Spotify is not the Netflix of Audio, it's the YouTube of audio

When rumours of Spotify acquiring Gimlet started, Twitter was abuzz with the phrase: Spotify wants to be the Netflix of Audio. Which I inherently did not like, but with Spotify also acquiring Anchor, I am certain that Spotify wants to be the Youtube of Audio, not Netflix, infact there will never be a Netflix of Audio. Let us dig in on the Why. 

Podcast compete with the rest of entertainment in a 24 hour Day.

Human are storytelling creatures, but they also love to listen to a story, and nothing beats video in Storytelling. When people watch videos, their senses are glued in, to the extent they can ignore things around them, and even things in the video. Magicians use this inherent behaviour to do magic. Competing with anything visual is hard. Which also holds true for Facebook, Instagram and other non-video competition. Both are visual in nature. 

The Podcast opportunity.

If you ask your friends when they listen to podcasts, they will usually mention a time when they can't use their phone. From driving to washing dishes, the time those tasks take is the opportunity of Podcasts. Even in such scenarios, podcasts compete with Music, which for the majority of the folks is a losing proposition. 

Growth for Spotify, more free Audio content

Spotify needs to get into as many ears as possible, for that they need to have a lot more creators on the platform to diversify the type of content they have. Which is why they acquired Anchor, to get access to all the podcast creators and use that supply to capture more users. 

Also, this is not a play to get the current podcast listeners to move, this is targeted more towards future podcasts listeners, some of who might pick up as they listen to Music.

Increasing Ad Revenue Per user.

Unlike music, podcasts are a better source for building user personas. Using this, Spotify will be in a position to have more targeted Audio ads as it controls the entire stack of the creation and consumption process. Which will also mean more Ad Revenue for good content creators. 

Closing notes

The points above showcase that Spotify is trying to be the YouTube of Audio, not Netflix by having original shows behind a paywall.

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