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Spotify for podcaster7/25/2023 The dumbness wasn't "the bet" but how they structured it. ![]() I think it happens most with M&A where a company makes a land-grab investment that is fundamentally defensive in character (I think Spotify felt they needed original content), and it almost never works because it largely comes from execs feeling the need to juice numbers for comp packages rather than actually put down a long-term plan for investing capital (so some much smarter person comes along and tells them they have a solution and basically robs shareholders blind, in this case it was Joe Rogan).Īnd yes, they are dumb. DIS, they just acquire something working and just pound out low-risk additive investments.and DIS only started doing this after, you guessed it, missing on some very high-risk, big budget investments like John Carter) and it working very well.īut I wasn't even thinking of media. What other things? I can think of multiple other situations just in media where this hasn't worked: NFLX, AMZN, Overwatch League, YouTube Gaming/Facebook Gaming/Mixer.there are specific instances of companies doing the opposite (i.e. Yes, we live in a world where a business exec can waste billions of dollars on a totally unfounded hunch, they don't think it over, they don't look at the numbers, they are just like everyone else and will repeatedly do things that make no sense at all (it is actually far easier for someone who isn't in the industry and without business training to spot this.when people are in this situation and getting paid $10m/year for nothing, they tend to think they are geniuses and everyone else an idiot and end up making decisions like this). Paying $200m for Joe Rogan, $30m for Markle.these deals made no sense regardless of any economic model (as I allude to above, they also did strange deals where they tried to bring in someone from outside podcasting).Īnd the reason I wrote the meta thing at the end: I have seen companies do this repeatedly and I have seen young equity analysts get caught up in it because they think the same way you are thinking. To be clear, the mistake wasn't the strategy, it wasn't being wrong, the mistake was choosing to flamboyantly set fire to billions of dollars for no reason. It never does, it is horrible to read about because people get canned (less so in this case, this spending was clearly an extension of a prominent exec's social life) but you just see it every time with these "land grab" strategies. ![]() ![]() I remember when I first saw this happen.I literally couldn't believe it, these execs knew the business, they were so smart, had to work. They don't think: if we spend all this money, we will have to get a return.the product is free today, is there enough juice here? What will consumers pay?Ĭharging money impacts the level of demand, spending money like this is literally putting a noose around your neck with investors. They think: we will flood this space with money, drive out competition, and then jack up the price. The problem with this strategy is that most execs don't think through the higher levels (which is what went wrong here). > The company said in 2021 that it overtook Apple as the biggest platform in podcasts, and the company is similarly neck-and-neck with SiriusXM as the biggest podcast network, making the company both one of the biggest producers of podcasts and the place where most people listen to them Of course it's not over yet, and Spotify remains in the game, along with others trying to capture podcasting in walled gardens. > The company saw podcasting as a rapidly growing space without middlemen.Īnyone else see the irony there? Without middlemen? Spotify was trying to cement itself as the middleman in as much podcasting as possible, right? Or maybe it's not irony, it's exactly that, Spotify saw a space without middleman and thus an opportunity to lock itself in as the middleman. ![]() And that nobody else can pull it off either. I have noticed Spotify trying to funnel a decentralized podcasting ecosystem based on RSS into their own walled garden, with some pretty big plays - it would be really encouraging if they fail at this! I sure hope so. By 2021, Spotify had paid to sign some of the biggest names in podcasting, and it was ready to start squeezing its competitors… Now, Spotify chief content officer Dawn Ostroff - a TV veteran most famous for bringing Gossip Girl to the CW - was ready to stop many of these creators and companies from sharing podcasts on Apple and Amazon, and keep the content exclusively on Spotify.
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