Spotify is now matching your music taste to podcasts. The new predictive algorithm is one of a host of new products the Swedish company announced Monday.
It also unveiled a new premium service called HiFi with improved sound and a Snapchat-like feature for artists to share video clips.
<p>The moves are part of Spotify's ongoing effort to expand beyond music and become the primary platform for all audio creators and consumers. </p><p>The company has been on an acquisition spree over the past several years, which has included podcast content studios The Ringer, Parcast and Gimlet and podcast creation services like Anchor and Megaphone. </p><p>And it's about to release more original podcasts as it expands partnerships, including "Batman Unburied," created with Warner Bros. and DC; a new project from Ava Duvernay and a program featuring Barack Obama and Bruce Springsteen. </p><p>"The creative economy is exploding," said chief executive officer Daniel Ek. "So far, that explosion has been largely taking shape across video, with companies of all sizes focused there, and new ones entering the market all the time…(But) rather than focusing where everyone else is, we decided to go all-in on audio."</p><p>Monday raised the stakes on that bet. Here's a rundown of some of the more notable announcements:</p><h2>New Products</h2><p class="shortcode-media shortcode-media-youtube">
<span style="display:block;position:relative;padding-top:56.25%;" class="rm-shortcode" data-rm-shortcode-id="1abf7607e4183fb2106656d3ef8fefaf"><iframe type="lazy-iframe" data-runner-src="https://www.youtube.com/embed/W07MvWbuWkI?rel=0" width="100%" height="auto" frameborder="0" scrolling="no" style="position:absolute;top:0;left:0;width:100%;height:100%;"></iframe></span>
<small class="image-media media-caption" placeholder="Add Photo Caption...">Stream On: The power of HiFi - Billie Eilish & Finneas</small>
</p><p><strong>New Subscription Tier</strong>: Spotify HiFi will provide subscribers a more refined, "high-end" audio experience. The new tier will roll out in select markets later this year, and will ostensibly compete with other premium streaming services like Tidal and Amazon Music HD.<br/></p><p><strong>Spotify Clips</strong>: Building on the company's incremental incorporation of video onto its platform, Spotify announced the launch of "Clips," a new feature for artists to share short videos. Described by Chief Content Officer Dawn Ostroff as a way to "give many of our most popular artists a new way to connect with their fans," Spotify Clips looks similar to the Stories feature that Snap pioneered and which subsequently became a staple of Instagram. <strong></strong></p><p><strong>New Artist Marketing Tools</strong>: Over 1 million artists use Spotify's suite of artist marketing and data analytics tools each month, said Head of Marketplace Charlie Hellman. "Spotify for Artists" will be made available in 25 additional languages. Among those tools is Canvas, which allows artists to upload visual material to complement their music. Described by music star Halsey as the modern form of album art, Canvas will now be available to all artists following a limited run. Marquee, another artist tool that allows musicians and their teams to sponsor music recommendations, will also be expanding later this year.</p><p><strong>More Personalized Playlists</strong>: Spotify's chief R&D officer Gustav Söderström underscored the abundance of content on the platform by noting that if someone wanted to listen to the over-50,000 hours of music and podcasts uploaded to Spotify every single day, it would take them over five years. To help users navigate this ocean and discover new music, the company has invested into algorithms that use a combination of machine learning and human curation to build playlists. More of these are coming, with Söderström highlighting that soon the platform's "Daily Mix" franchise, which offers playlists tied to topics like specific genres and decades, will be updated daily.</p><h2>Podcasting Plans</h2><p class="shortcode-media shortcode-media-youtube">
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<small class="image-media media-caption" placeholder="Add Photo Caption...">Renegades: Born in the USA | A Spotify Original Podcast | From Higher Ground</small>
</p><p><strong>WordPress Partnership</strong>: Podcast creators using Spotify's Anchor platform will now be able to "quickly and easily turn written content directly into podcasts," said Sara Lerner, Spotify's head of strategy for podcast formats. "We think this is going to empower a whole new group of creators, people who have historically been more focused on the written word."<br/></p><p><strong>Interactive Podcasts</strong>: Podcasters will be able to incorporate polls and Q&As in real time to interact with their listeners. </p><p><strong>New Podcast Content</strong>: Spotify announced a variety of new podcast series, including "Renegades: Born in the USA" hosted by Barack Obama and Bruce Springsteen, "Batman Unburied" in partnership with Warner Bros. and DC, and a new project from Ava Duvernay. </p><p><strong>Podcast Discovery</strong>: Spotify will soon be unleashing its recommendation algorithms to power podcast discovery. This will include using predictive algorithms to recommend podcasts based on users' musical tastes and allowing users to search for podcasts by theme and topic, based on a machine-learning analysis of episode content. </p><p><strong>Growing Podcast Monetization</strong>: Spotify's big bet on podcasts comes with an expectation that the still small podcasting market will grow. Ostroff pointed out that although the terrestrial and satellite radio market is about $30 billion, it remains plagued by limited data for advertisers to target listeners with precision. That murky data has carried over into podcasts but, she said, Spotify has been able to change the game here by switching the mode of podcast access from downloads to streaming. To build on that and help marketers reach podcast listeners with targeted ads, Spotify will be launching Spotify Audience Network, a new marketplace for advertisers to buy ads on podcasts. The company also announced that Ad Studio, another channel for marketers, will begin being beta-tested for podcasts. Finally, the company is going to begin testing letting podcasters charge for paid subscriptions.</p><h2>Expansion Plans </h2><p><strong>Eighty-five new markets, 36 new languages</strong>: Already available in 93 markets, where it reaches 345 million users and hosts content from over 8 million creators, Spotify will be expanding over the next few days into new markets across Asia, Africa, the Caribbean, Europe and Latin America. This, Ek said, will make Spotify accessible to over 1 billion new potential customers. The company will also nearly double the number of languages in which it's available, to over 60. </p>
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A consortium including the Chinese-based music platform Tencent Music Entertainment announced Friday it has bought another 10% stake in Universal Music Group, which values the company at 30 billion euros. It bumps the consortium's total stake in the L.A.-based music giant to 20%.
The move will help TME's parent company Tencent broaden its reach as a leading player in music and gaming across China.
<p>"Tencent owns the three largest digital music services in China and has been investing in other services and music-based content around the world," said Larry Miller, a professor music business at NYU Steinhardt. "It provides a view of what is happening on the supply side at the world' largest music company."</p><p>The transaction is slated to close in the first half of 2021, subject to regulatory approvals, TME said.</p><p>UMG's parent company Vivendi SA also said Friday it has plans to sell additional minority stakes in Universal ahead of a listing in 2022. </p><p>The French media conglomerate said it would use cash from these transactions to reduce financial debt and finance share buyback and acquisitions. </p>Last month, Tencent <a href="https://dot.la/wave-concert-2648984388.html?q=tencent" target="_self">acquired a minority stake</a> in the L.A. virtual concerts company Wave and it also owns stakes in Spotify and Warner Music Group.
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Sonos — a company known for their speakers — is quietly becoming a player in the world of audio content. The company launched Sonos Radio earlier this year and last week investing in the studio that produced Demi Moore's series "Dirty Diana."
The Santa Barbara-based manufacturer led a $6.4 million Series A round into QCODE, the Los Angeles podcast startup run by a former Creative Artists Agency talent agent. C Ventures also joined the round. Sonos is taking a page from other tech giants that have been acquiring and investing heavily in small podcast studios.
<p>
The podcast rush is in full force as Hollywood mines podcasts for movies and music streamers compete for content.
</p><p>
Last year, Spotify bought Gimlet Media and Anchor. At the same time, radio veteran Entercom bought independent studio Pineapple Street Media and Cadence 13. Spotify is now eyeing TV and film production, further breaking down the lines between the mediums. Wondery, the studio behind "Dr. Death" and "Dirty John" is looking for its own buyer.
</p><p>
As for Sonos, spokesperson Nora Hickey said the investment was an effort to improve user experience across "every audio touchpoint."
</p><p>
Los Angeles-based QCODE has produced eight shows since 2019, several of which have been auctioned for film and television, including "Dirty Diana." Amazon picked up the 6-part erotic drama for a TV series.
</p><p>
CAA agent Rob Herting, who for 10 years represented mostly writers and filmmakers, founded the podcast studio with an eye toward narrative stories.
</p><p>
"I listened to podcasts in my spare time when my eyes were sore at the end of the day," Herting said. "I really got into it and started to think more and more about it more as a new avenue for original storytelling."
</p><p>
But, when he left CAA to start QCODE last year, companies often told him the scripted fiction he wanted to produce wouldn't catch on. He often heard it was "really hard to do" and didn't make money.
</p><p>
"It's radically different right now," he said. "Everyone seems to be making these shows now. Obviously, the space in general is evolving."
</p><p>
He said that while a handful of companies are making fiction podcasts and scripted shows, there's still room for more. These types of podcasts could eventually overlap with audiobooks, an industry that's taken off. Last year audio book sales hit $1.2 billion, according to a <a href="https://www.audiopub.org/uploads/pdf/2020-Consumer-Survey-and-2019-Sales-Survey-Press-Release-FINAL.pdf" rel="noopener noreferrer" target="_blank">study</a> from Edison Research.
</p><p>
Herting could not yet say whether his studio would begin producing exclusive content for Sonos Radio, which launched earlier this year to feature Sonos products. The add-free station streams original programming and music from partners like iHeartRadio.
</p><p>
That prospect, coupled with QCODE's talent pipeline, might explain where the money is in this investment round, James Cridland from the news site Podnews said.
</p><p>
"Sonos perhaps sees it as helpful to own more exclusive content for their speaker systems," he said. "It seems clear to me that the value of many podcast studios and networks has been, in part, driven by the value of their IP rather than solely their podcast properties."
</p><p class="shortcode-media shortcode-media-rebelmouse-proxy-image">
<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.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.5B7AmutozNziX0vqlaZv3fxrr5vpReZl2FJiXd3cYd0/img.jpg" id="20492" class="rm-shortcode" data-rm-shortcode-id="f2c8b20b2f644e70f85f947fdafeee30" />
<small class="image-media media-caption" placeholder="Add Photo Caption...">L.A.-based QCODE produced Demi Moore's series "Dirty Diana."</small>
</p><h2>The Podcast Rush</h2><p>
Individual podcasts are also getting gobbled up by big names in the industry. Gridland said "The Joe Rogan Experience," a talk show Rogan has hosted since 2009, will become exclusive to Spotify on December 1 as the company looks to distinguish itself in the increasingly crowded space.
</p><p>
"These startups are nimble and very quickly navigating an ever-changing landscape, and thus are positioning themselves to be ripe for acquisition by many of the major media companies entering the space," said Adam Friedman, a global client strategy executive at CAA and investor at Connect Ventures. </p><p>
Herting said that his studio looks for writers and producers with ideas that could grow into other mediums. But auctioning them for the screen isn't the primary goal.
</p><p>
"It's definitely part of the calculation," Herting said. "They don't get picked up for TV or film if they don't work well for audio first. What's exciting for us is creating a show in audio that can grow into other mediums but still live in audio."
</p><p>
A number of smaller and independent producers are churning out scripted fiction podcasts, he said, and now bigger names like iHeartRadio are following suit. It could be where the industry is headed.
</p><p>
"With everything that's going on in the world and in the country, I do think there's this element of escapism to it," Herting said. "We've all been cooped up in our homes scrolling through Netflix. This is another avenue of storytelling where you can really sink into things and you don't have to be planted on your couch to do so."
</p><p>**<em>This story has been updated to clarify Adam Friedman's investment position and include C Ventures as an investor.</em><br/></p>
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