Live audio experiences shall be adopted by each main platform similar to Stories have been, Spotify CEO Daniel Ek informed traders on Wednesday’s earnings name. The streaming service just lately acquired a live audio app, Locker Room, whose expertise it expects to make use of to energy a spread of recent live audio conversations centered round sports activities, tradition and, after all, music.
Investors had been curious how precisely Locker Room would slot in with Spotify’s present choices, given the streamer at the moment is targeted on delivering recorded content — music and podcasts — and never some form of live social networking expertise.
Ek, mirroring what many in the trade have already been considering, stated he sees live audio as a brand new set of capabilities that shall be broadly adopted by all. He principally dubbed it the next “Stories” — a function popularized by Snapchat, however that finally made its approach to each platform.
“It’s really no different than how you think about Stories,” Ek stated, explaining his ideas on live audio. “Stories today exist on a format on a number of platforms, including Spotify, including, of course, Instagram, Snap and many others. So, I do look at [live audio] as a compelling feature set, and I think creators will engage in the places where they have the best sort of creator-to-fan affinity for the type of interactions that they’re looking for. And I think this is very similar to say how Stories played out historically.”
In different phrases, every platform could entice a sure sort of live audio creator, and Spotify sees its personal potential in the realm of music and tradition — the latter due to its current and expansive investments in podcasts.
The curiosity in live audio emerged in the center of a pandemic that trapped folks at residence and shut down conventional networking and huge occasions, like conferences. But that doesn’t imply there’s no future for the format when the world opens again up.
Of course, Clubhouse will get credit score for the curiosity in the live audio area as its unique invite-only standing attracted a crowd of decided networkers (and clout-chasers) trying to take part in the next huge factor. But as the app grew extra standard, snagging big-name celeb friends — like Tesla founder Elon Musk, Facebook CEO Mark Zuckerberg, actor-turned-investor Ashton Kutcher, Drake, Oprah, and extra — different tech corporations started to take discover. Soon, everybody was constructing a Clubhouse clone.
Today, Facebook, Instagram, Reddit, Twitter, Discord, Telegram and even LinkedIn have plans for live audio in varied levels of growth or availability.
Instead of ranging from scratch, nonetheless, Spotify made an acquisition. Thanks to Locker Room, initially a spot to debate sports activities, Spotify stated it could quickly open up live audio to extra skilled athletes, writers, musicians, songwriters, podcasters and “other global voices” who need to host real-time conversations. The Locker Room service shall be rebranded as “Spotify Greenroom,” Ek famous, through an organization podcast.
In its first earnings name since the deal was introduced, traders requested whether or not Spotify believed linear consumption of spoken phrase audio was extra attention-grabbing than music streaming.
Ek defined how spoken phrase content could solely be the starting of what’s to return as the format evolves.
“As more people start engaging with a feature in a medium, you start seeing more and more professional creators jump on board. So I think it’s probably going to start out with spoken word content,” he stated. “But specifically as it relates to Spotify, I think that there will be a lot of musicians that want to engage in everything from speaking to their fans to having listening parties and all other things because it’s so clear to them that on the Spotify platform, that engagement drives meaningful conversion to monetization opportunities just on the basis of our revenue model.”
Spotify stated that the greatest request it will get from its over 8 million creators are to have extra methods for them to attach with followers. Live audio, by its nature, would give them a really direct approach to just do that, given Spotify’s attain of greater than 350 million customers.
In different phrases, live audio doesn’t current some both/or state of affairs with regard to music streaming, as the investor’s query urged. It’s extra of a loop the place one factor feeds the different. And “live,” apparently, might additionally imply music, not simply chat.
For instance, Ek hinted, when an artist has an album to advertise, “you as the fan, may be able to experience that earlier than other consumers can.” Oh actually?
Artists might additionally use live audio to speak about their considering round writing a track, much like what the Genius integration “Behind the Lyrics” at the moment offers.
“I think it really comes down to the quality of the content,” stated Ek. “And I think when I look at our 8 million creators, we have some of the world’s best storytellers on the platform, and that’s ultimately what people will tune into, and that’s what matters.”
But one space that might be troublesome is moderation of live content. Live audio presents an entire new vary of challenges for any firm, as conversations can go off the rails shortly. And Spotify’s place on drawing the line between free speech and policing misinformation or different inappropriate content is nonetheless considerably murky. Its prime podcaster, Joe Rogan, recently advised listeners to not get the COVID vaccine, in the event that they had been younger and wholesome, for instance. Spotify declined to weigh in on this explicit controversy. But it has eliminated some 40-plus episodes from the identical podcast in the previous — some for seemingly lesser violations, like an episode about Bulletproof Coffee and its well being claims, for example.
Before Spotify wades into live audio, it could need to first solidify its personal values round creator content. It will want a cautious, worst-case state of affairs plan for what occurs when a live session goes out of bounds, too.
Despite Ek’s optimism round live audio, Spotify’s stock tumbled after earnings, as there have been indicators of slowing development on the horizon, due to elevated strain from rivals, like Apple and Amazon. The firm added 3 million paid subscribers in the quarter, however missed on expectations of month-to-month lively customers and lowered its full-year steering. Revenues had been up €2.1 billion ($2.6 billion) in the quarter, a 16% enhance from the identical interval final yr however down 1% from This autumn 2020, elevating issues. But live audio might give followers a purpose to tune again in additional typically in the future, if the Spotify could make the integration work.