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Yes, Spotify Has Made Another Big Acquisition

Photo-Illustration: Vulture, Spotify and Megaphone

The Swedish audio streaming platform announced the move to acquire Megapone this morning, stating in the official press release that it has “entered into a definitive agreement” to buy the podcast hosting platform currently owned by Graham Holdings. The deal is expected to come in at around $235 million, pending review, according to a person familiar with the matter, and employment offers are expected to be made to all current Megaphone staffers.

This acquisition doesn’t quite come out of nowhere, as Spotify has been using Megaphone to support at least some of its original programming portfolio for some time now. Also worth noting: Joel Withrow, the former Director of Product at Megaphone, joined Spotify in early 2019, and currently serves as a Group Product Manager at the company.

Megaphone was once known as Panoply Media, originating as a podcast-focused sister company spun out of Slate in February 2015. That early incarnation saw Panoply spread out across multiple lines of businesses: content production, ad sales, and hosting technology. As competition in the podcast space grew more intense, the company pivoted towards specifically focusing on hosting and ad tech in fall 2018, divesting from the content business as a result. Panoply officially rebranded as Megaphone in early 2019. (Full disclaimer: I worked at Panoply for a brief stint, well before it became what it is today.)

Part of modern Megaphone’s big pitch revolves around its Targeted Marketplace product, which was built to provide advertisers with better audience targeting, more granular measurement capabilities, and greater inventory scale, all of which were enabled by dynamic ad insertion. All these features relate to long-standing problems for podcast advertisers, and with that in mind, you can see what’s driving the thinking behind this deal: Spotify is acquiring Megaphone to advance its podcast advertising and monetization interest, currently anchored by its Streaming Ad Insertion (SAI) technology, and the pick-up would put the Swedish audio streaming platform in a stronger position to reshape the podcast advertising business as they see fit.

“What Megaphone represents is a big play for scale,” said Jason Richman, Spotify’s VP of Global Advertising Business and Platform. The SAI initiative was originally announced during CES at the top of this year, and had up until this point only been applied to Spotify’s original programming portfolio and made open to advertisers in limited capacity. Richman tells me that SAI inventory has since been sold out, and part of what Megaphone brings to the table is the ability to help Spotify increase that type of inventory and generate more returns on the advertiser front. Furthermore, integration between Spotify’s SAI technology and Megaphone’s Targeted Marketplace technology isn’t expected to produce much friction; as Spotify was already a Megaphone client, there had been some optimization towards the former’s needs and preferences beforehand.

The combination of these two distinctly scale and targeting-oriented podcast advertising solutions will probably unnerve some traditionalists who have long argued that podcasting’s relatively high-touch, analog, and friction-filled nature is part of what makes its default advertising product effective. What follows from that argument, then, is the notion that increased targeting, measurement granularity, and ad inventory management ease could fundamentally ruin what made podcast advertising great — and make it as screwed up as the rest of digital advertising.

I asked Richman about his thoughts on this, and of course, he disagrees. “It presupposes that the ad experience is going to get worse for the consumer, which is a premise I don’t buy,” said Richman. “We’re not operating from a position of ‘here comes programmatic advertising!’ but from a position of trying to fix problems while preserving what’s great about podcast advertising.”

Anyway, directly following from this acquisition, I’m told that Megaphone clients will now have access to SAI inventory. Whether or not all those Megaphone’s clients will stick around through the transition remains to be seen — in particular, I’d be curious about iHeartMedia, which has been a Megaphone client since January 2019. I’m sure there’ll be a lot more to shake out from this institutionally, and we’ll keep track of the details as they play out.

The steady drumbeat of consolidation in the podcast business continues. This development comes not long after SiriusXM’s acquisition of Stitcher, which was completed in October.

Union Groups in Spotify Continue to Push Contract Negotiation Process

All three podcast content companies that were acquired by Spotify since early 2019 — Gimlet, Parcast, and The Ringer — have officially unionized with the Writers Guild of America, East, and this morning, they’ve issued a joint statement pushing the Swedish audio streaming platform to engage them in “prompt and good-faith” contract negotiations.

Here’s the statement in full:

Gimlet, Parcast, and the Ringer are integral to Spotify’s ambitions to be the global leader in audio entertainment. But despite public assertions that Spotify values diversity, inclusion, and a healthy work environment, feedback from all three of our unions has been largely ignored. We have been met with delayed bargaining dates. And those of us in bargaining have seen Spotify simply copy and paste its existing policies into contract proposals, and cross out our proposals rather than offer counters. These practices purposefully delay substantive bargaining that could lead to contract ratifications.

We stand together as colleagues and fellow union members in calling for across-the-board increases, fair salary minimums, employee rights to derivative works, increased workplace diversity, and pathways to promotion. These items are not only essential to building a more equitable and inclusive workplace, but are also essential to reaching Spotify’s own goals of leading the world in audio. We are committed to working toward them together. We call for prompt and good-faith negotiations at the bargaining tables.

Speaking with a representative from the Gimlet Union yesterday, I was told that the joint statement is largely meant to serve as a show of solidarity between all three content units, which the rep cited as having shared goals and points of interests, though the undercurrent of frustration with the pace and nature of negotiations should also be noted.

The rep also notes that part of what’s driving this organizing push forward is a desire to serve an example for the industry as a whole. “If Spotify’s goal is to lead the world of audio, we see this as a really great way to set the standard of what a really good contract looks like in this industry,” the rep said.

News, broadly…

➽ Pushkin Industries announced a new sales and production partnership with iHeartMedia yesterday. They were previously repped by Cadence13, now owned by Entercom.

➽ Jane Coaston, a senior politics reporter at Vox who was also a panelist on The Weeds, is moving to New York Times Opinion where she has been named host of The Argument.

Decoder with Nilay Patel, the successor to Recode Decode with Kara Swisher, launches today.

➽ Haley O’Shaughnessy, formerly of The Ringer, is joining Blue Wire Podcasts, a sports podcast startup that raised $1.2 million in seed funding earlier this year, where she’ll launch a new NBA podcast, among other things. Her departure from The Ringer was originally announced at around the same time as Jason Concepcion, marking a boomlet of intriguing podcast-related departures from The Ringer in recent days.

➽ NPR’s podcast-to-radio pipeline deepens. From Current: “NPR will begin offering stations radio versions of its podcasts Code Switch and Throughline beginning next year.”

For the Columbia Journalism Review, Caroline Lester dives deep into the public media system’s recent reckoning with race, diversity, and equity.

A New Union for the U.K. Audio Industry

As the US podcast industry continues to see more labor organizing, the podcast labor movement in the UK begins to take shape.

The first union aimed specifically at UK podcast workers — both freelance and those already working in organizations — was established recently, situated within the Bectu union, formerly known as the Broadcasting, Entertainment, Communications and Theatre Union, which currently represents about 40,000 people primarily working in the UK’s film and television industries. The entity has been in the works for quite some time now, dating back to early 2020, when two London-based audio producers, Lily Ames and Sarah Myles, contacted Paddy Emond, a Bectu organising official in the London Production Division, about setting up a podcasting union.

Myles told me that while there were a few different motivations for wanting to organise now, a lot of it boiled down to giving podcasting the same kind of “official” status as TV, film and radio. In addition, she hoped that it would create a sense of community and help those who work mostly alone feel more connected to their peers. A union gives workers power, she said.

“Just to have something that says this is an official job, let’s see it in the same light as doing camera work for film. Let’s take it seriously,” Myles continued. “It just makes it more official, and gives people a lot more power if someone’s trying to charge a rate and you’re not happy with it, then you’ve got something to stand by that says this is actually the official rate.”

The case for unionisation can be broadly broken down into two components, Emond argues. “There’s sort of having an official community. I think that’s number one,” he said. “The UK Audio Network and organisations like that are completely invaluable, but having that sort of organised community, I think it’s really very useful. The second is, from a legal point of view, I think being an officially recognised trade union means that you can negotiate with the employer and trade bodies take notice of you in a way they’re just not going to take notice unfortunately of pressure groups and campaigning groups and things like that.”

In addition, Bectu members also receive discounts on things like insurance and financial advice, and in the event of a member experiencing unfair dismissal or other workplace discrimination, the union will pay the legal fees.

Having the podcasters’ union established with Bectu brings additional benefits, Emond said, as it allows the union’s organisers to apply the lessons learned from operating in the film and TV industries to audio. Given that workers in those sectors also tend to be mostly freelance, he expects the branch to operate in a similar way.

“What we’ve managed to do with those sectors is build up a high level of membership and get it to a point where it’s actually in the trade bodies’ interest to negotiate directly with the union,” he explained. “We’ve been able to set the minimum terms when it comes to working hours, how much you should get paid if you’re working for the sixth or seventh consecutive day, things like that. And so we’ve been able to make a demonstrable difference, despite them all being freelancers.”

Another transferable aspect from film and TV, he hopes, is the idea that just because working in media is perceived still as “glamorous” or a dream career in some quarters, that those workers don’t deserve proper pay and conditions. “You know, this is still a living. You’re not here for your health. You have to make a good, happy life for yourself. Just because you’re passionate about something doesn’t mean you should be exploited for it,” he said.

This echoes something that Myles told me about the changing nature of the UK audio scene. “I think initially podcasting was a lot of people from radio moving over, but that’s kind of changed now,” she explained. “You can even see that in the day rate. I mean, I can only speak from my own experience, but when I worked in radio, my day rate was a lot lower than what I would have gotten in podcasting if podcasting was a thing then.” In other words, now that there are people actively entering podcasting as a career path, rather than entering the labor force from the side, this feels like the right time to formalise podcast production as a “real job” via unionisation. Emond also pointed to the recent establishment of The Creator Union, a trade union for influencers, as a parallel example of this happening simultaneously in another sector.

Initially, Myles, Ames and Emond organised a survey of people working in UK podcasting to find out what they might want from a union. A few things quickly emerged, Emond said, which chimed with the topics that had already come up as motivators for wanting to organise in the first place. These included mental health issues, long hours, and pay that isn’t representative of the work being done.

The Black Lives Matter movement has also been a big influence on the process, Myles explained, in galvanising the union formation as a tool to address racism and discrimination in the industry. “I’m just hearing so many stories from my friends about the racism that they experienced in the workplace,” she said. “I’ve never experienced racism because I’m white, but just hearing all those stories and all this horrible stuff about bullying and racism, I felt like a lot of people just decided enough is enough, I can’t take this anymore. I felt like we need to organise something and we need to gather together and stop these things from happening.”

Once the survey had established the priorities for the union and that there was an appetite for it among those in the industry, Emond and Bectu went ahead and set up the podcasters’ branch. The next step is to recruit members, an effort that begins via a webinar tonight at 6.30pm GMT, at which Emond, Myles and Ames will speak about their aims and take questions from attendees. “If we can get a couple of hundred members in the next couple of weeks, which I think is reasonable, then we can get up and running very, very quickly,” Emond said.

Members will then elect a committee to start taking action on their priorities — Emond and his organiser colleagues will facilitate, but all decisions will be taken by the elected body and the members. An early move is likely to be the publication of a rates guidance, a rate card format common across lots of Bectu branches in different industries, which sets out the union-approved rates for work. There have been efforts to establish something like this in the past via the UK Audio Network listserv, but Emond hopes that a document with Bectu’s influence behind it will have greater weight.

The ongoing restrictions imposed by the Covid-19 pandemic — the UK just entered a new national lockdown last Thursday — have slowed progress a bit. But Emond was upbeat about the possibilities offered by digital organising for fledgling union branches like this one, because the barriers to initial participation are much lower. “With a Zoom meeting, people can decide to come literally last minute. They don’t have to plan who’s going to look after their two year old. They don’t have to think about what they’re going to eat for that tea because they can just sit there and have their dinner while they’re learning about trade unionism. I think it’s great. It’s made my life a lot easier.”

The real tests of Bectu’s podcast union branch will, of course, be whether people choose to join it and whether it can improve working conditions for those in the UK’s audio industry. The trade body situation for podcasters is perhaps slightly less clear cut than it is for those working in film and TV, although the audio producers’ association Audio UK seems a likely focus of attention. Big employers of audio freelancers, such as the BBC and larger production companies, will also feature heavily in the union’s activity, I suspect. But regardless of what short or long term changes it brings about, the fact that there is appetite for it to exist at all is a major signal of how rooted podcasting has become in the UK’s media landscape.

In tomorrow’s Servant of Pod Marc Smerling is on the show this week.

If you’ve spent any time at all over the last few years thinking about the sprawling history of crime and politics in Providence, Rhode Island, that’s probably because you’ve listened to the insanely popular Crimetown, which Smerling created with Zac Stuart-Pontier in partnership with Gimlet Media back in 2016. (Or maybe, you know, you’re from there.)

Smerling is also a true crime legend in general, as you might know, with a stacked resume that includes Capturing The Friedmans, Catfish, and of course, The Jinx. (“I killed them all, of course.”) His most recent projects are FX’s Wilderness of Error — which, by the way, I really enjoyed — and its companion podcast, Morally Indefensible. Both those efforts were made through his new production company, Truth Media.

In this interview, we talk about why he feels so drawn to podcasting, how he thinks about the vast popularity of the true crime genre in general, and what it was like to build a true crime podcast at Gimlet Media at a moment when both those things were still pretty young.

You can find Servant of Pod on Apple Podcasts, Spotify, or the great assortment of third-party podcast apps that are hooked up to the open publishing ecosystem. Desktop listening is also recommended. Share, leave a review, so on.

A premium podcast plan for Spotify? Let’s not get too ahead of ourselves with this one.

On Friday, Andrew Wallenstein, president and chief media analyst at Variety’s intelligence platform, published a Twitter thread drawing attention to a survey that was served to him over the Spotify app recently, in which the company seems to be soliciting feedback on the idea of establishing a “premium podcast plan” on the platform. The survey specifically asks the recipient to visualize a service that stands separately from Spotify’s existing music-focused plan offerings.

The Verge spotted Wallenstein’s observation, spinning it out as a blog post that you can find here. When contacted, a Spotify spokesperson told The Verge that “the survey should not be taken as concrete product plans” — which is to say, don’t read too much into it.

And neither should you, frankly. At least, not yet. As a tech company, Spotify generally seems to like throwing experimental stuff at the wall, eagerly and constantly, with only some of those things being actualized in the end. This survey looks to me like a simple data-gathering process to roughly assess whether this is a viable option to explore, and so it remains to be seen whether it’ll shake out to be anything greater than that.

For what it’s worth, I think spinning out a premium podcast plan that’s separate from the current Spotify Premium would be a dumb idea. The power is in the bundle, and they’d be better off experimenting with integrating some premium podcast architecture into the preexisting Spotify Premium offering. Such a move would also set the company to directly face off with a fully bundled competitor like Audible. At this point, they are all well within each other’s space of competition.

For more analysis… I highly recommend this write-up by the dude Josh Benton over at Nieman Lab, who has some thoughts.

Friday Evening News Dump: Bloomberg with a scoop late Friday, as much of the country grew intimate with John King and Steve Kornacki: Apple and Sony Music have apparently held talks about possibly acquiring Wondery.

From the report:

Apple and Sony are two of at least four companies that have discussed a deal with Wondery, according to one of the people. Though Spotify Technology SA has been the most aggressive buyer of podcasting companies over the last two years, the Swedish audio giant decided not to bid, said two people with knowledge of the talks. A deal is expected in coming months, but there’s no guarantee that the discussions won’t fall apart.

This comes about a month after another Bloomberg scoop that Wondery had hired financial advisers “to explore strategic options, including a potential sale,” with the company said to be eyeing between $200 million to $400 million for an acquisition.

The specifics of this development shouldn’t be terribly surprising. As I wrote in my initial analysis, Wondery is one of the very few buyable podcast companies operating at reliable scale, and you have to imagine that any media corporation or conglomerate with deep enough wallets would be interested in at least kicking the tires. As such, you should interpret this development (and the existence of this Bloomberg report more generally) as part and parcel of that exploratory process. That Spotify decided against pursuing a deal also shouldn’t be terribly surprising; I’d argue there is far too much overlap with Parcast already in-house.

What might be surprising, at least to some folks, is the presence of Apple among the reportedly interested parties. Here’s how you should think about this: a theoretical acquisition of Wondery by Apple would be less about Apple’s place in the podcast ecosystem and more about Apple’s broader media business, particularly with respect to Apple TV+.

After all, Wondery’s unique value proposition revolves around its distinct strength with the podcast intellectual property pipeline, and it’s safe to say that any media conglomerate with a video streamer — including Apple — could benefit from bringing a focused and cost-efficient IP generator into the fold.

Anyway, keep in mind: the fundamental question with this story isn’t about whether Wondery will get acquired, but whether the company will be bought at the price it wants. A smaller related question is whether potential acquirers put much weight on Wondery CEO Hernan Lopez’s current legal situation. He continues to face corruption charges around the 2015 FIFA scandal, to which he has pleaded not guilty.

Speaking of which… From the Los Angeles Times: “Wondery CEO who built a podcasting powerhouse vows to fight federal corruption charges.”

Yes, Spotify Has Made Another Big Acquisition