Big Deal

The reaction to Spotify buying podcast producer Gimlet Media and podcasting platform Anchor this week has been a combination of astonishment at the price for Gimlet, concern that Spotify is trying to dominate the podcast space, pride that podcasting is drawing real dollars, and jokes of the "hey, if they want to buy MY podcast, I'll take $230 million!" variety.

Naturally, I have a different opinion. I may be the only observer who sees this as a particularly old-media move to make.

What Spotify is doing, on the surface, is an aggressive move, an attempt to be the monster of podcasting, signing up big-name talent to be the, or one of the, major podcasting apps. By grabbing the Gimlet lineup and production line to go with the podcasts they've been producing with name-brand celebrities like Joe Budden, Amy Schumer, and Jemele Hill, it would seem that they're trying to position themselves as a must-have for exclusive (or at least exclusive on an early-release basis) content and potential subscription opportunities. That makes sense on some levels; if you have something that consumers want and can only get from you, that's a strong business plan for sure.

But....

The podcast world is a particularly democratic one. There are formulas for success, but it's pretty random at times, and it's a world in which one person with a Zoom recorder and a microphone has the potential to score as big a hit as a massive entertainment conglomerate. NPR and iHeartRadio and, yes, Gimlet produce podcasts that, if their self-reported download figures are accurate (oh, I can tell stories about that...), are successful, but they share the charts with... okay, let's look at the Apple charts, which, yeah, I know, they don't share how they're compiled and are notoriously opaque as to what they really mean. But we don't have a better ranking for now. And on that list are the big dogs, but also people of whom you've probably never heard, unaffiliated with the large production companies. Some of the biggest podcast hits of recent years came from individuals or independent groups with good ideas and no network affiliation. It's still, to some extent, a "Hey, Kids, Let's Put On A Show" medium rather than the "If You're Not With A Major Network, You Have No Shot" medium.

Which makes big-footing the business -- marching in, buying up the biggest production companies and celebrity names, putting your content behind paywalls or in particular apps -- less effective. We're still in the phase of the business, over a decade into it, where it's still early and open to newcomers, where there's no one way to make a show a slam dunk. Gimlet is a nice company with some very good podcasts, but buying it guarantees nothing. There's still plenty of room for a company that doesn't cost $230 million to compete and win. That's what happens when there's zero barrier to entry. And that's why spending and spending and spending isn't necessarily going to buy you a victory....

...Unless, that is, you're talking about marketing. That, I think, is where the big guns can make a difference, and where radio has some advantages as the companies discover and move into podcasting. What Spotify is doing is betting on content, but its focus is going to have to be getting the word out about what it's offering and how to get it. It's not just curation and it's not just producing good shows, it's raising them from the zillions of podcasts flooding the market and making people interested in finding them.

And the upshot is that Spotify's move is an old media approach: Sign up big names, buy up smaller players, go big, just like iHeart did (for a lot less money) with HowStuffWorks, another producer with a strong track record. It's an interesting move if you assume that the ultimate goal is to keep subscribers within the Spotify app for all of their audio entertainment needs, because you can argue that it wasn't necessary for that. So it's something else. It's a gamble on the content producers you're gobbling up, trusting that they can continue to create dominant content. When the medium itself is wide open and competition can rise from anyone and anywhere, that's an interesting bet.

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No, I told you, I'm not going to make a "I'll sell MY podcast to Spotify" joke. Too hacky. Also, my podcast is priceless. Go subscribe and I'll talk to you next week.

Perry Michael Simon
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