Credit: Nick Sirotich
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The Daily is perhaps the most successful news product at the country’s most successful newspaper. Each weekday morning, a new episode of the New York Times podcast appears on millions of phones. Host Michael Barbaro, a former Times politics reporter, might talk one day to the White House correspondent Maggie Haberman about the latest Trump palace intrigue, and the next to a reporter in the Moscow bureau about unrest in Belarus. The show is a wildly successful experiment that attracts a much larger audience than the front page of the print newspaper each day and brings in major ad revenue from the likes of BMW, Chanel, and Fidelity Insurance. At a time when the financial viability of the news industry is very much in doubt, The Daily is an encouraging counterexample. 

The Times is at the forefront of a broader podcasting boom. Ad revenue for podcasts increased by nearly 50 percent last year, according to an estimate from the Interactive Advertising Bureau, and is projected to top $800 million this year. Regional newspapers like The Atlanta Journal-Constitution, The Texas Tribune, and the Des Moines Register have gotten into podcasting, as have many online magazines and public radio stations. Slate now makes about half of its revenue from its podcasts. Vox Media expanded from a handful of shows in 2017 to more than 200 shows in 2020. Revenue from podcasting is expected to double this year. “We went from it being a hobby, to a strategy, to a big pillar of the company,” says Marty Moe, president of Vox Media Studios.

Podcasting is also a sector where it’s relatively easy for new and independent voices to break in. The former radio reporter Amy Westervelt founded her own network, Critical Frequency, in 2017. Just two years later, it won AdWeek’s annual award for best podcast network of the year. Podcasting also provides space for in-depth reporting, something that has become increasingly difficult to fund in other media. Long investigative reports on technical subjects can be turned into explanatory miniseries, as BuzzFeed did in September with an exposé on big banks’ role in financing terror and drug operations. Challenging topics, like school segregation, can be excavated through compelling storytelling, as with Nice White Parents, a New York Times podcast tracing the history of one Brooklyn school. “The space for high-quality content, and quality journalism, has been contracting for economic reasons for many years now,” says Jacob Weisberg, CEO of Pushkin Industries, a podcast production company he started after years as the editor in chief of the Slate Group. “I see podcasts very much as a place to enlarge that space.” 

Ad revenue for podcasts increased by more than 40 percent last year and is projected to top $800 million this year. Regional newspapers have gotten into podcasting, as have many online magazines and public radio stations.

But podcasting’s bright future is under increasing threat. The medium stands in danger of being rolled up by monopolistic tech platforms that could come to own and control the marketplace itself. With that power, they could suck away much of the value created by talented podcasters, just as Amazon stole away the income of even many best-selling authors after it came to own and control most of the digital infrastructure on which e-books are sold. 

The most immediate incursion from Big Tech is Spotify, the music-streaming giant, which has already made aggressive moves to install itself as the new podcast gatekeeper. It has acquired several production companies and cut exclusive deals with top podcasters, like Joe Rogan, requiring that they remove their shows from all other platforms. But behind Spotify loom even more powerful actors. Its forays appear to have piqued the attention of Amazon and Google, and possibly even Apple, which has long functioned as a passive, benevolent monopolist over podcast distribution.

There’s nothing inherently wrong with market platforms. The trouble arises when marketplaces come under the control of monopolists who are accustomed to running platforms to their own advantage, at the expense of everyone else who relies on them. The recent House antitrust subcommittee report on tech monopolies illustrates what this can look like. The investigation found evidence that Amazon exploits the data it gathers on third-party sellers who use its online market to undercut those very merchants; that Google put a thumb on the scale to feature its own products, like Chrome and Google Shopping, over competitors even when its engineers knew those offerings wouldn’t naturally rise to the top of a Google search; and that Apple uses its control over the iPhone app market to unfairly tax, bully, and play favorites with third-party app developers.

These monopolistic tendencies have already wreaked havoc on other creative industries, forcing onerous terms on musicians, app developers, and book authors, as well as stealing revenue from newspapers and magazines. The same fate could befall podcasting, to the detriment of journalists and, by extension, democracy. But it isn’t too late. As the House report makes clear, the government waited until the damage was already done to start investigating the anticompetitive practices of tech monopolies. Podcasting offers policy makers a chance to atone for their sins—by using public policy to keep podcasting from being devoured before it’s too late.

Steve Jobs introduced the wider world to podcasts at Apple’s Worldwide Developers Conference in June 2005. (The term is a mashup of iPod and broadcast.) Slate was one of the earliest media companies to experiment with it. They started by simply reading articles into a microphone. They tried something they called “voicemail blogs.” “It was very much about figuring out a new medium,” Weisberg, the former Slate executive, told me. “There wasn’t a clear revenue model, but the people who were making them at Slate loved making them, and the audience loved them, so they kept expanding.”

Thankfully, it was relatively easy for Slate, and other podcasters, to get their product out. Podcasts relied on “Really Simple Syndication,” or RSS feeds, a standardized, open web format for pushing out updates to any website. The format made it easy for listeners to subscribe to podcasts and automatically get new episodes, using any number of apps set up to receive RSS feeds. For the most part, however, people didn’t listen on any number of apps. They listened on iTunes, and, later, Apple’s podcasting app, which was preinstalled on iPhones. Apple let podcast hosts put their shows on the app for free. By default, Apple became something like a benevolent old-fashioned bookstore owner, not charging anyone for product placement, demanding onerous terms of services, or competing against independent authors with its own products. Weisberg describes the company’s hands-off approach as “a real gift” to the podcasting world. 

It took time, but thanks to its widespread accessibility—and a few blockbuster shows, most notably the 2014 sensation Serial—podcasting took off. In 2015, less than half of Americans were familiar with podcasts, and only 17 percent listened monthly, according to a survey from Edison Research. By early 2020, three-quarters of Americans were familiar with podcasts, 37 percent listened monthly, and 25 percent had listened to one in the last week. Most impressive is the amount of time listeners spent. Out of those who listened in the last week, the average time spent listening to podcasts is more than six and a half hours per week.

All that ear time has opened up enormous opportunities for ads. Businesses have capitalized. Podcast listeners hear their favorite hosts shill for products for a few minutes each episode: a subscription toothbrush service, stamps you can print out at home, software for getting an email newsletter started. Ads delivered by hosts are the primary way many successful podcasts bring in money. Done well, they don’t feel all that intrusive—it’s just more stuff from the person you chose to listen to. “Hosts are able to leverage the personal connection that they have with the audience,” says Dan Check, CEO of Slate, which makes the listener more receptive and the ad more effective. 

So effective, in fact, that companies are willing to pay more per 1,000 listeners (the “cost per mille,” or CPM in industry argot) for an ad on a top podcast than the going rate for a Super Bowl ad in recent years. While the advertising industry has been rocked by tighter budgets during COVID-19, brands are projected to increase their spending on podcast ads in this year, according to the Interactive Advertising Bureau’s data. 

For the most part, that money has been going to podcasters themselves. Advertisers make deals with podcasters directly or go through one of several podcast ad firms that match brands to shows. Lots of podcasts bring in additional revenue by putting out extended episodes on Patreon, or letting subscribers pay for an ad-free feed. This has all grown without giant tech companies consolidating the market and taking huge cuts of the revenue. 

But that’s starting to change.

To understand what could happen to the podcasting industry, it helps to understand what happened to early Hollywood. 

In the 1940s, a handful of studios controlled nearly every part of the moviemaking process, from the theaters in which the films were shown to the actors, who had to sign exclusive deals with one studio. Under studio contracts, actors’ lives were minutely controlled. Actresses were prevented from getting married or having children, for example, if it conflicted with their image as a sex symbol. 

The Supreme Court put this setup to an end. In a landmark 1948 decision, United States v. Paramount Pictures, the Court ruled that Hollywood movie studios could no longer also own movie theaters, because that put them in the position of favoring their own films over those of independent moviemakers. The decision ultimately meant that actors, screenwriters, directors, and other creative talent could sell their services across a much broader open market and were no longer effectively indentured to one of the era’s studios. It also meant the viewing public had a much broader choice of films showing at their local theater. 

But now, Spotify looks like it’s trying to become today’s version of pre-1948 Paramount.

The first clue came in 2018, when Spotify struck a deal with the actress and comedian Amy Schumer to create an original podcast for the platform, and then netted an exclusive deal with the rapper and podcaster Joe Budden. The exclusive deal was a major change in the terms of the game. Traditionally, all podcasts had been free to listen to, with some ads, on all podcast platforms. But for the duration of his contract, Budden, who had established his popular hip-hop culture podcast across several platforms, would be forbidden from airing his show on any other podcasting platform.

Podcasting provides space for in-depth reporting, something that has become increasingly difficult to fund in other media.

A spate of exclusive deals followed. Spotify made agreements with Vice News, Kim Kardashian West, and Barack and Michelle Obama’s production company, Higher Ground. Perhaps most notably, the company netted Joe Rogan, one of the most popular podcasters in the country. According to The Wall Street Journal, the company is paying him more than $100 million to bring his show to Spotify, and to remove it from all other platforms by the end of 2020. 

The second sign of vertical integration came in February 2019, when Spotify acquired two podcast companies: Gimlet Media, a premier company behind the popular shows Reply All and Homecoming, and Anchor, a software company with tools for people to make their own podcasts. “Gimlet and Anchor will position us to become the leading platform for podcast creators around the world and the leading producer of podcasts,” Spotify CEO Daniel Ek wrote after the deals closed. “These acquisitions will meaningfully accelerate our path to becoming the world’s leading audio platform.” The company then went on to acquire Parcast, a podcast production company focused on making true crime podcasts, and the Ringer, a popular sports website and podcast network, home to Bill Simmons’s titular podcast. 

This means that Spotify is no longer just a platform for listeners to find podcasts and for podcasters to find an audience. It’s also a podcast production company that competes for listeners against the other podcasts on its own platform—like the old movie studios that owned the theaters that rival movie producers depended on. This seriously disadvantages independent podcast production companies, like Amy Westervelt’s Critical Frequency, which must compete with Spotify-backed productions that can command far greater resources and potentially get insider perks, like additional promotion on the platform or more detailed audience data than is available to other content creators. Similarly, Anchor’s tools could be integrated directly into Spotify’s app—a massive advantage other podcast tool companies can’t match. (The platform has already tested an in-app “create podcast” button that took users to Anchor’s tools.) 

As a platform, Spotify also has at least two major advantages when cutting deals with advertisers, which could threaten the setup that has so far worked pretty well for podcast hosts. First, it could, in the future, offer brands a larger audience for their ads than any other podcasting firm alone could deliver, with the option to, say, advertise across their thousands of sports shows. This might draw advertisers away from other podcasting firms. Spotify is already netting far bigger customers than individual podcasters typically could. Omnicom, a large digital marketing agency, has signed up to buy $20 million worth of podcasting ads on Spotify. 

Spotify’s forays appear to have piqued the attention of Amazon and Google, and possibly even Apple, which has long functioned as a passive, benevolent monopolist over podcast distribution.

Second, and perhaps more importantly, it has changed up podcast delivery technology in a way that will give its ads an edge. Traditionally, the RSS format made podcasting more resistant to surveillance-based micro-targeted ads—you can’t do much spying on someone when they’re listening to a downloaded file, and that was the information podcasters had to work with. But as a mobile app Spotify has a lot more granular information to offer advertisers—like precise location, the time when users are listening, and even whether someone’s phone is in their hand or in their pocket. Streaming also allows the company to dynamically insert ads into podcasts as they are playing, something that most podcast firms, which have to pre-bake ads into podcasts to comport with RSS-based platforms, cannot do. Finally, as a platform, Spotify can also bring to bear user data, like the demographic information people input to set up an account, or the preferences and habits revealed by their music listening, that podcast firms generally don’t have access to. 

These enhanced advertising capabilities are a major part of Spotify’s sales pitch. In January 2020, the company announced its new “Streaming Ad Insertion” technology, which will take information about listeners, like their age, gender, location, and type of device, and use it to target ads at them, inserted in real time as they stream their podcast. In June, the Verge reported that Spotify has made this technology available for 100 Spotify shows. It’s still early days; the company has hinted that it will expand the technology’s use further.

Spotify’s more sophisticated ad targeting abilities, and its power to program ad placement within podcasts, mirror the trend that eroded the business model for print journalism. Print publications used to be important gateways to specific audiences—Runner’s World, for example, was a place Nike knew it could reach potential buyers. That remained true in the early days of the internet, when advertisers bought banner space directly from publishers. But the rise of micro-targeting over the past decade allowed brands to aim their ads to a certain audience no matter what website or app they’re looking at. Runner’s World, in other words, is no longer the most important gateway to Nike’s audience. 

Instead, the gateway became the two companies that provide the most detailed data on individuals. The first is Google, which tracks users across its sprawling empire of map, email, search, video (YouTube), and other properties. The second is Facebook, whose monopoly over social networking gives it an unrivaled trove of granular and intimate data about its users. The two companies’ data advantage, built up largely through acquisitions of competitors, has allowed them to dominate the business of digital advertising and to redirect to themselves the ad money that once funded media outlets. Google now controls 90 percent of the market for publisher-side ad servers, and takes an estimated 40 percent cut of ad sales that use its services, according to an investigation by the UK’s Competition and Market Authority. The two companies combined took in 88 percent of the growth in digital advertising dollars between 2018 and 2019. (See Phillip Longman’s “Starving the News“) 

Targeted advertising could do the same to podcasts. Some in the podcasting business are already worried that it will. “Let’s look at the web, the best and most recent example of a mass-market, highly diverse, mature, fully analytics-capable medium,” Marco Arment, creator of the popular podcasting app Overcast, remarked in a Columbia Journalism Review article after hearing about new podcasting ad tracking software. “How did that turn out for all sides involved? Is web publishing a healthy business while minimizing consumer/privacy abuse?” It was, of course, a rhetorical question.

Spotify may have gotten an early start on taking over the podcast market, but it’s facing competition from some fearsome rivals.

In September, The Wall Street Journal reported that Amazon Music was branching into podcast distribution, letting podcasters add their feeds to the platform, and has plans to put out exclusive podcasts of its own, including one with DJ Khaled. It is also fashioning Audible, its audiobook platform, into a podcast network, with dozens of original, exclusive shows that exist behind a $7.95 monthly paywall. 

Amazon has advantages Spotify doesn’t. Its Echo speaker leads the smart-speaker market. Anytime someone asks Alexa to play a podcast, it automatically plays from Amazon Music (if it’s available there). The company could parlay its dominance of smart speakers into gatekeeping power in podcasting. The opportunities for synergy—or, perhaps, for self-dealing—are immense. Someone listening to a podcast via Amazon Music on their Echo device could hear an ad for a product made by Amazon and sold on Amazon. With a few words to Alexa, they could buy it. In that interaction, Amazon would have created the podcast, the platform the podcast is played on, the software that summons the podcast, the hardware the podcast is played on, the product advertised, and the market on which the product is sold. 

Google has also begun expanding into the podcast market. When you search for a podcast on Google, several small panels embedded high up in the search results direct you to episodes on Google Podcasts. That product has less than 2  percent of the market, according to figures from the podcast hosting platform Libsyn. (Solid market share figures are hard to come by, but Libsyn publishes the share of downloads each platform gets, across all listeners to the thousands of podcasts it hosts.) And yet Google’s search engine often features it above more popular apps, like Spotify and Stitcher. Google has several other levers it could pull to expand its app’s reach. Google’s Android operating system runs on roughly 45 percent of phones in the United States. Google runs the app store those phones use, Google Play, and has its own line of smart speakers, Google Home. The company is adept at using these platforms to create what the House antitrust report called “interlocking monopolies,” using dominance in sector A to give its own products an advantage in sector B. Ultimately, Google’s biggest advantage lies in its data. As podcast advertising shifts to a real-time micro-targeting model, personal data will be the coin of the realm, and no company in the world knows as much about as many individuals as Google. 

Monopolistic tech companies have already strip-mined revenues from other creative professionals, including musicians, app developers, book authors, and print journalists.

Don’t forget Apple, which commands more than 60 percent of U.S. podcast listeners, according to Libsyn’s figures. Apple’s success has less to do with beating its competition in design and user experience and more to do with the fact that it comes pre-installed on all iPhones, a level of convenience that Spotify and other podcast apps can’t compete with. The open question is whether the company will do much with its power. Apple has built its brand in part around privacy, so it may not get into the invasive business of advertising. But between hiring Jake Shapiro, the founder of a premier podcast distribution nonprofit, to lead creative partnerships at Apple Podcasts, and its recent acquisition of Scout FM, a company that algorithmically curates custom podcast playlists, there are signals that Apple may finally be stepping up its efforts. Like Google, it could turn any number of dials to promote its own podcast platform through superior integration with Siri, or better compatibility with Apple’s own iPhones or iOS operating system. Its competitors rely on Apple’s app store for distribution, and Apple could make any number of decisions on that platform that hurt its competition. Through its own software—from Safari to the Health app—Apple can gather substantial personal information for advertisers. If Apple vertically integrates and gets into podcast production and advertising, as Spotify has, it would be extremely well positioned to monopolize the podcasting industry. 

So what happens next?

It’s not hard to imagine a scenario in which Spotify becomes a dominant podcast creator, advertiser, and distributor. Once people are used to finding their favorite podcasts in one place, they’re unlikely to wander. If Spotify can provide the largest audience for advertisers, and a system for granular micro-targeting based on the data it collects on those listeners, it could win a critical and self-reinforcing chunk of the podcasting pie. 

Or perhaps Amazon, Google, or Apple will surge from behind, buying or crushing Spotify en route to dominating the industry. 

Finally, we could also end up in a world where Spotify, Amazon, Google, and Apple all make aggressive efforts to own the podcasting space, and we end up with a few ginormous podcast creator-advertiser-distributor companies. That might be better than a single monopolist taking everything over—but probably not much. Right now the industry is mostly vertically separated. Some companies make podcasts, others do advertising, and still others run platforms—and there’s competition within each level. A four-way Big Tech podcasting oligopoly, however, would be more like the Hollywood studio system of the 1940s. In that world, “if you want to produce a podcast, you’re going to get to pick between one of four bosses, as opposed to being able to be your own boss and sell into an open market,” says Matt Stoller, an antitrust expert at the American Economic Liberties Project. (Stoller was one of the first to write about market consolidation in podcasting, and how it could harm the industry.) This could drive down revenue for content creators—and the publications that depend on them. Having four companies control the pipeline of audio content could also make it harder for new and independent creators to find an audience.

The point of antitrust law is not only to reel in monopolies once they’ve crushed their competitors and taken over industries. It’s also to prevent harmful consolidation from happening in the first place.

It’s possible that these fears will prove to be overblown. Many observers are optimistic that there will always be a route for independent podcasts, or podcasts made by small companies, to succeed. Jacob Weisberg of Pushkin and Dan Check of Slate, for example, think the fact that listeners don’t seem to mind ads read by hosts means that advertisers will continue to pay high prices to content creators, even if it means their products aren’t micro-targeted. Others hope that indie podcasters will be able bring in enough money through subscriptions, or extra paid content on Patreon, to sustain themselves if platform companies take over ad sales. At least some podcasters seemed to have learned the right lesson from the decline of digital publishing: Make your money from several different sources. 

But as the history of digital advertising shows, the worst can happen. That means policy makers must be proactive to help keep the podcast market healthy. 

Fortunately, there are clear ways for the government to step in. The FTC, and other regulators, could take the stance that platforms, once they provide an essential infrastructure, must stick to being platforms—they can’t branch out into advertising or podcast creation, where they might have an unfair advantage. Regulators could also create rules to ensure that podcast creators don’t have to take bad deals in order to gain access to distribution platforms. In the past, the federal government created such rules for media. In the 1970s, for example, the Federal Communications Commission issued rules preventing the big three television networks, ABC, CBS, and NBC, from sucking profits away from independent TV producers.  

Those rules were eventually relaxed, as antitrust enforcement generally fell apart. The past couple of years, however, have seen the beginnings of an antitrust renaissance. As Google, Amazon, Facebook, and Apple have crept into every corner of our lives, advocates and policy makers have rediscovered competition policy as an important bulwark against corporate monopolies. The Department of Justice, the FTC, dozens of state attorneys general, and European Union regulators each have had investigations into one or more of these companies in 2020. On October 6, the House subcommittee released a report finding that Apple, Amazon, Google, and Facebook used their platforms to gain an upper hand in new markets. The Democrats on the committee, who authored the report, gave Congress concrete recommendations, including a ban on letting certain dominant platforms compete in adjacent lines of business. 

But the point of antitrust law is not only to reel in monopolies once they’ve crushed their competitors and taken over industries. It’s also to prevent harmful consolidation from happening in the first place. Policy makers should apply the thinking from their report to the podcasting industry before the situation becomes worse. They should enforce structural separation within the industry, so the platforms that provide essential infrastructure can’t branch out into content creation or advertising within podcasts. 

They must do this now. Podcasts are one of the few promising ways for media outlets to reach new audiences, develop new journalistic formats, and bring in new revenue for valuable reporting that is otherwise underfunded and underappreciated. But the drumbeat of platform monopolization is getting louder. Regulators need to listen up.

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Grace Gedye is reporter for CalMatters. She was an editor at Washington Monthly from 2018 to 2021.