Transcript
WEBVTT
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Yeah,
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welcome back to be, to be growth. I'm
dan Sanchez with sweet fish media and
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if there's one thing you have to know
about me, it's that while I like coffee,
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I like your Beaumont even more. If you
don't know what it is, it's worth a
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google, but I promise it's legal, it
definitely doesn't sound legal, I'll
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just let you google it for curious. We
had to jump onto this, this is like an
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impromptu recording here at Sweet Fish
Media because I just sent James an
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article about why why Spotify and why
essentially Apple is pretty much giving
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up podcasting the Spotify and it was an
interesting enough topic that James and
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I decided to push record and just kind
of banter back and forth about what the
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heck is going on in the podcasting
industry and why you as an audience
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should care. Yeah, so, so Apple just
seemingly has been crapping the bed
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when it comes to innovation with their
podcast product. I've been seeing more
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and more people. I've done two surveys
on linkedin, asking people where they
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consume their podcast content and I did
one about nine months ago and was
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surprised to see that it was like 55%
Apple 38% Spotify, something like that.
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Nine months later it was like 58%
Spotify, 40 something percent Apple. I
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mean, Spotify had had straight up taken
the lead and this isn't a huge data set,
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but I had about, I think 15 or 1600
people reply to those polls. I've seen
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other polls on Lincoln that say the
same thing, which just makes you wonder
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what the hell is Apple doing? Like they
had, they literally, I think they named
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the category podcasts like pod and
they're losing and seemingly they just
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don't care that they're losing. They
added this subscription product
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recently. Uh, that Spotify basically
just said, you know, hold my beer,
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we're gonna go and do what you just
said you were going to charge creators
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for and we're going to do it for free.
So anyway, this article that you just
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sent me uh kind of shed some light into
that. Do you want to elaborate on what
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that article talked about, sitting here
with you, wondering what the heck's
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Apple's game plan on this? It's kind of
like they sit on so much money, like
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why aren't they innovating around
podcasting? Like why aren't they doing
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anything? They already own the category.
Like they could continue easily, easily,
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continue to own the category. If they
take some of that huge pile of cash
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they're sitting on and just do
something about it. And then we were
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all sitting because we knew there gonna
be doing something around podcasting.
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This last release. They didn't remember
sitting there watching it live and
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being like, they gave like two minutes
of their hour long thing to podcasting
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and then just went into their other
products that they're releasing, you're
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just like what? That's it dang. And
then Spotify quickly stole any, any
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kind of thing they had by just totally
dominating their new offering. But this
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morning, Robin Hood serves me up
articles that of stock side investment
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naturally, I've been seeing the trends
with Spotify. So you know, I buy a few
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shares, not a lot, but a few, I'm
trying to read the tea leaves here,
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looking at Spotify growing and
podcasting and like we'll invest in
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things, you know, and you know, I get
this article kind of breaking down like
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what's going on between these two
companies just from a financial
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perspective and it brought so much
clarity as into why Apple doesn't care
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and why Spotify cares so much and it
really has to do with what was kind of
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documented in the book. The innovator's
dilemma, right? Big companies and it's
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kind of like the, just, just on that
book is that big companies go after
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where they have the most margins, big
companies go after where they know they
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can grow their financial pie in the
most substantial way. And for Apple,
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they make a ton of money in so many
different ways, mainly from their
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hardware, product sales and the
computers and the iphones and probably
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don't know. The app stores brings in as
much. It probably still brings in a lot
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of money. Maybe not as much as it used
to, I don't know. Um, but they make
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money in so many different ways.
They're probably looking at this
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podcast service and can like, like for
them, they weren't even making money
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off of it. It was kind of like an add
on. It was a way for them to their like
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just it was a way for them to keep
their users engaged. I mean, that's
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what the article laid out, like. It's
it's yeah, it just keeps apple users
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more engaged with the Apple ecosystem.
That's how they're looking at
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podcasting. It's like, oh, this is this
cute little thing on the side over here
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that just keeps our users a little bit
more engaged. Whereas Spotify, there
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are billions of dollars on the line for
Spotify because they've gone all in and
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they only care about podcasting and
that's kind of the other end of the
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innovator's dilemma, right? Is that
smaller companies? And I mean, no one
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thinks to Spotify as a small company,
but compared to Apple, it's a small
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company, right? They come in and find
the parts and to them while while it
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might be a small gain for Apple, it's a
big game for Spotify, right? It doesn't
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take a it doesn't take a lot for a
smaller company to see and seize the
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opportunity for it to become a huge
deal for a small company. Which
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classically is why big companies fall
hard and small companies end up
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innovating underneath them. In this
case we're talking about cos apples
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well diversified company with lots of
different irons in the fire. So it's
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not like this would disrupt Apple by
any means. But for Spotify, this could
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be huge because they're in the audio
game and podcasting lies squarely
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within that James. You want to share
the other part about why Spot, why this
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is so attractive. Dis Spotify. Yeah. I
mean to me it just seeing what Spotify
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has done with acquisitions like Joe
Rogan, the Ringer. I just saw the other
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day on Spotify that they are, that they
acquire Dax shepherd's show, armchair
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expert. And what they're essentially
trying to do, like their, their
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operating margin, according to that
article. They're operating margin on
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music is very, very small because you
have to pay licensing to the artists
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for music. But with podcasting,
especially when you're going and buying
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shows like Joe Rogan, his entire back
catalog or Dax Shepard Show or the
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Ringer, you're bringing on shows that
you don't have to pay licensing to.
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You've paid for the show. You, you've
essentially purchased the asset that
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you can then create ad revenue off of
and create, create additional, like you
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significantly increase your margin by
owning the asset as opposed to having
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to pay a licensing fee every time a
song gets streamed. So Spotify is
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seeing that they can make a whole lot
more money with podcasts than they can
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with music and hence hence them going
and doing all of these acquisitions and
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spending. So one thing I hope they do,
I hope they spin off a separate app. I
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actually tried moving over to Spotify
when I saw in linked in that so many
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people were moving over and I couldn't
do it. The, the, the user experience to
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me is too clunky um, to go between
music and podcasts and video in those
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podcast, it just, it's not a good
experience for if it wasn't for me. So
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I actually went back to Apple for all
of the problems that it has. Apple
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podcast is a standalone app that is
just focused on podcasts. So that's the
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next move. I hope we see Spotify making
is to split off podcasts into its own
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app, just so it can be a better
experience. But and I use Spotify for
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music, so it's crazy that I wouldn't
just want to use it for, you know, my
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podcast as well. But for whatever
reason, the the experience was just not
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very delightful. So anyway, that's that
I think is the underlying reason why
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their margins a whole lot, you know, a
whole lot bigger. um they can make an
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article said that their margin is
currently 25%, which isn't bad for a
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lot of companies, but compared to its
Kind of big brother in the streaming
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games Netflix, who's getting between 35
and 40% margins, Spotify has got to be
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more competitive, right? Because that's
the that's the closest kind of company
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to model after and they know they can
get it up to about, you know, into the
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same range if they could become the
leader in podcasting because the
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margins are so much better there. You
see how closely licensing for the
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podcasters. Yeah, you see how closely
they're following Netflix's model to, I
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mean with House of cards, I think that
was netflix's first foray into original
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content. You're seeing Spotify get into
it by acquiring Gimlet, who's got, I
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think they had 25 or 30 original shows
whenever Spotify acquired them. Um, and
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now they're, they're getting into
acquiring much, much larger shows. And
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uh, and so they're really following
Netflix's Playbook, just an audio. And
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it seems to be working because more and
more and more people are consuming
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podcast content via Spotify now. Yeah,
as professional podcasters, we are
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definitely paying attention to what
Spotify is doing, the technology
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they're putting out there all the
acquisitions they're making, anybody
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who's taking podcasting seriously has
to be watching Spotify because they are,
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they are going to be the ones once they
overtake Apple, which is going to be
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this year. While, I mean even the polls
were doing shows they've overtaken it
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already, but I know nationally, I've
looked at some data that suggests
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they're going to essentially, by the
end of the year, Spotify will be the
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new leader in podcasting, which means
once they're the leader they get to
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send the trends, they get to set what
podcasting becomes in the future. The
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future of audio and podcasting is going
to be determined by Spotify and
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everybody will have to play by their
rules, which I'm actually kind of
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excited about because I think they're
going to be putting a lot more. I think
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they're going to in order to do that.
They're giving a lot, a lot more tools
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and advertising and all kinds of things
for creators to do what they do apples
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like, oh, we're going to charge 30%
Spotify is like, well we're not
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charging anything because they know how
to make up the money elsewhere in ads
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are paid subscriptions. Yeah. I mean
when you're going for the whole
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ecosystem, yeah. When you've got a
category leader, whose only thing is
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that category, of course you're going
to see more innovation in it. It's all
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they, it's all they think about dream
about playing all day every day where
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podcast. This is clearly, you know what
the article called, A little, a little
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hobby on the side for that trillion
dollar organization over There and this
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might not apply to be, to be brands,
but it's gonna, it's gonna affect you
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and that you're going to be caught up
in the rising tide of podcasting. If
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you think about YouTube and they have
30 million channels on YouTube. One of
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the reasons why YouTube has had
continued success and I believe will
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continue to like grow substantially
over the next 10 years is that YouTube
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has actually figured out how to give
creators the most amount of money, who
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else gives creators money, twitch a
little bit. Nobody else. Everybody else
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charges money, Facebook and instagram
definitely charge money. Tiktok doesn't
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give creators money. So everybody goes
to Youtube to figure out how to make
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things that is B two C starts to figure
out like, oh, we can actually make a
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pretty good amount of money through a
podcast and it's easier to make
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podcasts and it is Youtube content
that's gonna attract a lot of
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creativity to the space. It's going to
blow up the BBC world as they, as
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people can figure out how to monetize
audio content more. And Spotify makes
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that easier for them to do. The whole
tide will rise and you'll start to see
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podcasting go from what I think we have
two million shows to 10 million to 50
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million shows. That's why they're
investing. That's why so many companies,
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even netflix is investing in audio
content now because it's at two million
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now. But if you knew was going from two
million to 50 million shows over the
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next 10 years, wouldn't you want to get
in on that? Absolutely. It's one of the
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things, one of the reasons we're
building a tool that we're building
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called showcase that auto clips, video
podcasts, into micro clips that you can
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use on Youtube or social. I mean, you
think about the revenue that joe Rogan
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makes from his three hour long episodes
or was making, I guess before he moved
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over to Spotify, that you can make
these creators are creating these clips
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from there, our to our three hour long
episodes. And each one of those clips
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are now making the money as well
because these, a lot of these clips
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from these big creators are getting
hundreds of thousands of use. So
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they're, they're monetizing each clip
on top of monetizing the entire episode.
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And so this is such an exciting space
to be in and I'm pumped. We jump behind
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here and got this little impromptu
episode on the board. Fantastic. So if
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you're not in podcasting now as a heck
of a time to start all the presses on
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it right now, but it's gonna grow more
so get in it. Yeah, I mean, sweet Fish
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Media can help you if you need help,
but you can get, you can get in with
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that is you can start a free podcast on
sounder anchor. It's not hard to get
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started. So at least get started dabble
in the water, play with it on the side,
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whatever you gotta do to get
comfortable with this medium because
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it's not going away any time soon start
building the skill set now because it's
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gonna matter. All right lady, y'all
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one of the things we've learned about
podcast audience growth is that word of
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mouth works. It works really, really
well actually. So if you love this show,
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it would be awesome if you texted a
friend to tell them about it. And if
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you send me a text with a screenshot of
the text you sent to your friend meta.
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I know I'll send you a copy of my book,
content based networking, how to
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instantly connect with anyone you want
to know. My cell phone number is
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40749033 to 8. Happy texting