Can Anchor be the Youtube for podcasts? And should they?

Anchor CEO Michael Mignano discusses the company's recent acquisition by Spotify, the future of podcasting, and whether Anchor could become the "YouTube for podcasts." The Verge's Nilay Patel and Ashley Carman talk to Mignano about the current difficulties the podcast industry faces along with possible solutions for discovery and questioning what to do with the RSS feed. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

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• 1:13Nilay Patel?

  Hey, everybody. It's Cian from The Vergecast. On this week's interview episode, I was joined by Ashley Carmen, who's the co-host of Watch, Push, That Button and one of our tech reporters focused on podcasts. We talked to Michael Mignano, who's the CEO and co-founder of Anchor. That's a very popular podcast creation app who was just acquired by Spotify along with Gimlet Media, which makes Reply All. We talked to Michael about what Spotify's plans are. Why are they buying all these podcast companies? And a lot about what Anchor is for, where it came from, where it's going, what his thoughts about the future of the podcast business are. One really big criticism of Anchor and also a compliment of Anchor is that it kind of feels like the YouTube of audio. We really unpacked that with Michael, really dug into what it means to centralize the podcast economy, whether that's a good or bad thing.

• 1:57Nilay Patel?

  Anyways, a super interesting episode. We also asked Michael about 500 times how much Spotify paid for Anchor, and he deflected it every time. So if you're a young tech executive on the make and looking for some guidance on how to deflect hard questions, this interview might be for you. Anyway, super interesting interview. Michael is very passionate about podcasts, Anchor. He's very excited about Spotify. I love this conversation. Check it out.

• 2:19Nilay Patel?

  We're here with Mike Mignano, the CEO of Anchor, now part of Spotify. Welcome.

• 2:25Speaker 03

  Thank you. Excited to be here.

• 2:27Nilay Patel?

  And Ashley Carmen, who is an accomplished podcaster of her own, also a person who reports on podcasts at The Verge, has joined me. Hey, Ash, how you doing?

• 2:34Speaker 04

  Good.

• 2:34Nilay Patel?

  Mike, congratulations.

• 2:36Speaker 03

  Thank you.

• 2:37Nilay Patel?

  You sold Anchor to Spotify.

• 2:38Speaker 03

  We did.

• 2:39Nilay Patel?

  A big, big deal. A lot of the focus was on the Gimlet folks, who also, in the same day, was announced they were selling Gimlet Media to Spotify. I'm sure Verge has listeners know, Gimlet makes Reply All, like a bunch of other fancy podcasts, I mean, Homecoming. But you guys, in that same press release, Anchor sold to Spotify. Real quick for everybody, give me the Anchor pitch. What is it that you make? What is it that you do? What is it that you're trying to do?

• 3:01Speaker 03

  I like to say that Anchor is the easiest way to make a podcast. That's it. We built Anchor, basically, because my co-founder, Nir and I, we tried to start a podcast of our own a few years ago. Honestly, probably would have been a similar podcast to, like, The Vergecast, similar topics. And then I looked into figuring out how we actually go about doing this, and I saw a bunch of pictures online that looked kind of like this studio. And we were both like, that sounds really, really hard. Let's not do this. But it actually, it inspired us to ask the question, well, what if, what if there's an easier way to do this? So it sort of became our mission to simplify this, this whole process.

• 3:38Nilay Patel?

  And the end result of that, the first version was an app?

• 3:41Speaker 03

  Correct.

• 3:42Nilay Patel?

  That's what, that's what it is?

• 3:43Speaker 03

  Yep.

• 3:43Nilay Patel?

  It's not like a hardware ecosystem.

• 3:45Speaker 03

  Full platform, yeah. So you have to go back a little bit to 2014. And of course, you know, our sort of first stab at, how do you simplify podcasting and make it easier and democratize it and make it a lot more fun? Of course, the first guess goes to, well, it should be a social network. And so, there were sort of-

• 4:04Nilay Patel?

  2014 was a very innocent time.

• 4:05Speaker 03

  Of course, of course. There were sort of two main components to that. There was simplifying creation and just making creation as simple as talking into your phone. There was that. And then on the consumption side, it was like, okay, how do we make this more fun? How do we make it engaging? How do we make it short form? How do we make it shareable? Right? Like podcasts are these big, chunky, monolithic files. Is there a way to sort of usher the format into the next whatever generation? So, of course, again, social network, feed of two-minute, short-form audio clips.

• 4:38Nilay Patel?

  And they, they were ephemeral, right? They went away after 24 hours?

• 4:40Speaker 03

  No, that was the second version. The first version of Anchor was very much just like a straight up feed. You followed people, there were these two minute clips. We saw very quickly that people were really into making this content. Like, it was clear that we had struck a nerve in making recording audio easy. Again, because it's complicated, right? Big chunky microphones, expensive software. But I think we hadn't really figured out the way to do consumption yet. We thought we could do something different than podcasting. But what ended up happening in the, in the couple of years since, you know, not to anyone's surprise, is podcasts became massive. Everyone loves listening to podcasts now. The big chunky monolithic format I mentioned is, is the desired format. It is the preferred format.

• 5:22Speaker 03

  So somewhere along the way, you know, through a couple of different product iterations, we realized, hey, we've built all of this creation tech. We've built this distribution platform. We've built audio file hosting. We've got ideas about how to do monetization. We should really just be focused on making it easy for anyone to make a podcast as, as we all know them today. And so we really shifted to that mindset about 18 months ago. And since then, it's Anchor has just been, like I said, the easiest way to make a podcast. So we've got tools for recording, tools for editing, hosting, distribution to every major platform. And most recently, we've, we've been really focusing on monetization.

• 5:59Nilay Patel?

  I just want to unpack the make a podcast because

• 6:02Speaker 03

  Yeah.

• 6:03Nilay Patel?

  You've described the problems that all media, all media types have to solve, right? Like, you gotta create some stuff. We live in a world where technology just makes it easier to create every day. It's like what The Verge covers. Then you have to distribute some stuff, which is usually very difficult. And then you have to monetize some stuff, which is usually the hardest part of all to do at any kind of scale, to make any kind of business happen. Along the way, I think most people kind of see how digital media generally works. It becomes very easy to make a video. YouTube captures the entire distribution market. They now control monetization of video for tons and tons of people. Maybe if you're lucky Netflix, someone's calling. You guys have, you haven't captured that, right? Like, there's still Apple Podcasts, you're now on Spotify, which is a huge podcast distribution

• 6:48Nilay Patel?

  platform. You're talking about monetization, but there's a bunch of other companies kind of floating around that ecosystem. Do you see that collapsing in that same YouTube way? Is YouTube your model? Is it something else entirely? Is it GarageBand your biggest competitor?

• 7:01Speaker 03

  So I think the insight we had when we were building Anchor was that distribution of podcasts and audio is actually very, very different than distribution of video or text or, you know, 140 or 280 character text. It's very, the distribution of podcasts as compared to these other platforms like Twitter and YouTube and Snapchat and Instagram is, the distribution of the same format is fragmented. And it's because of RSS, right? So the way podcasts works now is you, you know, you have an RSS feed and that RSS feed can be consumed by a number of different players or, you know, consumption platforms. And so I think the insight that we realized was, well, we don't need, we don't need to

• 7:44Speaker 03

  control the consumption experience to provide a ton of value to creators. We can just help make hosting and distribution really, really easy, right? So create the podcast either in your studio or on your phone, tap a button and we'll do the heavy lifting for you to get your podcast distributed everywhere. We'll make the RSS feed, you know, we'll get it up on Apple Podcasts for you, we'll get it up on Spotify for you, we'll get it up on Overcast or what other, what any other app that your, your audience might be listening on. And I think that's, to me, like, that, that has always been the thing that I think we realized creators really wanted. Like, new creators, especially new podcast creators, they just, they want to be heard, right? They want to be able to build their audience. And so if you can bridge that gap for them and make it easy to reach their listeners wherever they are, you're doing, you're doing a huge service to them.

• 8:29Speaker 03

  So for us, it's, it's been about solving that problem, right? Getting the audio to everywhere where, where people are listening. And that doesn't, and that doesn't change today, so.

• 8:40Speaker 04

  So with ownership, you know, you mentioned you guys make the RSS feed. Who ultimately owns that RSS feed? Like the podcaster, can they go back and get their back catalog of episodes? Can they check their own Apple Podcast analytics? Things like that, like how does ownership work with you? And then how could it work in the future with Spotify?

• 8:58Speaker 03

  Yeah, so this is a question that has come up before. So we've said from day one, because you know, that we we knew literally before we wrote a line of code that it was really, it was going to be really, really important to us that creators own their content. Right? So we had come from before Anchor, my co-founder and I worked at a company called Aviary, which ended up being acquired by Adobe. And that was all around empowering people to take and edit photos. Before that, I I spent five years actually in the music industry. This is when I was geeking out over Spotify through the VPN before it had launched. I was at Atlantic Records and and in all my roles, it was really, and Nears as well. It was like, it was always about like empowering the creator. And so before we wrote a line of code on Anchor, it was like, we got to, if we're going to make this easy, like, we need to make sure people are comfortable using our tools.

• 9:43Speaker 03

  And so since day one of Anchor, you've always owned your content like 100%. But what we realized was the concept of ownership didn't necessarily mean that creators didn't want to have certain aspects of their workflow simplified. So like RSS, we realized most new creators don't even know what an RSS feed is or care about an RSS feed. And that's totally fine with us. You know, if you if you don't care about an RSS feed, we're making it easy for you. If you do care about an RSS feed, that's cool, too. Like you own the content, you can grab it off our platform at any time. If you want to log into Apple Podcasts, like we transfer over the account to you.

• 10:19Nilay Patel?

  But you gotta move it. I think what Ash is getting at right now is the way the platform interacts with Apple Podcasts, it all comes through Anchor.

• 10:27Speaker 03

  Yep.

• 10:27Nilay Patel?

  So if you want to go and manage your own Apple Podcasts experience, you actually have to come off of Anchor and go do it manually.

• 10:34Speaker 03

  No, you can keep using Anchor. We just transfer the RSS feed to your Apple Podcasts account. So you get to keep doing it, you get to keep submitting, keep using our tools, no problem at all. We just sort of, we just sort of unbundle that option for you. And our distribution is totally optional. Like if you want to distribute using our like one tap distribution, you can. If you don't want to, from the get go, we can just give you the RSS feed and you submit it yourself, no problem. So it's like an optional, easy feature. Does that make sense?

• 11:00Nilay Patel?

  It does.

• 11:00Speaker 03

  Yeah.

• 11:00Nilay Patel?

  I think this this walks you into the big question, which is Apple Podcasts is the big dog. Right. They control a huge share of this market. You are now owned by the medium dog. Spotify fundamentally is a music distribution service.

• 11:14Speaker 03

  Yep.

• 11:14Nilay Patel?

  They're a music monetization platform as well. They do not have like a ton of music creation tools. As far as I know, there's not like a drum machine for Spotify creators to go use at their office. The reason I set it up is creation, distribution monetization is Spotify is all about being a single point of distribution for people, being a single point of monetization for people. How are you going to manage the fact that what you are currently offering is multi-point distribution monetization options with a platform that is very singularly focused on being that consumer aggregator, being that single point for people?

• 11:46Speaker 03

  Yeah. So if you think back to what I said, well, I guess, I don't know if the mics were on, but, uh, you know, I was talking about how, uh, one of the reasons I was, you know, I was so excited about joining Spotify was I realized in talking to, to Daniel Eck, the CEO and, uh, and Gustav, the, the chief R and D officer, um, was that our missions were so aligned, right? Like a lot of people don't realize this, but Spotify's mission is around unlocking creativity and enabling, enabling people to create and for their fans to consume and being able to earn a living. Right? And that's very similar to, to Anchor's mission around democratizing audio and making it really, really easy for people to create. And so I think, if you think about the stuff that Daniel mentioned on the day of this

• 12:28Speaker 03

  announcement and the earnings or in the earnings call, he talked about how Spotify is on this path from going to the leading music streaming platform to being the leading audio platform. Right? And I think the way you do that, and he touched on this a bit, is, is, is around not just growing creation of podcasts, like what Anchor is doing right now, but also just growing listenership of podcasts. Right? Podcasts, you know, the three of us in this room have, have probably been listening to them for a really long time, but there are many, many, many people in this world that don't yet listen to podcasts. And so from my perspective, I want to help making, make podcasts easier for everyone in the same way that Spotify wants to make listening to podcasts more widespread and, and mainstream.

• 13:09Speaker 03

  It's very important to me and to Anchor that we continue to maintain the distribution that we have today, because if we didn't, Nobody would want to use it, right? Like, if you, if you sign up for Anchor tomorrow and it was like, hey, you're only distributing on Spotify, people will be like, why would I want to use this? I have listeners everywhere. And so I think it's, to answer your question, it's, the way you distribute on Anchor doesn't change, because it would be really bad for creators.

• 13:34Nilay Patel?

  Is that in your deal? Do you get that in writing from Daniel?

• 13:37Speaker 03

  I can't talk about the deal, obviously.

• 13:40Nilay Patel?

  How much did you sell it for?

• 13:41Speaker 03

  I can't talk about that.

• 13:42Nilay Patel?

  Blink twice if it was a hundred million dollars.

• 13:44Speaker 03

  I'm looking at the ceiling and not blinking at all.

• 13:47Nilay Patel?

  He's never gonna blink for the rest of this interview. Well, we heard it was a hundred million dollars.

• 13:50Speaker 03

  I'm looking at the ceiling.

• 13:52Nilay Patel?

  He really is. So, what was their pitch? They came to you and they said, we want to buy Anchor. You went to them and said, look, I gotta get out. How did that process work?

• 14:01Speaker 03

  So I didn't say, I gotta get out. You know, fortunately, I had the opportunity to, to get to know Daniel a little bit over the years, two companies building products in similar spaces. And beyond the mission that, you know, that, that it was obvious we had sort of clear alignment around, Daniel said something to me, which I think is awesome, and which really resonated with us, which was that he and Gustav and the wider Spotify organization wanted to give Anchor superpowers. And what that meant was really around giving us the support and the infrastructure to be able to make better tools, to be able to offer better data, and in general, make podcasting better, right? Like, podcasting hasn't really evolved beyond the RSS feed and the big microphones we're

• 14:45Speaker 03

  talking into right now. And so having the backing of the most forward-thinking audio company on the planet and the biggest music streaming platform on a path to be the leading audio platform, I mean, it was just like an opportunity that's too good to resist. You know, we're, we're a 28-person team in New York. We've, you know, we've had a lot of success and growth over the past, you know, 12 to 18 months. We now power 40% of all new podcasts. But to be able to do it inside of an organization like Spotify that's so committed to audio and pushing podcasting forward, like, that's like the dream outcome for a startup, I think.

• 15:20Speaker 04

  So what is it about Anchor that you think made this deal go through? Like, does Spotify want to be a place where creators can create? Do they want this insight? Because I know a lot of people are starting up with Anchor to podcast. Do they want insight into who the up-and-coming creators are so they can? Lock them into that Spotify system.

• 15:36Speaker 03

  No, I, I, I think it's, I've been listening to podcasts for a while. I'm, I'm assuming the two of you have been as well. It's been around for what? 10, 15, 15 years. But there are very, very few number, a few number of people in the world who are actually making podcasts as compared to people making video, people taking photos, right? I mean, how many videos are on YouTube right now? I'm assuming billions, right? I, I think the point is we're just at the infancy of what podcasting will become over the next five, 10, 15, 20 years. And I think Spotify's view is, hey, we can, we can help make that better. We can help push, push the medium forward. Anchor is the company that's currently focused on that, so.

• 16:14Speaker 04

  They're like, we need a bigger catalog, bigger catalog, more creators and making more stuff.

• 16:19Nilay Patel?

  I can do the YouTube comparison with you like all day, cause it's super.

• 16:23Speaker 03

  Should we do it?

• 16:24Nilay Patel?

  I don't know. Well, YouTube doesn't make Premiere, right? They don't make iMovie. I think there's YouTube Capture is the one app they make that's like, shoot a video and send it to YouTube. And as far as I can tell, it was like not updated for like the iPhone 7, right? Like.

• 16:37Speaker 03

  But there's a gap there, right? Like, there's a gap there in audio that doesn't exist in video and photos, probably because of, of the devices, right? These devices have these baked in cameras. Photo taking is a very natural part of the experience when you get a smartphone. Audio hasn't gotten there yet. There's all this friction in between having an idea or a thought in your head and putting it up on, on a platform. And I think that's where Anchor has been successful. It's like, hey, how do we, how do we bridge that gap for you and get that thought in your brain? Out into the world as quickly and as seamlessly as possible. It's crazy to me that like in 2019, the medium that is like easiest to generate, you know, in terms of talking,

• 17:16Speaker 03

  is actually the hardest one to get out to the world, right? Like, we're sitting in a room with four huge microphones and headphones. Yet we're walking around with these phones that have microphones in them that are connected to the internet. That was always the, the gap that I think we wanted to bridge with Anchor and I feel like we're making some progress.

• 17:34Nilay Patel?

  The reason I, I keep coming back to YouTube. YouTube is huge. It has captured the entire sort of video distribution market. And the, the problems that they run into are very obvious problems for audio as well, right? You know, last week YouTube was like, we're not gonna monetize conspiracy theories. We're not gonna recommend any algorithm. A few months ago, Spotify was like, we're gonna stop recommending R. Kelly songs. Like, you have this huge catalog of stuff. You're democratizing creation. You're controlling distribution and monetization. There's just, I think now, a pretty well-understood set of problems, if not a pretty well-understood set of solutions. Do you see yourself playing a part in managing those problems now? Or are you focused on, we're gonna help you create and send that to the platforms?

• 18:19Speaker 03

  Yeah, you know, I don't know. I think it's hard to talk about what the future looks like from that perspective. I will tell you, something that we have always been really encouraged by, and honestly, kind of pleasantly surprised since the beginning of Anchor, is how thoughtful people are and how sort of respectful we've found people to be in audio. I don't know what it is about voice versus, you know, video or text on the internet, but it seems like the conversation is more thoughtful and respectful and like, I think people are just a little more mindful of what they're saying, maybe because they're focusing on their words and nothing else.

• 18:53Nilay Patel?

  You're like the last idealist.

• 18:54Speaker 03

  What's that?

• 18:55Nilay Patel?

  The last idealist in 2019.

• 18:57Speaker 03

  Yeah, maybe.

• 18:59Speaker 03

  But no, I guess my point is like, the content has been like, very good. And that's been really encouraging to me.

• 19:06Speaker 04

  Have you had to develop any tools to automatically detect? Like, I don't know what your terms of service are.

• 19:11Speaker 03

  Yeah, we do have processes in place to take care of, you know, obviously, the things that really, we don't think should be out there around hate speech and racism and misogyny and all that stuff. We've been surprised and delighted by how thoughtful people are with the platform.

• 19:26Nilay Patel?

  Yeah. So, that brings me to the final piece of this puzzle, which I'm gonna, I promise you, I'm gonna connect to RSS, because I can sense

• 19:34Speaker 03

  Let's do it.

• 19:34Nilay Patel?

  That in your heart, what you wanna talk about is the technical details of RSS. So, right now monetization, you're like looking at your PR person, like, how much did I trash RSS? The technical problem we solved was RSS is a pain to manage, podcasts are distributed as large files. So, like, an interesting problem we have as podcasters is, we have the Vergecast feed, I wanna drop Ashley's podcast, why'd you push that button into our feed? And I get emails from people that are like, you just used part of my data plan, right? Like, this is, we're gonna automatically distribute 50 megabytes to somebody. There it is. That is not a problem for Spotify, right? Spotify is like, here's wrapped caviar. It's a list of songs. You pick what you want. We're going to stream them to you. The move from distributing a full file to streaming the audio allows you to do all kinds

• 20:18Nilay Patel?

  of crazy things with money, right? Because we're not baking the ads in. You can do dynamic insertion. You can do ad targeting. You can do all this stuff, which I think people understand, once again, because of YouTube. There's a whole bunch of stuff you can do with ads on YouTube. There's a whole bunch of stuff you can do with ads on Instagram video, all these places where you're streaming the video. You're streaming the files and downloading it. Are you looking at, we're just going to get away from RSS entirely? We're going to start streaming this audio. We're now partnered with a big streaming audio provider. We're going to start thinking about ramping up monetization with targeted ads and all that sort of thing?

• 20:48Speaker 03

  Two-part answer. First part is, the truth is, people do listen to RSS right now. And back to my point earlier about making things easier for creators. I think if we were to come in here and say, okay, RSS is dead. Podcasting is, podcasters are not going to get to use RSS.

• 21:02Nilay Patel?

  It would be great for our show. So is RSS dead?

• 21:04Speaker 03

  You would lose all your listeners, right? Because...

• 21:06Nilay Patel?

  No, I just meant for this one episode of downloads.

• 21:09Speaker 03

  I don't think that's realistic, and at least today. And, you know, we're certainly not thinking about that future today. What I can say is, there are actually still a lot of innovations to be made in monetization with RSS. So, this is what Ashley and I have talked a bit about. Anchor came out with a feature two or three months ago called Anchor Sponsorships. So basically, the premise for sponsorships was monetizing a podcast is really, really hard. You guys actually talked about this a few weeks ago when you talked about the Spotify deal. If you want to get an advertiser on your podcast, you've either got to go chase them down and prove to them that you are worthy of having an advertiser on your podcast, or the other way around. A sponsor has to chase you down, right? And find your show and decide that it makes sense.

• 21:53Speaker 03

  And then, the two of you need to get together and do a deal and agree that you're going to do these live reads. And then you have to figure out how to report back, et cetera. And there are some agencies out there that have obviously made this at least somewhat simpler. But it's still like a really manual process. And because of how manual it is, so few people can actually monetize their podcasts. So, there was some data that we saw that showed that only 1% Of podcasts in the US were being monetized via ads, which is the primary way the podcasts currently are being monetized. So we said, hey, we've got all of these podcasters. We have scale. We've got, you know, 40% of all new podcasts. What if we were able to marry that scale with the creation tools we offer to solve this problem for monetization?

• 22:37Speaker 03

  And that's effectively what sponsorships is. Basically, we give brands and potential sponsors the ability to sponsor against our entire catalog. And when those brands get matched with a show, that show or that podcaster has the ability to decide whether or not they want to take advantage of that sponsorship, learn about the brand, learn what they stand for, and opt in to getting a message, a script essentially, that they can then deliver to their audience via Hostred Ads that, you know, that we help them sort of insert into their podcast. And so just in like the first month after we launched that, we immediately doubled the number of podcasts in the US that were monetizing via ads.

• 23:20Speaker 03

  We're getting like thousands and thousands and thousands of podcasters paid. And so

• 23:24Nilay Patel?

  What's your, what's your split? What cut does that

• 23:26Speaker 03

  70, 30.

• 23:27Nilay Patel?

  Okay.

• 23:27Speaker 03

  Which we found in doing our research was, was really good for creators and they've been super happy with it. And again, back to just making it easy for creators, right? So who knows what's going to happen to RSS? But I think there's so much we can do to improve this format, even in a world where RSS is sort of dominating the medium.

• 23:44Speaker 04

  I have heard creators say that, independent creators, say they're worried about losing money because of deals like this. Because they, yes, it's more work. They go out and negotiate. But the people who are supporting themselves are saying, well, I get the full cut. I negotiate. I don't have, there's not all this big data behind it.

• 23:59Speaker 03

  Yeah.

• 24:00Speaker 04

  It's kind of like, I have a relationship with the advertiser. And so they worry that, like with Rad even, or with Spotify coming in and all this data, they're not going to be able to actually justify their advertisers anymore.

• 24:10Speaker 03

  So I actually think doing this potentially rises all ships, right? Like right now, there's such a limited number of podcasters that brands can reach. And it's such a manual process that you only have like a few brands playing in the space. I mean, we've all heard, you know, all the same brands on many different podcasts.

• 24:28Nilay Patel?

  Our advertisers are unique and special. The promo code is promo code.

• 24:34Speaker 03

  So my point is, though, I think that by sort of opening up podcast sponsorships, you allow all of these new brands and these new, at all different amounts, to come in and get many, many more people paid, potentially in many more different ways, that I think it'll have a very significant net positive on the entire ecosystem and independent creators. So I'm encouraged.

• 24:54Nilay Patel?

  What do you make of the podcast analytics? Ashley just sort of made reference to it, but right now, podcast analytics are bad. It's like, kind of flatly bad. Like, Apple will report some, like, listen times and drop off times, you report some stuff, but there's no way to go out in the world and say, this many people listen to a podcast. It's actually very, very difficult. And the pushback is, that's great. Like, view counts ruin everything, clicks ruin everything. Like, we hear it all the time on every platform. Do you think that actually is gonna have, like, a negative incentive? You're just talking about how thoughtful everyone is. Is that just because they don't know how many people are listening to that?

• 25:27Speaker 03

  I think you're totally right. I think RSS has obvious limitations on data and insights and understanding what can be done with your podcast. Two things. I think, number one, whatever happens here, I think, again, we need to be really, really thoughtful to preserve what is special about the medium. And I think that's like, that goes back to, you know, really, really focusing on creators, sort of at the center. Like, it's all about the creator, and it's all about making their lives better. The minute that priority gets thrown out the window, that's when, that's when bad things happen. So I think that's, that's number one. And then I think, number two, is, I'm really encouraged, because there are a bunch of people that are trying to figure out how to solve this problem.

• 26:07Speaker 03

  And without saying too much, one of the reasons I'm excited that Anchor is a part of Spotify is because I think we can, we can help improve data for the creators. We can help them give a better understanding to their creators about, to the creators about what's working, what's not working within their podcast, who is their listener, where in the world are they, that sort of thing. I want to help push the medium forward, and I think we have a better shot at doing that within Spotify.

• 26:32Speaker 04

  How do you think about listeners data?

• 26:34Speaker 03

  Yeah, look, I think, back to my point about creators, like, we have, we have to prioritize creators and make it better for them, but we can't do it at the expense of listeners, ever. Otherwise, listeners aren't gonna want to listen, because, because who would want to expose all their, their personal details to, you know, big gigantic corporations? So I think it's just about being thoughtful and learning from what has happened over the past couple of years, in making sure-

• 26:57Nilay Patel?

  There's a crack in that idealism.

• 26:59Speaker 05

  Yeah, I'm like, this is a tall order, man. Good luck. Like, this is all right.

• 27:04Speaker 03

  Look, I think creators first has been sort of our mantra. I think, again, Spotify has shown to me and the anchor organization that they really, really care about their mission. And that's, and that's one of the reasons I'm so excited to be a part of them now.

• 27:19Nilay Patel?

  All right, we got to take a quick break for an ad. We'll be right back.

• 27:26Nilay Patel?

  Hi, I'm Neelai Patel, editor in chief of The Verge. And Decoder is my show about big ideas and other problems. This week is part of our special series on the future of business. I talked with Matthew Prince, co-founder and CEO of CloudFlare, about how AI bots and agents are remaking the business model of the web and how CloudFlare is trying to build a new economy around websites getting paid every time an AI crawler shows up.

• 27:47Speaker 06

  We polled all of that data and looked at it and said that, you know, it would be the second half of 2027, automated traffic will become larger than human traffic. I was stunned when, just a few months later in May, a team came to me and said, you won't believe it, but automated traffic is now past human traffic online. And that's just expanding like crazy. And if you extrapolate that out, five years from now, we think that automated traffic will be a thousand times human traffic online.

• 28:12Nilay Patel?

  This was a fascinating conversation, not just about the future of the web, but also about how one of the world's most important software companies is deciding which of its employees it can replace with AI. Listen to Decoder wherever you get your podcasts.

• 28:25Speaker 00

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• 29:06Nilay Patel?

  All right, back talking anchor with Mike McNano.

• 29:10Nilay Patel?

  So here's what we haven't talked about. We haven't talked about smart speakers.

• 29:13Speaker 03

  Yeah.

• 29:14Nilay Patel?

  How do you think about those?

• 29:15Speaker 03

  Yeah.

• 29:15Nilay Patel?

  You think everyone should be wake up in the morning and demand podcasts from their Amazon Echo? Like, we've seen some data, you know, like, I would love to make an Alexa skill for The Verge, where like, I don't know, Dieter just yells the name of a gadget at you like four times a day.

• 29:26Speaker 03

  Yeah.

• 29:27Nilay Patel?

  That would actually be great. If someone's out there wants to build that for me.

• 29:29Speaker 03

  Yeah.

• 29:29Nilay Patel?

  But we haven't figured out, like, are people actually, do people want this from us? What do you think? Like, do you, do you think that market is big? Do you think it's small? Do you think you need to play in it?

• 29:37Speaker 03

  I think it is big. I think it's super early days, even though that these devices are now in so many millions of homes in the US. And that number, I'm sure, is just gonna continue to explode over the next few years. That doesn't mean we're anywhere close to understanding, like, the impact and the potential, and what the interface is, and what the interaction is, and what is the exact type of content that people want from it. It's really, really early. I think that the companies that are building these devices are gonna have an awesome opportunity ahead of them to invent, like, a whole new paradigm for interacting. I'm really excited. I'm obviously biased. I work for an audio company, so I have these things all over my house and like, I talk to them, I, you know, I pull up podcasts on my smart speakers all the time.

• 30:20Nilay Patel?

  But even that discovery process is super messy.

• 30:23Speaker 03

  Yeah.

• 30:23Nilay Patel?

  I don't, I could not predict, when I'm like, play The Vergecast.

• 30:27Speaker 03

  Yeah.

• 30:27Nilay Patel?

  Is my Echo gonna do TuneIn? Is it gonna find it from Spotify?

• 30:31Speaker 03

  Yeah.

• 30:32Nilay Patel?

  It's a lot messier than you'd expect.

• 30:34Speaker 03

  No, I think there's a lot of improvement that needs to be done there, obviously, on the discovery side. And I don't think it's a challenge that anyone has really dealt with yet, right? Like, anytime someone has attempted to solve discovery, they've had, you know, they've had the addition of a screen that they could take advantage of and put, you know, and put a UI in front of somebody. So I think it's a really interesting challenge. I'm, I'm excited for it to get figured out. I will tell you, even, you know, even with that challenge still existing, people are listening to this stuff. Like, we see in the data, like, people are listening to podcasts on these devices, a lot, actually. So that's an interesting insight because, you know, I think it always goes back to, like, great content finds a way. Like, if there's something that people want to consume, even if the discovery process sucks, like, they're gonna figure out how to get it, you know,

• 31:17Speaker 03

  in their morning flash briefing, or narrative news rundown, or whatever it is. So I, I'm personally just really excited.

• 31:22Nilay Patel?

  Are you worried at all that this market is getting totally saturated? And there's only so many hours in a day. Netflix just, in their last earnings, was like, our biggest competitor is Fortnite. Like, we're like, at the end of attention. Like, we're, we're out of time for all the things. How do you see podcasts competing with all of the things? With True Detective, Game of Thrones is coming out in April. Are you gonna see podcast listens decline? Like, how do you, how do you manage against that loss of attention?

• 31:47Speaker 03

  I think they're different hours. The way I, I always thought about it with, you know, with building Anchor is it's a different set of hours that you're, that you're, you know, you're, you're fighting for or whatever, right? People listen to audio in certain situations, driving in their car, walking to the subway, on the subway, on a plane, whatever, while they're working. Um, and then they look at video or text or whatever when they're on their couch or maybe multitasking with audio. So I, I don't see them as being super in competition with one another. I also think that, you know, I don't know if this is what you were getting at, but I don't think there's a lot of audio content out there, at least spoken word, podcast content. Obviously, there's a ton of music content out there. And Spotify has obviously done a great job of bringing that to people. But I think, I think there can be so much more podcasting content.

• 32:33Speaker 03

  Like, we have this guy, Dave, in our office, who, um, he welds on the weekends, and he's like, really into woodworking. And like, there's this whole new world of woodworking podcasts that were created on Anchor, that the three of us would have no idea about, right? But Dave has found these niche podcasts that, according to him, like, don't have a lot of listenership, they're really tiny, they're these really niche audiences. He actually like, wants to give them money and pay them and support these creators. But, that's okay. There can be millions and millions and millions of podcasts. It's okay that maybe, you know, some of these podcasts only have a few listeners if, you know, if the creator is sort of getting, getting what they want out of it in terms of an audience or potentially monetization. Again, I'm not sure if this is what you're asking, but I don't think we're anywhere near saturation in terms of the amount of content.

• 33:17Nilay Patel?

  We've talked a lot about ads, is the primary way of monetizing. There is a world, Ashley Caversley, there's like, Patreons and Kickstarter's. Are you thinking that? You know, woodworkers, you know, forty-five woodworkers should get together and give a hundred bucks a year and, you know, the woodworking community should thrive.

• 33:33Speaker 03

  So, funny you should ask.

• 33:34Nilay Patel?

  By the way, just in case a listener did not track that wild thing, are you thinking about subscriptions, payments?

• 33:40Speaker 03

  So funny you should ask. We have a feature actually called listener support. So sponsorships tends to get a lot more of the attention because advertising, to your point, is the, you know, is the primary way that podcasts are monetized today. But we do have a feature called listener support where if you enable it, I can, with a single tap through Apple Pay or Google Pay, give you a monthly recurring donation.

• 34:02Nilay Patel?

  Are people using it?

• 34:02Speaker 03

  Yeah, people are using it. People are getting paid. People are, you know, people are funding their passion.

• 34:07Nilay Patel?

  At a meaningful scale or at a, hey, well, it's, it's working.

• 34:10Speaker 03

  So I don't, I don't have the data in front of me. I know that people, I know that people are really happy with it. Like, we hear people all the time, they're so excited that they've got listeners that are literally just donating money to, to fuel their, their creative passion. So, but you can imagine that we probably spend more time on that and, and work on improving it. I do think that many different business models can exist within podcasting. You know, sponsorships, advertising is obviously the primary way right now, at least in the US. But if you look to other markets like China, you know, there are completely different models working really, really well with, with podcasting right now. I'm, I'm optimistic that a number of different models can work here and should work here, right?

• 34:48Speaker 03

  If that welder has, you know, an audience of fifty, a hundred people that want to give him or her, you know, ten bucks a month, like, why not? That's amazing. Like, maybe you can become a full-time welding podcast creator.

• 35:00Nilay Patel?

  And that is the dream of the internet.

• 35:02Speaker 03

  It's a dream.

• 35:02Nilay Patel?

  Like, when Tim Berners-Lee invented the web, he's like, at the end of this, there's gonna be a welding podcast.

• 35:07Speaker 03

  Yes.

• 35:07Nilay Patel?

  It's a full-time job. But like, paywalls. Like, I mean, that's the, the next, listener support is one thing.

• 35:12Speaker 03

  Yeah.

• 35:12Nilay Patel?

  The next one is you don't get access unless you pay the money.

• 35:15Speaker 03

  The medium's gonna have to figure out what works there. It's never really been tried in the US at least. So, um, I think we're gonna have to figure out what works and what people are willing to do. I'll tell you what, they're admitting a paywall on the remaining episodes of Serial after like the first one. I would have paid.

• 35:32Nilay Patel?

  That's evil.

• 35:33Speaker 03

  I would have, I would have paid. No.

• 35:34Nilay Patel?

  I probably would have paid.

• 35:35Speaker 03

  I would have paid like a hundred dollars.

• 35:36Nilay Patel?

  And then you would have discovered the answer is we still kind of don't know. I mean, that's like a huge success story, but you have to build that demand. You have to build that marketing funnel.

• 35:44Speaker 03

  I could name a lot of podcasts that I would, personally, this is just me, like I would pay for. Cause I think that people, I think creators should get paid for their work.

• 35:51Nilay Patel?

  So just to be really clear, right now, your business model is you help people sell ads and you take that 30% cut.

• 35:58Speaker 03

  So a slight variation, I would say we help people monetize, right? We've got sponsorships, we've got listener support. You can imagine there are other things that we could do. And then we share in the revenue with them from the value we sort of create together.

• 36:10Nilay Patel?

  Just to come back to Spotify, we've now described like 15 potential feature. Is your feature map subject to their, to their oversight or you just get to run?

• 36:20Speaker 03

  You know, can't get too much into, to future planning stuff. Don't want to spoil any surprises, obviously. But, but again, you know, it's only been a few weeks, but it's been pretty, pretty incredible to know that we have Spotify's support in pursuing this mission that, you know, the entire anchor team cares so much about.

• 36:35Nilay Patel?

  But I wouldn't be doing my job if I didn't push.

• 36:37Speaker 03

  Okay.

• 36:38Nilay Patel?

  Spotify is a public company.

• 36:39Speaker 03

  Yes.

• 36:40Nilay Patel?

  That's turn a profit.

• 36:41Speaker 03

  Yes.

• 36:41Nilay Patel?

  They don't spend a hundred million dollars.

• 36:43Speaker 03

  I'm not blinking.

• 36:44Nilay Patel?

  Yeah.

• 36:45Speaker 03

  No comment.

• 36:46Nilay Patel?

  Great. Whatever X million dollars, they spent some huge amount of money. They don't spend that money unless they want something. They didn't want to just make you happy. What did they want? Like, what is the thing that they want anchor to provide the Spotify platform? And what is the thing that you're ready to provide?

• 37:02Speaker 03

  So the first, first part of your question, I think, I think you'll have to get Daniel Ek in here.

• 37:07Nilay Patel?

  Sure.

• 37:07Speaker 03

  To hear about the Spotify strategy. What is the thing that they want to make better for us? They want to make it easier to go along our mission of making podcasting really, really easy. Again, if you think back to what Daniel said around how he expects, I think he said over 20% of, of audio or of consumption to be non-music content. Like, we agree. Like, I think, I think that's possible. And I think that. Podcasting can play a huge role in that, especially given how nascent the format is in the US. So Spotify wants to give Anchor superpowers.

• 37:36Nilay Patel?

  No, it's great. They're a charity. It's, that's how I think of large public companies.

• 37:40Speaker 03

  Again, you should.

• 37:41Nilay Patel?

  We will. We're working on it. Go back and send, you're, you got an at spotify.com email address now. I think for Anchor in particular, I think these deals were announced, the first question was, is Reply All going to be exclusive to Spotify? Right? And they spent their time answering that question. And I think there was some, there was more consternation over that because people love content. They don't want it to be threatened. I think there was legitimate excitement about a tech company and a tech, like that makes sense in a way. The real questions are, are we going to stay focused on multi-platform distribution? The sort of, you're going to be a big company now with a lot of podcasters on your platform? Are you going to turn into the YouTube where the questions about how you monetize become very, very contentious every single day? I think that's all remains to be seen. So we'll have you back in a little bit.

• 38:26Speaker 03

  All right, let's do it.

• 38:27Nilay Patel?

  To talk about it. But I do want to end on some actual lightning round question.

• 38:30Speaker 03

  All right.

• 38:30Nilay Patel?

  Echo or, or Google Assistant?

• 38:32Speaker 03

  I have both. I really do.

• 38:35Nilay Patel?

  Which one do you use more?

• 38:35Speaker 03

  I think I use Google more.

• 38:37Nilay Patel?

  iPhone or Android?

• 38:38Speaker 03

  iPhone. Although I, so I'm a, I'm a product, I'm a product person, like, you know.

• 38:42Nilay Patel?

  Yeah, I know. The answer to all these is going to be both.

• 38:43Speaker 03

  No, no, no, hold on. No, listen. I'm iPhone right now and I've been on an iPhone for the past year plus, but I, I do occasionally do this thing where I like, I will switch. I'll take the SIM card out. I won't do the two phone thing. You know how some people like carry two? They like have an iPhone. You carry two? Which one's your main one?

• 38:59Nilay Patel?

  Oh, the iPhone.

• 39:00Speaker 03

  Yeah. And then you have the Android, like, hey, I'm going to test it out. I'm just going to, you know, I'm going to occasionally try it. And I have found that that never works for me. I just never end up using it. So I found that I had to really force myself. So I do the SIM card swap, usually once every year or two.

• 39:15Nilay Patel?

  AirPods sound good or sound bad?

• 39:17Speaker 03

  So I am not sensitive to sound quality. I know some people, like our friend, Dr. Podcasts, John, for those of you listening, he's our head of production at Anchor.

• 39:26Nilay Patel?

  And was our first podcast producer.

• 39:29Speaker 03

  He cares a lot about sound quality. I, I care more about content and substance, which people often tell me is ridiculous because I, the whole first part of my career was in music. I grew up a musician, a drummer. But I can't tell the difference between like an MP3 and like a flak lossless audio. I have no idea what the difference is. I'm totally fine with AirPods. Like, I think the quality's just fine.

• 39:51Nilay Patel?

  Wow.

• 39:52Speaker 03

  Yeah. What about you?

• 39:53Nilay Patel?

  I think this sounds horrible.

• 39:54Speaker 03

  Really?

• 39:55Nilay Patel?

  Mediocre at best, but very, very, very convenient. And I think-

• 39:58Speaker 03

  Super convenient.

• 39:59Nilay Patel?

  The history of the music industry tells us that convenience wins over quality-

• 40:02Speaker 03

  Convenience wins, exactly.

• 40:03Nilay Patel?

  Every, every single time.

• 40:04Speaker 03

  Exactly.

• 40:04Nilay Patel?

  More podcasts listening in your car or like commuting on the go?

• 40:09Speaker 03

  I have a car, but being in the, you know, the tri-state area here, I like, we never, we never drive it. So, um, I would say subway, you know, walking around the city. That's where all my podcast listening happens.

• 40:20Nilay Patel?

  If you could change one thing about podcasts, what would it be?

• 40:22Speaker 03

  I think we've done a pretty good job of making creation pretty easy, but there's still friction there, right? Like still have to like take out my phone, put it on the table or hold it up to my ear. Like my dream is that I don't even have to like think about firing up the podcast. I can just like have a thought and somehow easily trigger it and say it. And then it's just sort of out there into the world. Like I wanna, I wanna remove as much space as possible in between thought and you hearing it.

• 40:46Speaker 04

  Brain chips.

• 40:47Speaker 03

  Brain chips.

• 40:48Speaker 04

  Got you.

• 40:48Nilay Patel?

  This is like the worst AirPods feature is like people just randomly narrating. It's like showing up in your Spotify.

• 40:54Speaker 04

  God, no.

• 40:56Nilay Patel?

  The idealism is great. I just, I'm, I'm nervous about like, I'm on the subway and it sucks here. Being like that, that's not the song I want at all.

• 41:04Speaker 03

  Well, consumption is an, is an opt-in experience, right? You could turn off my brainwaves if you want. It's all good.

• 41:11Nilay Patel?

  Last one, hardest one.

• 41:12Speaker 03

  Okay.

• 41:12Nilay Patel?

  Oh geez. You can't take the easy out because there's a super easy out here.

• 41:15Speaker 03

  Oh man.

• 41:15Speaker 04

  Alright.

• 41:16Nilay Patel?

  Favorite podcast.

• 41:17Speaker 03

  Ooh.

• 41:19Nilay Patel?

  I mean, you can pick Ashley's podcast.

• 41:20Speaker 03

  Um, so you know what I'm listening to a lot right now is the, uh, the recapables. Cause I'm obsessed with True Detective, season three. So that's like, I can't wait every week to watch True Detective. And then I'm so excited that I just get to jump right into the recapables and hear the recap.

• 41:35Nilay Patel?

  There's a whole story, a book, a sociology PhD about the secondary media you consume after the first media.

• 41:41Speaker 03

  Totally. Yeah.

• 41:42Nilay Patel?

  I do it too. I'm like, well, I just finished that video game. I'm gonna read Wikipedia about it for-

• 41:46Speaker 03

  Oh my God. Totally.

• 41:48Nilay Patel?

  All right. Mike, thank you so much for being with us. I wanna have you back, maybe with Daniel in a few months.

• 41:52Speaker 03

  Talk to Pete.

• 41:53Nilay Patel?

  See if you guys are still vibing. See if he's like, these superpowers are really, uh. No, but it was really great to talk to you. Congratulations on having you back.

• 42:01Speaker 03

  Thank you so much.

• 42:03Nilay Patel?

  All right, that was Michael Mignano from Anchor, now Spotify. Also, thanks to Ashley for joining me. She's so smart about this stuff. I love it. We'll be back this Friday with the regular Vergecast. And then next Tuesday, this will be fun. We're going to have our South by Southwest episode that we're taping live in front of an audience at South by. You can come see that if you're going to be at South by in Austin. Come to Vox Media's big house at the Belmont. It's called the Deep End. We'd love to see you there. Love to have you cheer for us. I'm working hard on some surprises, but we'll see how it goes. That'll be next Tuesday.

• 42:39Nilay Patel?

  Hi, I'm Neelai Patel, editor in chief of The Verge, and Decoder is my show about big ideas and other problems. This week is part of our special series on the future of business. I talked with Matthew Prince, co-founder and CEO of Cloudflare, about how AI bots and agents are remaking the business model of the web and how Cloudflare is trying to build a new economy around websites getting paid every time an AI crawler shows up.

• 43:00Speaker 06

  We polled all of that data and looked at it and said that, you know, it would be the second half of 2027, automated traffic will become larger than human traffic. I was stunned when, just a few months later in May, a team came to me and said, "You won't believe it, but automated traffic is now past human traffic online." And that's just expanding like crazy. And if you extrapolate that out, five years from now, we think that automated traffic will be a thousand times human traffic online.

• 43:25Nilay Patel?

  This was a fascinating conversation, not just about the future of the web, but also about how one of the world's most important software companies is deciding which of its employees it can replace with AI. Listen to Decoder wherever you get your podcasts. This series is presented by EY.

• 43:41Speaker 07

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