The Sixth Horseman

Image Credit: Lem Lattimer

Scott Galloway’s The Four: The Hidden DNA of Amazon, Apple, Facebook, and Google was published on 3 October 2017.

The book eponymously covers this century’s Four Horsemen of the Apocalypse that we still embrace while distrust.

In the past year, Microsoft’s ($MSFT) stock is up over 20%. In the past 5 years, it is up over 180%.

In the same time frame, Netflix’s ($NFLX) stock is up over 40% and almost 500%, respectively.

Meanwhile, Wall Street orgasmed when Apple ($AAPL) and Amazon ($AMZN) each eclipsed $1 trillion last year.

And today neither company remains above that level… though Amazon will live above in the four-comma club next decade.

This week, Spotify ($SPOT) has formally announced the acquisitions of both Gimlet Media and Anchor.

When Alex Blumberg, co-founder of Gimlet Media, first launched the StartUppodcast, I was vicariously having panic attacks listening to his narration of building the company in (slightly delayed) real-time.

Ditching the name American Podcasting Corporation was a good move, by the way.

I never had the urge to publish my own podcast, but testing out in March 2017 showed that the process was extremely easy:

  1. Sign up for Anchor
  2. Record your episode
  3. Be heard everywhere

SV Angel made a $1.6 million seed round investment in February 2016, according to my archived inbox of CrunchBase emails.

Also, leading the seed round was Eniac Ventures, who interviewed the founder and CEO of Anchor, Michael Mignano, last month on its podcast:

Let’s just say that both firms earned a good return on investment:

[Spotify CEO Daniel] Ek believes that Spotify’s bet on podcasts will lead to 20% of all Spotify listening being non-music content in the future. ‘This means the potential to grow much faster with more original programming — and to differentiate Spotify by playing to what makes us unique — all with the goal of becoming the world’s number one audio platform.’

Spotify is now planning more acquisitions for podcasts in 2019, and the company notes it’s willing to spend around $500 million to grow its podcast business this year. Recode reports Spotify paid around $230 million for Gimlet alone. Spotify also revealed today that it had 207 million monthly active users in the recent quarter, alongside 96 million paid subscribers. That’s nearly double the 50 million Apple Music subscribers that CEO Tim Cook revealed in Apple’s recent earnings call.

It’s a bold goal, and Spotify has already been striking deals to bring original shows to its service. Amy Schumer’s 3 Girls, 1 Keith appeared on Spotify, and the service has also obtained exclusive streaming rights for the current season of Crimetown. Spotify’s Gimlet acquisition will certainly help lock more original content to the service, and could draw people over from rivals like Apple Podcasts or Stitcher.

In December, Ben Thompson pointed out the new age of supply-and-demand that’s likely absent from economics textbooks:

Distribution is free, and in markets where supply is plentiful, value accrues to the companies that own demand — that is, those that have the most end users thanks to their superior user experience; I call them Aggregators.

Translated: a lot of individuals, startups, corporations, etc. can all accumulate a limitless supply.

But demand will be in the hands of centralized players that have subscribed or active users.

Netflix owns your eyeballs. Will Spotify own your earbuds? Probably.

I haven’t canceled my Netflix in many years.

I have no plans to cancel Spotify.