Apple, Luminary, Spotify, and the podcast wars to come

The podcast wars are coming. After the problematic release of Luminary, Nilay Patel and Ashley Carman of The Verge sit down with podcast expert Nick Quah from Hot Pod to discuss whether Luminary or anyone could be "the Netflix of podcasts" and where the industry is headed .

You can hear the discussion in its entirety at The Vergecast at this time. Below is a slightly edited extract of the interview.

Nilay Patel: I think the podcast war is coming. I think the question of "why the podcast industry is not more like television" is because all those television companies have their own distribution. NBC owns antennas in the world and controls a point of massive distribution: the cable companies that sell to other cable companies, and that is a point of massive distribution. Netflix has an application with things that we all want. But podcasts, for a long time, have had a distribution point that mattered, which was Apple Podcasts. This is what I would describe as a timber organization that has not really driven innovation and distribution. And so, all the other innovations of business models require a new distribution. And I think it's only now that you see Spotify enter the game and you see Pandora entering the game and Luminary entering the game that the idea that this market will fragment has appeared.

Ashley Carman: Yes, since Apple had the majority of listeners' participation, it was the winners, but it did not matter. But now with Spotify that has a big part of the audio market and the ability to bring podcasts to many more people, I think we're going to start seeing more wars.

Nick Quah: I do not think we're still there.

NP: What I specifically mean as "the war" is true fragmentation where you have to pay $ 8 a month for Spotify get these four programs and $ 8 a month Luminary for these four programs and so on until it's like what we have with television and transmission.

NQ: My formula here is to ask who has power. And historically speaking, Apple has had that power. One could argue that it occurred inadvertently and that the increase in podcasting was unexpected and happened simply because a large realm did not really attend to a specific piece of land they owned. And then, when they saw a group of small people who came to build and plant small seeds here and there, they let them go, and they allowed it to flourish in a really interesting and balanced way. They did not change the way the land was watered or improve certain conditions of the land, but they allowed this place to be essentially a free space. And so there is a kind of power that comes from that impartial position. And so, for the longest time, year after year, there was a really slow but reliable growth, specifically within the Apple ecosystem.

Maybe there were smaller fiefdoms with other third-party applications like popular music, Stitcher or Overcast or whatever, but to a large extent, when we think of people who are trying to make money or create companies in the podcast space , they have to Think Apple when it comes to distribution. But after that, you do not have to think much because Apple has a certain set of rules, and there are a couple of black boxes in the way it works. But in a way it engendered a certain culture that seems to happen no matter what, it's generally fair, even if I look at a graphic and say: "What the hell is that with the graphics?" In general, because no publisher had direct relationships and it is not a real way to play with the system, there is a kind of leveling of power. You keep the cap low, and many people can benefit from that.

NP: They also offer virtually no data, which I think is a big part of this.

NQ: Absolutely. I hear many complaints from executives that this is a bad thing. But I think that because of the way an organic system works, it is an artificial limiter that allows a certain type of balance as long as one person is not more intelligent than the other. The structure means that everyone has eyes on the same playing field, but we cut to the present, which means that we are living in a society after 2014, that is, a subsequent post to Series a publication -Gimlet StartUp a post- Slow Burn a post- Dirty John. And there is a ton of investment interests and monetary interests now in podcasting, which then attracts Apple's competitors. We are thinking specifically about Spotify, specifically thinking about Pandora, but we have not seen how it will develop. Spotify sees the opportunity to diversify its assets, that is, move away from music and create another line of business and become an audio company that consumes everything.

This is a position where we could see Spotify increasing the total number of podcasts listeners, but also developing a power that could end up attracting certain podcasters to work outside the Apple system to allow Apple to do a certain amount of changes. to fundamentally complicate and restructure the way we think about Apple's podcasting.

So, that's not exactly a future that a lot of people are looking for, but a small number of people who are content to make a lot of money with this are looking for it. I mean, I do not know if I personally want this. I think my rule of thumb has always been as long as there are more people in the world, it is not a podcast as long as there are more people who can work on podcasts and make money from it. And as long as there is more money, we should generally be fine. But the question is: if this is going to be a direct oligopoly, which is a pair of large platforms that crash into each other, or if Apple is going to hold the position and simply say, "We're going to serve the open ecosystem," is a perfectly acceptable and perfectly good lane. But it is not necessarily within Apple's long-term commercial interests. If what we are seeing on the side of television and the side of the music is true, that convinces them otherwise.

NP: Apple reinvents itself as a service company.

AC: I'm trying to think about how advertising technology plays in these types of decisions because Spotify is an opt-in. People can insert their own RSS feeds, and you allow Spotify to swallow your RSS feed. So it does not run in RSS at all. But when you sign up, you say, "Okay, you're giving me access to millions of people. In addition, I'm getting a really robust analysis platform, unlike any other analysis platform like Apple that is starting to dabble. "I'm curious if Spotify is looking for ads and if there is a world in which Spotify is an ad network and starts to create money for podcasters with the capture that their program should be exclusive to Spotify, I guess I'm just thinking about how Stitcher has Midroll, which is basically an advertising network and I wonder how ad networks are going to influence the industry and where people make decisions to put on their shows.

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