the discovery engine, how that plays out...
Agreed - difficulty of podcasting recommendations - this still hasn't been solved IMHO.
"It’s one thing to curate music playlists, in which most of the units are approximately the same length, but it’s another to curate a broad universe of spoken audio things altogether."
"It’s one thing to curate music playlists, in which most of the units are approximately the same length, but it’s another to curate a broad universe of spoken audio things altogether."
"By bringing the team from The Ringer in house, Spotify is not just buying a horizontal podcast production company. It is buying a deep understanding — from production to talent to business — of what the core user in two key verticals (Sports and Pop Culture) wants..."
Rung 3: Expanded Formats
"Expanding formats gives them the opportunity to continue making those core users more profitable by shifting the revenue mix even further in the direction of fixed cost (or zero cost) content while also creating revenue growth opportunities..."
GM exp.
"Expanding formats gives them the opportunity to continue making those core users more profitable by shifting the revenue mix even further in the direction of fixed cost (or zero cost) content while also creating revenue growth opportunities..."
GM exp.
"...Daniel Ek recently spoke about the company's expansion into kids programming as well as the potential for expansion into corporate-focused content on the Invest Like the Best Podcast."
Shout out to @patrick_oshag!!
Shout out to @patrick_oshag!!
Final Rung: Social
@DCoolican "The social version of any product is the one that will win in the end. Music, food delivery, banking, it doesn't matter. No category is "won" until the truly social product takes off.
Some examples???
@DCoolican "The social version of any product is the one that will win in the end. Music, food delivery, banking, it doesn't matter. No category is "won" until the truly social product takes off.
Some examples???
"Losing social to current US competitors like Apple, Amazon, or Google doesn't seem a significant threat, but Chinese competitors like ByteDance (Resso) and Tencent (QQ Music, Kugou, Kuwo and WeSing) are taking a social-first approach to music..."
Not the easiest set up...
"...with perhaps the most significant structural advantages of any incumbents since the days of the Robber Barons) as well as two of the most innovative and aggressive large companies on the planet (Tencent and ByteDance)."
"...with perhaps the most significant structural advantages of any incumbents since the days of the Robber Barons) as well as two of the most innovative and aggressive large companies on the planet (Tencent and ByteDance)."
END!
$SPOT
$SPOT
