welcome back to the american product institute.
last week, we published the meetings manifesto. read it and follow it.
this week, we examine the problem that spotify created for hundreds of millions of podcast listeners across the globe this past tuesday.
to create the problem, the swedish audio streaming behemoth spent $100 million on a content exclusivity agreement with american meathead savant joe rogan. the deal ripped through internet, eliciting a response from anyone with eyes on software, podcasts, or popular culture. the reactions of the technologist, the economist, and the antimonopolist are all worth consuming. the american product institute will instead endeavor to highlight the specific problem that spotify’s podcast strategy is attempting to create… and then solve.
the two tile problem.
the two tile problem
do you carry two tiles on your phone that do the same job?
most people don’t. most people carry just one tile to do a job for them.
one tile. one solution. this is the ideal.
checking the weather
most people use the default weather app to check the weather. some started using dark sky instead - a tile that made them realize that not all software applications need to be “free.” that a one-time, small-dollar payment for a superior user experience is well worth it. dark sky’s was an experience so superior that apple acquired it for themselves. but whether it’s dark sky or the default, people only use one tile to check the weather. if one tile does the job, why keep two?
browsing the internet
most people use just one browser: chrome. apple’s dubious restrictions on the iOS default browser setting leave safari always lurking - ready to spring into action whenever you thumb a stray link. but that’s not a choice the user has made. ideally we could have just one tile to browse the internet.
listening to music
most people use the spotify tile, which has 130 million premium subscribers and another 150 million consuming advertising on their free plan. that’s double the subscription numbers of second place apple music. some people use youtube for its top-of-the-line recommendation engine. some continue to use pandora, the innovator that started the algorithm trend in music streaming. but even if people have multiple tiles floating around, they eventually coalece around one tile as their usual tile.
checking your email
most people use gmail as their email provider. some people are stuck with outlook because of corporate policy. the american product insititute uses protonmail. but even if you’re juggling multiple inboxes with multiple email providers, electronic mail remains an open format so each inbox can be aggregated into one tile. apple mail, gmail, outlook, or some fourth party. one tile to do the job.
reading the news
before there were tiles, the local paper did the job. now there are tiles. and targeted digital advertising. the news has moved online.
when the RSS format (which either stands for rich site summary or really simple syndication) was created at the turn of the millennium, it opened the door to an infinitely personal, single solution for consuming not just the news but all content published on the web. the local, the coastal and the global paper bundled together into one feed, with the end user acting as both the editor and the reader.
when the new york times adopted the format in 2003, RSS was launched into the technological mainstream. ten years later it was yanked back out with the sunset of the most popular RSS reader of its day: google reader. the product obituary cited declining usage as the cause of death. online speculation from a former google product manager suggested that google killed it to focus on their absolute failure of a social media platform. if RSS was better suited to monetization through digital advertising, perhaps the product team at google would have been incentivized to nurse google reader back to life.
within this existing incentive structure of the internet, various product teams have attempted to create their own single solution to the news. google has google news. apple has apple news+. the new york times has a growing monopoly on old media digital paywalls. the dream of the aggregated, reader-curated, digital newspaper is being kept alive by feedly, with its valiant attempt at a freemium-model RSS reader. it’s an evolving story but the single solution - the digital paper on the doorstep - remains the ideal solution.
the RSS format may have lost the battle over the single source of news. the gatekeepers in media and technology snuffed out the possibility of an open format threatening their monetized stranglehold on journalism - though substack, built on the open format of electronic mail, is offering journalism and the entire publishing industry the chance at a counterpunch. RSS, though, has been winning on a different front this entire time. podcasts.
listening to podcasts
most people use the default tile to listen to podcasts. apple’s default has been the dominant player - unsurprising given that apple technology gave the medium its name. google podcasts launched in 2018 to offer android users a google default. indie darling overcast has a small but loyal userbase, thanks the genuine product innovation of features like smart speed and voice boost. but once again, the ideal remains one solution. one tile.
this past tuesday, the podcasting landscape changed forever when spotify poached the joe rogan experience, the #2 podcast in the world. rogan is the johnny carson of a new generation. it was a monumental moment in the medium.
the one tile rule will hold. it is the ideal. and this lucritive spotify exclusivity contract will force the hundreds of millions of joe rogan devotees to make a choice: use the spotify tile for their podcasts or stop listening to rogan.
many of those millions already use spotify as their tile for music. for them it will be an easy transition. they won’t care one way or the other which tile they use for podcasts. the black-and-green one has rogan and the purple one doesn’t. and if one tile does the job, why keep two? with spotify, they can have one tile not just for podcasts but for all their audio content. this is the core of spotify’s strategy. they’re already winning at music and to win at podcasts they’ve set out to use content exclusivity to create a two tile problem for listeners. a problem that spotify’s one tile can solve.
some upstart podcast creators will freely give their exclusivity to spotify. they’ll do so because spotify owns anchor, an innovative tool for publishing podcasts, and because spotify is building a powerful podcast advertising engine that will make it easier for creators to monetize. at least, easier according to spotify. musicians making fractions of fractions of pennies per stream offer a cautionary tale to the eager podcast creator.
the established podcast creators, on the other hand, have already figured out how to monetize. they’ll give their exclusivity to spotify in exchange for straight cash. first it was gimlet, then it was bill simmons, now it is rogan. and spotify isn’t done yet. the two tile problem will rear its ugly head for other fanbases in the future.
today there are plenty of podcast listeners that don’t care one way or the other about joe rogan. they vaguely remember him from fear factor and are oblivious to his impact on a large swath of the population. but soon, they too will face a similar choice. because the content exclusivity arms race has begun. the walled gardens are coming.
the permanent two tile problem
the podcast medium has been a green field of opportunity because the seeds of the medium were sown with RSS technology at its roots. RSS made it easy for apple to keep the door open to creators publishing their own content. it made it easy for product developers to innovate new and better tiles like the aformentioned overcast or pocket casts or castro. it also made it difficult for gatekeepers to monetize the podcast medium as they’ve done in music, news media, film, and television. apple had the best opportunity to gatekeep for most of the medium’s history, but they chose not pursue it.
so advertising flowed directly to the individual creators rather than an aggregated publisher. and any podcast tile could be an infinitely personalized, consumer-curated digital publication come to life. the ultimate tile for podcasts. because podcast players were simply vehicles for accessing an RSS feed. really simple syndication living up to its name.
now spotify has laid a foundation stone in the open field the podcast medium and upon that rock they will build their walled garden.
this did not begin last tuesday. spotify has been a looming threat to apple since they announced their entry into podcasts in early 2019. wary of that threat, apple has been in pursuit of exclusive podcast content and as a response to losing rogan, they’ve posted a new job listing: head of original content. exclusive to apple.
though they’d allowed the field of podcasts to remain open and flourish since the medium was born in an obscure corner of itunes, apple is a walled garden company through and through. the scaffolding of spotify’s strategy for podcasts grows taller and apple is scrambling to counter.
neither open fields nor walled gardens are inherently good or inherently evil. but once the walled garden duopoly is erected in the once open field of podcasts - each wall built on content exclusivity contracts - the listener will face a problem that is entirely new to the medium: what do you do when you want to listen to two different podcasts - one spotify exclusive and one apple exclusive?
the second tile problem rears its ugly head. and this time it cannot be solved.
the medium will never be the same.
cover art by frederick krieg - drawing, ceramic tile design - 1880 - public domain
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