A Great Debate: Will Spotify Buying Gimlet and Anchor Be Good for Podcasting? (UPDATED)

Eric and Ely face off with the pros and cons of the potential acquisition.

By: Eric Silver and Elena Fernández-Collins

Breaking news calls for breaking news conversations. Eric Silver and Elena Fernández-Collins (Ely) participate in a Great Debate on the Gimlet-Spotify acquisition deal.

Is it good for podcasting? We decide. Or try to decide.

Eric: Hey Ely, it seems that a big freaking deal in the podcasting world happened on Friday evening, which really brought down the happy hour I was at while I ran around showing my friends my phone.

Ely: Eric, I am so annoyed major players in podcasting decided to drop big news on a Friday evening. I was trying to enjoy my wine and movie night, but no — Spotify and Gimlet decided to go ahead and tell us that Spotify is in “advanced talks” to buy Gimlet for 230 million dollars.

Eric: That is…and let me check my notes here… a lot of money.

So we decided to talk about it. We’re doing this Lincoln-Douglass debate style, where one of us is pro-acquisition and the other is anti-acquisition. We played rock paper scissors before this, and I lost so I’m taking pro-acquisition.

Ely: We can both see the potential good and the potential not good about this — but let the games begin. Eric, would you like to lay your points down first?

Eric: ALRIGHT HERE WE GO. Hey, someone is recognizing podcasting! With their money! That’s a good thing, right?

Podcasting is still a really small medium comparatively, and if someone wants to buy a podcasting company for more than 230 Who Wants to Be a Millionaire contestants, that means we’re going to thrive.

And Spotify is a tech company, so at least it’s better than radio-bound iHeartMedia buying Stuff Media.

Ely: iHeartMedia, the lowest bar to clear.

Yeah, this isn’t going to help podcasting as a whole. For one thing, Spotify’s design is a freemium service — that means there’s exclusive content you have to pay for. Spotify and Gimlet have already partnered before, so we have precedent for this conclusion in Crimetown Season 2 and Mogul, both Spotify platform exclusives. Putting money into podcasting only to create a walled garden is bad for discoverability, bad for the way forward in podcasting, and bad for the growing divide between indie podcasts and big money podcasts.

Eric: But not bad for everyone who uses Spotify! Remember when they didn’t even have a podcast section? Now they want to invest — they’re hiring for a content manager on a podcast team, they have real charts. Hopefully, creators get the benefit of their tech, even if whatever they’re investing in is made for their in-house content team.

And Spotify isn’t the only podcast game in town. There’s still Apple. This could break up the monopoly of internet media. It’s why Youtube hasn’t had to improve — there’s no competition. Maybe Apple will fix their podcast app, make better data available, and throw some of their tech money around.

Ely: While I agree that the possibility for platform wars is a good thing, we need to think about the people working at Gimlet and Gimlet Creative when the exit happens. What happens to them and their jobs? Are they going to be given jobs at Spotify? After the massive layoffs at Vice Media and BuzzFeed this past week, I think we’re all a little raw towards that possibility.

And, to be honest, Apple has been kind of benignly laid back about podcast distribution platform competition. I wouldn’t recommend the Apple Podcasts app to anyone, but I doubt Spotify is going to topple the monopoly of leaving your iTunes link in the replies of random Tweets.

Eric: Why would people in a creative field lose jobs when massive companies get taken over? That’s WILD. Eric looks at the camera.

After smashing PCs in the who-is-the-coolest-at-computers game, it doesn’t surprise me that Apple is chilling. I’m saying this will light a fire under their butt to improve. They made Apple Music to compete with Spotify the first time, and doubling down on podcasts is sure to come next.

Hey, maybe Google will get their act together if someone is taking their lunch money.

Ely: Looks at Google Podcasts app, grimaces.

Eric: The space race is on! And I mean, the space race for your phone.

Ely: Sure, the phone space race is on, but can we talk about how shady the start has been? This news dropped in what is definitively the “bury this news” slot — a Friday evening. Why? It looks like Spotify testing the waters, and like Gimlet is trying to see if they can increase their valuation or get another company to bite. It’s weird, and it reeks. Granted, the space race wasn’t squeaky clean either, I guess.

Eric: Are the Russians Gimlet? Reply All, Comrade?

I got distracted by puns! How dare you. This seems like a leak, and it’s how companies roll. Blah blah blah free market blah blah blah. The acquisition seemed inevitable, right? We’re a long way from the Alex Blumberg in Season 1 of Start Up, who had special sauce and fumbled over his words to Chris Sacca.

Gimlet is a multimedia company, not just a podcast company. Just like Spotify is multimedia, not just audio. This doesn’t come out of nowhere. They wanted to be bought. This is just showing their cards.

Ely: I agree it was inevitable that Gimlet would want to be bought eventually. They’re a venture capitalist-backed startup focusing in content creation, and that’s a risky set-up in terms of cash flow.

I can still not like capitalism, Eric! Especially when Spotify is looking for a leg up. They have to invest in podcasts now, and the tools they might create to enable them are likely not going to be available publicly. How does that help anyone other than Spotify?

Eric: This is like when your favorite indie band gets signed by a major label! Someone else thinks they’re great, but you knew about them when it was just PJ and Alex in a studio in Brooklyn. Now everyone gets highly produced podcasts!

Ely: Everyone? Or just Gimlet, and the celebrity voices they’re going to be hiring to create Spotify exclusive content, and the people who can pay to access that content?

Eric: …my notes say everyone, so I’m going to say everyone. Did you know who I got the news about the Gimlet from?

Ely: Who, Eric?

Eric: My brother! Who works in finance! And goes on Reddit a bunch! Everyone is starting to care about podcasting because they’re getting real attention from tech,
and as someone who has to say “it’s like radio from your phone” a lot, I’m ok with that.

Ely: We have got to come up with a better slogan for podcasts.

Eric: It’s murder, but in your ears!

Ely: …going back to finances.

I think it’s great that podcasting is getting attention from tech! Ad sales have been wild lately. Spotify got in the ad-sale game in their original podcasts in mid-2018. I want the money in the the tech world to support more than just the big names and provide free-to-use tools to improve podcast creation or better apps for access and distribution. It’s a lot to ask for, but I’ll shout it through their windows at night if I must. I’ll bring a stereo.

Eric: That sounds great — in the mythical land of Bohemia that Rent is set in, but it’s 2019. Realistically, I don’t know if that’s ever going happen.

Ely: Agreed. Maybe one or two advances out of that list might occur in a smaller form, like app improvement from Spotify or tools for podcast creation from Apple Podcasts. But you doubt that Bohemian fantasy like I doubt that the Spotify-Gimlet acquisition is going to be good for podcast listeners and creators. It’s just as unrealistic to think that this acquisition is going to create a lot jobs for indie people, or help funnel money into podcasting as a whole from all of the tech world.

Eric: And who knows, Ben Mullin and Anne Steele of the WSJ said, “Talks are still ongoing and it is still possible that a deal won’t happen, [sources] said.” So it may be moot anyway and we go on with our lives.

Ely: I like my life of screaming endlessly into the void about capitalism and supporting indie artists. Right? Doesn’t it seem like I like it?

Eric: It does. You’re having a great time.

A giant bell in a clocktower rings twelve times.

Eric: AAAAAAND time. Whew.

Actually I think this is a terrible thing: Spotify has pushed their own shows to the top of their charts so their charts, like Apple’s, mean nothing. Gimlet’s roster of shows, even including the Gimlet Creative team and contracts, definitely doesn’t equal $230 million. Lots of people are going to lose their jobs. And in 2015, Gimlet was valued at $70 million, so this jump seems to be very large. And Spotify just figured out what podcasts were like less than a year ago, so they could still botch it.

YOINKS. Man.

Ely: YOINKS is right. I fluctuate heavily on whether I think this is really terrible or just kind of terrible, and the only thing kind of terrible has going for it is the potential for other apps to improve when they’re up against the competition.

UPDATE — February 6

Ely: Hey, Eric, do you know what’s really annoying for the media?

Eric: Bad coffee, unstable job prospects, and the lack of an edit button on twitter?

Ely: Well… yes, you’re not wrong.

But also: that moment when a major company announces another acquisition and then, later, releases their earnings, instead of announcing these at the same time.

Eric: That would be it. So, breaking news, Spotify DID buy Gimlet for over $200mil and threw in Anchor as well. My head is spinning, this is not what I was ready to see this morning at 7am. I don’t even have the time to put on a Staunchly Pro persona. What is going on?? Spotify is saying that they’re going to drop $500mil on companies, and this is probably going to sop up two-thirds of that.

Ely: I’ve had a half cup of coffee and no breakfast, so this looks like shenanigans to me right now. Anchor developed podcasting creation and hosting tools that were simple and free; the idea was that all you need for podcasting is a microphone. Spotify is definitely planning on mining that for their in-house team, though I hope that they aren’t just picking up their smartphone microphones.

Eric: It would be weird if they picked up each one individually, but the two company swoop compliments each other: Gimlet demonstrates the PEAK of “good podcasting” and Anchor demonstrates the epitome is “accessible podcasting.”

But I think that’s really dangerous for podcasting on the whole. You need millions of dollars and all the resources in the world to be successful like Gimlet, and Anchor gives you the lowest bar possible to clear to be a podcaster, the old refrain “OH WOW podcasting has such a low barrier of entry.” It threatens the middle class of independent artists who are trying to make it in audio. Are we steering towards the only viable options are get a job at NPR or Gimlet or record with your iPhone?

Ely: Hope not, neither of those places have been batting a hundred on equitable diversity.

Eric: Got em.

Ely: This could be good, right? This would give Spotify what it needs to bring really solid competition to the market with Apple and, at a base level, I want market competition to make others playing in the space to improve their tools and make new ones. Monopoly is for mistakes made when your six-year-old nephew gives you puppy eyes.

Eric: I hope so! This is what I was saying a few days ago — hopefully, it gets Apple to respond. But will that response be “acquire a studio of our own” or “make better user experience and tools for everyone?” It’s kind of a bummer to think about Anchor now, who was attempting to making podcasting easy for everybody. Those tools are now going to live for a platform, which gives it a kind of tech-monopoly sheen, which is worrisome

It was one thing when it was “sign up for anchor and use our tools,” but “sign up for Spotify and use our tools” feels like a consolidation of power. And squeezes a lot of people in the process.

Ely: I agree, especially when the price tag of free is about to become, minimally, freemium.

I’m also interested in what this could mean for curation tools. Spotify is a leader in the world of music curation, but that’s because there’s a lot of metadata on music, and metadata on podcasts is kind of like when you walk into your new fixer-upper house and the bottom has fallen out into the basement.

It needs work, and you´re starting essentially from scratch.

Eric: Will curation even matter or exist when there is an in-house product? Remember, the Amy Schumer podcast is at the top of the Spotify chart, and ask 10 people you know if they knew Amy Schumer has a podcast. I assume that Gimlet shows and Anchor-powered shows will get special treatment. But, even if Spotify isn’t giving special treatment to shows they have a stake in, the assumption that they will tarnish their discovery/curation ability.

It’s like this. “Weird how the Backstreet Boys are in 60% of my Playlist of the Day. Oh, that’s right, Spotify manages the Backstreet Boys!”

Ely: We will never speak of the moment that my brain almost considered searching Google.

Some updates on our previous commentary: Spotify is saying that people at Gimlet and at Anchor are going to be retaining their jobs and positions, and Gimlet’s podcasts won’t become Spotify-exclusive. You know, immediately. Stepping into a new field with the announcement of a paywall is probably not the best move.

Eric: Well Ely, let’s stop talking in case a big media company buys a smaller media company. I think we’re the ones who are invoking this.

Ely: I can’t hear you over the sound of my coffee and my need for the podcasting world to take a collective break.

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