Last week, the Verge reported a couple of stories that pointed towards Spotify’s post-music future. The first story was about the existence of “Car Thing”
, the name of Spotify’s extremely early, U.S.-only, car-specific music player. The company said that the device is for learning about how people use voice devices in the car, and not for immediate commercial distribution. However, the Verge did note that the company trademarked the phrases “Voice Thing” and “Home Thing” just to add a bit more fuel to the fire of that speculation.
Rumors of a Spotify physical device are not new
, but this vague product feels a bit like investor focus-grouped vaporware. That’s why I’d rather not equivocate and just flatly say there appears to be little, if any,
market desire for a Spotify-specific audio device in 2019—car, home, or otherwise. Yet, if such reporting provides the illusion of such company goals to people with money underwriting Spotify, then perhaps that’s all the work it needed to do.
Advertising accounted for less than 10% of Spotify’s revenue in the most recent quarter, and podcasting could raise that proportion in time, helping to turn Spotify into a profitable technology giant like Apple and Facebook Inc.
Spotify’s embrace of podcasting has unsettled the music industry. Industry sales have grown four years in a row, and paid streaming services led by Spotify now account for almost half of that figure. Record labels have scrambled to respond. Universal Music Group, the world’s largest music company, struck a deal with Wondery Inc. to co-produce podcasts.
Not to throw Daniel Ek’s own words at his face, but when the founder said that he’d like millions of artists to make a living off Spotify
, I’d like to get a straight answer on how musicians and podcasters could build sustainable careers from a single money-losing company. That claim falls apart even further when top music executives complain in the trade press
about falling Average Revue Per User (ARPU). If music executives and, more importantly, artists aren’t seeing enough money out of Spotify, then where are podcasters fitting within this fuzzy math? Should podcasters expect that Spotify, similarly to what it’s doing to songwriters, will attempt to surpress their wages
once the company needs to turn a profit?
Spotify’s rising emphasis on podcasts is an explicit attempt to shift listener habits from major label-controlled music towards podcasts, where the money brought in won’t simply funnel back towards record labels. (That podcasts are often 10x to 15x the length of a song is simply an added bonus.) It was even reported at the top of May that Spotify was testing the placement of podcasts
into listeners’ algorithmic mixes. These are attempts to convince their investors that they can shift consumer behavior enough so that they’re not constantly underwater thanks to major label content.
If one is an artist or a worker within the broader record label industry, none of this should be good news. If podcasts start to become more popular on Spotify and music listening starts to become a smaller piece of the overall listening pie, then expect to see Spotify’s own financials improve, while streaming payouts decrease. And don’t be shocked if the marketing arm of Spotify that puts so much money into artists at the moment shifts towards podcasts, where they’ll make a much better return on their investment. Okay, let’s actually look at this updated app.