Having established itself as a top streaming service with now more than 200 million users, Spotify this year is preparing to focus more of its attention on podcasts. The company plans bring its personalization technology to podcasts in order to make better recommendations, update its app’s interface so people can access podcasts more easily and broker more exclusives with podcast creators. It’s also getting into the business of selling ads within podcasts as a means of generating revenue from this increasingly popular form of audio programming.
In fact, Spotify has already begun to dabble in podcast ad sales, ahead of this larger push.
Spotify, we’ve learned, has been selling its own advertisements in its original podcasts since mid-2018 year, including in programs like Spotify Original “Amy Schumer Presents: 3 Girls, 1 Keith,” “The Joe Budden Podcast,” “Dissect,” “Showstopper” and others. With more exclusives planned for the year ahead, the portion of Spotify’s ad business focused on podcasts will also grow.
The company appears to be taking a different approach to working with podcasters than it does with working with music artists.
Today, Spotify gives artists tools that help share their work and be discovered — it invested in distribution platform DistroKid, for example, and now lets artists submit tracks for playlist consideration. With podcasters, however, Spotify wants to either bring their voices in-house, or at least exclusively license their content.
“Over the last year, we become very focused on building out a great podcast universe,” said head of Spotify Studios Courtney Holt, speaking at the Consumer Electronics Show (CES) in Las Vegas this week. “The first step was to make sure that we’ve got the world’s best podcasts on Spotify, and integrated the experience into the service in a way that allowed people to build habits and behavior there,” he said.
“What we started to see is that the types of podcasts that really were working on Spotify were ones where they were really authentic voices… so we just decided to invest more in those types of voices,” Holt added.
Spotify’s collection of originals has been steadily growing over the past year. Last August, for example, Spotify nabbed an exclusive deal with the “Joe Budden” podcast, which is aimed at hip-hop and rap culture fans, and launched its first branded podcast, “Ebb & Flow,” focused on hip-hop and R&B. Its full original lineup today also includes “Dissect,” Amy Schumer’s “3 Girls, 1 Keith,” “Mogul,” “The Rewind with Guy Raz,” “Showstopper,” “Unpacked,” “Crimetown” (its first season was wide, the second season is exclusive to Spotify), “UnderCover” and “El Chapo: El Jefe y su Juicio.”
At CES, Spotify announced the addition of one more — journalist Jemele Hill is coming to Spotify with an exclusive podcast called “Unbothered,” which will feature high-profile guests in sports, music, politics, culture and more.
In growing its collection of originals, the company found that podcasters who joined Spotify exclusively were actually able to grow their audience, despite leaving other distribution platforms.
For example, the Joe Budden podcast had its highest streaming day ever after joining Spotify.
This has led Spotify to believe that influencers in the podcast community will be able to bring their community with them when they become a Spotify exclusive, and then further grow their listener base by tapping into Spotify’s larger music user base and, soon, an improved recommendation system.
There are other perks for Spotify, too — when users come to Spotify and begin to listen to podcasts, they often then spend more time engaged with the app, it found.
“People who consume podcasts on Spotify are consuming more of Spotify — including music,” said Holt. “So we found that in increasing our [podcast] catalog and spending more time to make the user experience better, it wasn’t taking away from music, it was enhancing the overall time spent on the platform,” he noted.
While chasing exclusive deals to bring more original podcasts to Spotify will be a big initiative this year, Spotify will continue to offer its recently launched podcasts submission feature to everyone else.
With this sort of basic infrastructure in place, Spotify now wants to help users discover new podcasts and improve the listening experience.
One aspect of this will involve pointing listeners to other podcast content they may like.
For instance, Spotify could point Joe Budden fans to other podcasts about hip-hop and rap. It will also leverage its multi-year partnership with Samsung to allow listeners to pick up where they left off in an episode as they move between different devices. And it will turn its personalization and recommendation technology to podcasts — including the ads in the podcasts themselves.
“Think about what we’ve done around music — the more understanding you have around the music you stream, the more we can personalize the ad experience. Now we can take that to podcasts,” said Brian Benedik, VP and Global Head of Advertising Sales at Spotify, when asked about the potential for Spotify selling ads in podcasts.
The company has been testing the waters with its own podcast ad sales since mid 2018, Benedik said. The sales are handled in-house by Spotify’s ad sales team for the time being.
Benedik had also appeared on a panel this week at CES, where he talked about the value of contextual advertising — meaning, ads that can be personalized to the user based on factors like mood, behavior and moments. This data could be appealing to podcast advertisers, as well.
But to scale its efforts around podcast ads, Spotify will need to invest in digital ad insertion technology. We’re hearing that Spotify is currently deciding whether that’s something it wants to build in-house or acquire outright.
Spotify’s rival Pandora went the latter route. It closed on the acquisition of adtech company Adswizz in May 2018, then introduced capabilities for shorter, more personalized ads in August. By November, Pandora announced it was bringing its Genome technology to podcasts, which allowed for a recommendation system.
Now Spotify aims to catch up.
The addition of podcasts has reoriented Spotify’s focus as a company, Holt said.
“We’re an audio company. We’re trying to be the world’s best audio service,” he told the audience at CES. “It’s a pure play for us. We’re seeing increased engagement; there’s great commercial opportunities from podcasting that we’ve never seen on the platform… and, obviously, exclusives are to give us something that makes the platform truly unique — to have people come to Spotify for something you can’t get anywhere else is the sort of cherry on top of that entire strategy,” Holt said.
Image credits: Spotify
Facebook announces new audio products – TechCrunch
Facebook reveals its Clubhouse competitor, Parler will return to Apple’s App Store and a helicopter flies on Mars. This is your Daily Crunch for April 19, 2021.
The big story: Facebook announces new audio products
Yes, these products include new Clubhouse-style Live Audio Rooms, as well as the ability for podcasters to share long-form audio, some new Spotify integration and a shorter format called Soundbites. Facebook is starting off by testing Live Audio Rooms in Facebook Groups.
“When we launched video rooms earlier last year, groups and communities were one of the bigger areas where that took off,” CEO Mark Zuckerberg said in an interview with Platformer. “So, I think around audio, just given how much more accessible it is, that’ll be a pretty exciting area as well.”
The tech giants
Apple confirms it will allow Parler to return to App Store — Apple says that after Parler’s proposed updates, it should be approved for reinstatement to the App Store.
Consumer agency warns against Peloton Tread+ use, as company pushes back — The U.S. Consumer Product Safety Commission is warning consumers to stop using the Tread+.
Xbox Cloud Gaming beta starts rolling out on iOS and PC this week — The service has been available in beta for Android users since last year, but it has been slow to expand to other platforms.
Startups, funding and venture capital
Clubhouse closes an undisclosed $4B valuation Series C round, as tech giants’ clones circle — We don’t know how much it raised, but it looks like Clubhouse has tripled the valuation it attained in January.
Alan raises $220M for its health insurance and healthcare super app — The company now covers 160,000 people.
General Motors leads $139M investment into lithium-metal battery developer, SES — GM is the latest big automaker to pick a horse in the race to develop better batteries for electric vehicles.
Advice and analysis from Extra Crunch
The Klaviyo EC-1 — Klaviyo may not be a household name yet, but in many ways, this startup has become the standard by which email marketers are judged.
European VC soars in Q1 — The blockbuster first quarter was not just an American affair.
Outdoor startups see supercharged growth during COVID-19 era — Startups that provide services like camper vans, private campsites and trail-finding apps became relevant to millions of new users when COVID-19 shut down indoor recreation.
(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)
NASA makes history by flying a helicopter on Mars for the first time — This is a major achievement, in no small part because the atmosphere is so thin on Mars that creating a rotor-powered craft like Ingenuity that can actually produce lift is a huge challenge.
An interview with Andrew Yang — The New York mayoral candidate talks Amazon, cryptocurrency and automation.
Geico admits fraudsters stole customers’ driver’s license numbers for months — The second-largest auto insurer in the U.S. has fixed a security bug that allowed fraudsters to steal customers’ driver’s license numbers from its website.
The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.
Feels is a new dating app with profiles that look more personal – TechCrunch
Meet Feels, a new French startup that wants to change how dating apps work. According to the company, scrolling through photos and reading descriptions tend to be a boring experience. Feels want to improve profiles so that navigating the app feels more like watching TikTok videos or browsing stories.
“For the past 10 years, there’s been little innovation in the industry,” co-founder and CEO Daniel Cheaib told me. “The reason why many people uninstall dating apps is that it’s boring. Profiles all look the same and we feel like we’re browsing a catalog.”
In that case, Cheaib is thinking about Tinder, but also other dating apps that feel like Tinder but aren’t exactly Tinder, such as Bumble, Happn, etc.
Feels’ founding team has spent two years iterating on the app to find out what works and what doesn’t. Now that retention metrics are where they’re supposed to be, the company is now ready to launch more widely.
If you want to show interesting content to your users in a dating app, you have to rethink profiles. Arguably, this has been the most difficult part of the development phase. When you install the app, it takes around 15 minutes to create your profile.
At first, only 30% of new users finished the onboarding process. Now, around 75% of new users reach the end of the signup flow.
So what makes a profile on Feels different? In many ways, a profile looks more like a story, or TikTok posts. Users can record videos, add text and stickers, share photos, answer questions and more.
“When you’re done with the onboarding process, you have consistent profiles with people sharing content about them,” Cheaib said.
Like other dating apps, there are many options when it comes to gender identity — you’re not limited to woman or man. You can then say that you want to see all profiles or just some profiles based on various criteria.
After that, you can look at other profiles. Once again, Feels tries to change the basic interaction of dating apps. Most dating apps require you to swipe left or right, or give a thumbs up or a thumbs down. When you think about it, it’s a binary choice that requires a ton of micro decisions.
Sometimes, you don’t have any strong feelings about someone. Or maybe you just want to go to the next profile. And the fact that you have to triage profiles like this leads to a lot negativity, whether it’s conscious or subconscious — you keep rejecting people, after all.
When you’re looking at a profile on Feels, it fills up your entire screen. Videos start playing, you can see what the person likes and who they are in front of a camera. You can react on some content or you can simply move on by swiping up. There’s no heart or like button.
When the startup thought they finally were going somewhere, they raised a $1.3 million funding round (€1.1 million) from a long list of business angels, such as somebody in Atomico’s business angel program, Blaise Matuidi, Eric Besson, René Ricol, Ricardo Pereira , Yohan Benalouane, Nampalys Mendy, Jean Romain Lhomme, Julien Radic and Jean Michel Chami.
Now, Feels plans to attract new users with organic TikTok posts, some TV ads and more. The company wants to reach one million users by the end of the year with a big focus on France for now. There are 100,000 users right now.
When it comes to monetization, Feels started offering a premium subscription to unlock more features. The company is still iterating on that part.
Feels is just getting started in a crowded and competitive industry. Unlike other companies, Feels has invested heavily in its own product before working on user acquisition and paid installs. It’s an ambitious strategy but it has a lot of potential as it could lead to a truly different dating app.
Social audio startup Stationhead looks beyond music as it hits 100K monthly active users – TechCrunch
When I’ve written about Stationhead in the past, I’ve focused on how the startup aims to recapture bring personality and interactivity of a live radio broadcast to streaming music. But CEO Ryan Star said his ambitions are broader now: “We’re going to be the largest social audio platform in the world.”
The startup says it’s growing quickly, with 100,000 monthly active users — a number that’s growing by 65% each month — and 500,000 total users. There are 6,300 hosts on the platform, and they created nearly 2 million live and recorded streams in the first three months of the year.
COO Murray Levison told me that the pandemic has brought more artists to the platform as they look for new ways to reach their fans. For example, Cardi B joined the fan show Bardigangradio last month, prompting 132,000 paid streams of her new single on Apple Music and Spotify during the broadcast. (Stationhead integrates with both music streaming services — when a DJ cues up a song, it’s actually playing through your account.)
At the same time, both Star (who co-founded the company due to his own frustrations as an independent musician) and Levison suggested that playing music is not quite as central to their vision as it used to be. Instead, they said Stationhead is all about live audio broadcasting, with or without music.
From a product perspective, Levison said they’re trying to build “the best broadcasting tools for creators and everybody people to use.” At the same time, he added, “Music is still at the core of what we’ve built. Just like games are to Twitch, music is our social glue.”
While the company emphasizes the live experience (which Levison described as “the core value prop”), Stationhead also supports recording shows for listening later, and apparently 50% of users are listening to both live and recorded shows. It has also been beta testing a tipping feature that will allow broadcasters to monetize their shows.
Of course, you can’t talk about social audio without talking about Clubhouse, which was attracting 2 million active users each week in January, according to CEO Paul Davison. Levison suggested that the buzz around Clubhouse has also benefited Stationhead as potential acquirers and investors get more excited about social audio. And Star argued that the companies are taking very different approaches.
“It’s in the name Clubhouse, it’s exclusive,” Star said. “It’s about social climbing and getting closer to the stage. [Stationhead is] living in the world where Cardi B was excited to meet her fans. We are for the 99 percent.”
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