The evolving audio landscape 🎧

Audio is no longer a market you can question, and spoken word content is taking center stage (that’s why we’re working on Alpe Audio)

Two of the biggest players are making moves: entering new content formats & new business strategy/models.

Spotify 🎶

Spotify have charged headlong into podcasts, and most recently it seems audio books as well. Spotify have truly embraced “Content is king” as a strategy. An interesting change for a product that has long been differentiated only by UX (music is commoditized). They’ve been on a binge purchasing original shows — Joe Rogan, Michelle Obama, Gimlet etc.

Why? Two main reasons:

1. Content IS king, and in the Spotify vs Apple Music battle, their main point of differentiation.
2. More content enables them to strengthen their business model shift towards an ad driven platform.

To do this, they need to become the “Google for podcasts”, as in build out the bidding platform and inventory. That’s why they’ve been building tech tools for self serve ads and backwards integrating into the content creation stage with their acquisition of Anchor — to ensure a proper inventory.

Audible 📚

Audible, the other giant is also entering new “spoken word” content: podcasts and educational courses via their partnership with “the great courses”. The main difference between Audible and Spotify in terms of their content, is that they come at it from a complete opposite vantage point. Historically, Audible has had differentiated content, based on book publishing deals and being part of the Amazon Prime family. Quite the opposite of Spotify’s commoditized content.

From Audible’s perspective, content was king, but now it’s turning into a jack. It’s no longer quite the differentiation that it used to be. Audible is in the disruption cross hairs. They’re at risk from a lower value chain. Mainly audio content with a cheaper price point and high quality — podcasts and courses come top of mind.

Which is why they’re migrating down the spoken word quality value chain — podcasts and cheaper courses. You can see this with their new “Audible Plus” offering: a $5 subscription (50%-70% discount to their regular subscription) which offers Audible originals and podcasts. They’re in the search for cheaper content they can bring to their platform to answer the risk from podcasts and Spotify (whom rumor has it will be launching audio books soon)

What’s the takeaway?

In a world of free, amazing content, the “Content is king” strategy is much harder to execute. Content is your ante to play in the game, it’s not the be all and end all of your strategy. Your content has to:

1. Be differentiated: either through superior UX (Spotify), license agreements (the old Audible) or something else.
2. Solve a real need: when so much good content can be found for free, you have to solve a real need for a real user group to ensure that those users come to your content.
3. Have great distribution: If industry giants like Audible are concerned about Spotify’s distribution, you can be sure that any new player has to have a good, novel distribution model in mind to get their content front and center for users.