Tech Brew Ride Home - Wed. 02/06 - Spotify Makes A Big Move Into Podcasting

Episode Date: February 6, 2019

Podcasting has its biggest news day ever, some pretty big executive shakeups, the new emojis for 2019 and how to steal a million dollars from an ATM without anyone noticing.  Sponsors: QCon.ai Promocode: QCONAI2019  Metalab.co Links: Spotify has bought two podcast startups and it wants to buy more (ReCode) Relaxation app Calm raises $88 million, valuing it $1 billion (CNBC) Facebook’s top PR exec is leaving (ReCode) 230 New Emojis in Final List for 2019 (EmojiPedia) Programmer finds ridiculous ATM loophole that let him withdraw $1 million in cash (The Verge) Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to the tech meme ride home for Wednesday, February 6th, 2019. I'm Brian McCullough. Today, podcasting has its biggest newsday ever, some pretty big executive shakeups,

the new emojis for 2019, and how to steal a million dollars from an ATM without anyone noticing. Here's what you miss today in the world of tech. My general tendency is to not report on podcasting news for fear. You all might think that I was being too inside. baseball. But hey, this is the biggest news ever in the podcasting industry. It involves a major tech player in the form of Spotify, making the biggest acquisition in its history, and this has been the lead story at the top of the page on tech meme all day. So, over the weekend, rumors started swirling that Spotify was purchasing podcast company Gimlet Media for what sources said was around $230 million.

Well, today, this was confirmed by Spotify itself, though the price was not confirmed, and Spotify threw a curveball by also announcing it had acquired Anchor as well. Anchor, the podcast hosting platform, that full disclosure, this very podcast is hosted on. You may remember us switching hosts about a month ago and also the fact that we are now doing weekend bonus episodes. That was all part of the deal we did with Anchor, full disclosure. But the big news here is a major, major move into podcasting by Spotify. And in a way, it makes total sense for Spotify. Spotify wants to be thought of as Netflix for audio. Spotify CEO Daniel Eck said something along those lines in his blog post announcing the acquisitions,

although I'm sure he wouldn't like me name-checking Netflix specifically. quote, consumers spend roughly the same amount of time on video as they do on audio. Video is about a trillion dollar market, and the music and radio industry is worth around $100 billion. I always come back to the same question. Are our eyes really worth ten times more than our ears? I firmly believe this is not the case. For example, people still spend over two hours a day listening to radio, and we want to bring that radio listening to Spotify, where we can deepen.

engagement and create value in new ways. With the world focused on trying to reduce screen time, it opens up a massive audio opportunity, end quote. So Spotify can get into spoken word, into radio, not just music. In his post, Eck said Spotify estimates that over time, more than 20% of Spotify's listening will be non-music content, and thus the move towards podcasting. Quote, our podcast users spend almost twice the time on the platform and spend even more time listening to music. We have also seen that by having unique programming, people who previously thought Spotify

was not right for them will give it a try, end quote. So podcasting helps drive subscriptions, and plus in this space spoken word, helpfully. There are no record companies to take a cut, of course. In Gimlet, Spotify gets a well-respected content creation. creation company. Gimlet makes popular podcasts like Reply All and the show Homecoming, which was recently turned into that Amazon Prime TV show with Julia Roberts. In Anchor, they get a podcasting platform that recently launched an ads marketplace. You've heard some of those ads on this very show. So Gimlet can keep churning out popular shows and Anchor can monetize them. Or, of course, Spotify

can make Gimlet's shows exclusive and create a sort of HBO for podcasts. Another reason for people to pay the monthly subscription to Spotify. But, and I can report on this directly, because Brooklyn is a small town, and it feels like half the podcasting industry exists within spitting distance of Atlantic Avenue, people that I have spoken to are absolutely agog at the rumored purchase price for Gimlet. No rumors yet on the anchor purchase price. But north of $200 million for Gimlet, when the biggest acquisition previously in the podcasting space

was when IHeart Media acquired Stuff Media, who makes those how stuff works and stuff you should know podcasts, acquired them for $55 million in September of last year. So what accounts for suddenly this nine-figure price tag? Well, you might not know him, but Nick Kwa writes a podcast, industry newsletter that we all subscribe to, and this is his take. He notes that Gimlet also has essentially a creative agency inside of it that helps produce branded content, ads, but also

full-on branded podcasts for brands. Quote, this is a creative agency that has developed relationships with built advertising experiences for and extracted a lot of money from an array of attractive advertisers that include Ford, Gatorade, Virgin Atlantic, MasterCard, Google, Microsoft, eBay, and Reebok. I imagine that all makes for a pretty attractive asset to somebody. And not unrelated, Spotify itself has been experimenting with branded podcast production, end quote. Also not on an unrelated note, Spotify reported Q4 revenue of 1.5 billion euros yesterday, up 30% year over year, and operating profit of 94 million euros.

Spotify says it has 207 million mouths. up 29% year over year, and 96 million premium subscribers up 36% year over year. Though Peter Kafka did flag this on Twitter saying, quote, non-podcast Spotify note. Spotify's average revenue per user is dropping down 7% because it is adding more people via discounted family slash student plans. But Spotify says its users are sticking around longer so the numbers even out, end quote. One other quick earnings report, and then I think tech,

earnings season is behind us. Snap reported Q4 revenue of $389.8 million, which was up 36% year over year. But guess what? Dow's daily active users, they stayed the same. It has the same number of daily active users, 186 million this quarter as Snap did last quarter. So that's good because that number had been dropping, although that's still less than the $191 million it had in the same quarter last year, but stabilizing is good.

Snap's stock was up 24% at the time I wrote these words. Meditation and Sleep App Calm has raised an $88 million series B round at a $1 billion valuation. Calm has now raised a total of $116 million. In case you're not aware of this space, Calm and Headspace are like the Uber and Lyft, of the meditation app space, and I don't even mean that to imply any sort of cultural connotations or analogies, just that they're the big leaders in the space, the bird and lime, if we're taking the analogy to e-scooters. Calm is actually the top-grossing health and fitness app and the 20th top-grossing app overall on iOS, according to App Annie. Quoting from CNBC, Calm quadrupled its revenue in

2018, putting the company at a $150 million annual revenue run rate. The app says it has more than 40 million downloads worldwide and well over 1 million paying subscribers. Some of Calm's content is free, while some of it is available only to subscribers. Calm started in 2012 as a meditation app and has grown into a guide for sleep and relaxation. It and fellow meditation app Headspace have harnessed consumers growing interest in and willingness to invest in their mental health and wellness, end quote. Some interesting tech executive shuffles. I don't remember if I said it on this show or just on Twitter, but when Facebook had that solid earnings report in the most recent quarter, I said that this would be the cover that some longtime executives needed to gracefully head for the exits.

I'm not sure this is exactly that. But Facebook's top, Public Relations Executive Karen Maruni is leaving Facebook, according to Kara Swisher and Kurt Wagner. Quote, why should you care about a PR person leaving? Because Facebook needs all the experience communications hands it can get these days, along with the Russian malfeasance. It also has faced intense criticism over data snafus hacking, the spread of disinformation, deaths in India and elsewhere due to sloppy management on the platform, and controversies over privacy, including a recent incident with Apple.

In her job running global communications for Facebook, Maruni's purview has encompassed its most critical products, including the flagship Facebook, WhatsApp, Instagram Messenger, as well as its AR and VR efforts. She is also the closest PR executive to CEO and founder Mark Zuckerberg, having worked for Facebook as an outside consultant for three years before she was hired. While a lot of leave takings at Facebook of late have been linked to its troubles, the Maruni departure seems sanguine in comparison,

She will stay at the company until a replacement is found and has not gotten publicly dragged into its most toxic messes, end quote. And then there's this. Angela Arendes, Apple's head of retail, is leaving that company after five years. Apple has named Deidre O'Brien, a 30-year Apple veteran as her replacement to take over as senior vice president of retail and people. I'll turn to Ben Thompson to read the tea leaves on this one. in Strateree, Ben posits that this too might be sanguine, but it is certainly surprising. There was just a major Vogue business profile published of Arendt's just last week

that didn't even hint that she might be leaving Apple, quoting Ben. Then again, perhaps it was simply a matter of the $70 million stock grant, Errant's received in 2014, fully vesting, and her itching to get back into fashion. It is also worth remembering that Errant's hire came during the run-up to the Apple Watch, which Apple initially marketed as a fashion item. Today, it is a successful product, but marketed around health and fitness. That errant's core expertise was perhaps less valuable than initially expected

fits into the broader Apple Watch story, end quote. Not really a story here, just something that I wanted to note. Remember that huge FaceTime bug from last week that let you listen in on other people's phones? Apple had to reset its servers and turn off group FaceTime entirely and promised it would have a software update to fix everything toot sweet. Well, it's been nine days now. No iOS 12.1.4. Not saying there's anything going on here, just wondering why it's taking so long.

The Unicode Consortium has finalized its emoji list for 2019, and there are 230 new emojis coming your way, like yawning face and pinching hand. Quote, emoji 12 is comprised of 59 distinct new emojis, 75 when gender variations are taken into account, and 230 new emojis when all skin tone options are also included. Unicode's announcement today indicates that all the documentation required for vendors to implement the new emoji set is now complete.

Links to relevant data files, technical documentation, and updated charts are all linked within Unicode's post and will be used by developers to add emoji support to operating systems, apps, and web platforms throughout 2019. Over in China, a programmer found a flaw in ATM machines that allowed him to withdraw $1 million in cash. Kin Kisheng was a programmer at Huaxia Bank.

He noticed that the bank's ATM system didn't record withdrawals made around midnight, basically dispensing cash, but not debatable. it from customer accounts. Thus, quote, Hishang started pulling out money in November 2016, but it wasn't until January 2018, some 1,358 withdrawals later, that the bank discovered the bad code in its system and brought him to the authorities. Perhaps the most surprising part of this story, the bank didn't want to keep pressing charges once he'd returned the money. Maybe fearing the bad publicity. Apparently the loophole has already been fixed.

Waxia Bank reportedly asked police to drop the case, reportedly accepting Kisheng's explanation that he was merely testing the bank's security and was holding onto the money for the bank to reclaim, as one does, end quote. Well, apparently, China's courts did not go along with this, and Kisheng is now facing 10 and a half years in prison because even though he paid the money back, technically he had transferred the cash to a personal bank account and even use some of the money to invest in the stock market.

There's white hat hacking to test your employer security, and then there's playing with the house's money, as it were. I'm going to do something a little bit different today. I mentioned Nick Kwa earlier in the episode, the dude who basically invented the podcast industry beat in terms of covering it journalistically. Well, when I got into the office this morning, I DM'd Kwa on a whim and asked him if he'd be willing to talk

about the day's news. Wasn't exactly expecting him to respond, but he responded right away and was like, let's talk right now. So we did, and it was great, and I didn't want our conversation to wait until the weekend, because this is the news of the day. It's fresh. So a few minutes after this episode drops, I'm going to drop a special emergency bonus episode, the interview with Nick Kwa about podcasting and what he thinks was behind those Spotify

acquisitions. We will still have two bonus episodes, Saturday and Slipped. Sunday this week as planned, but if you're listening to this right now, right away, as soon as I released it, check your feet again in a little, little while, and you'll have an extra treat as well.