November 28, 2024 • 5 mins
In this episode, we dive deep into the evolving landscape of creator revenue opportunities by analyzing two major platforms: Spotify and YouTube. With the rise of subscription-based and ad-supported models, creators are faced with a critical decision—where should they invest their time and content to maximize revenue and audience engagement?Key Takeaways:
- Platform Differentiation: Learn how Spotify combines editorial curation with algorithmic discovery ("algatori") for a balanced approach, while YouTube leans heavily on algorithm-driven virality.
- Revenue Models: Discover how Spotify’s subscription-based revenue sharing compares to YouTube’s ad-supported structure, including their respective transparency and predictability.
- Milestone Programs: Understand Spotify’s vision to incentivize creators with milestones akin to YouTube’s iconic "play button" program.
- Shifting Monetization Strategies: Explore Spotify’s push towards premium subscription revenue as a sustainable alternative to ad fatigue, contrasting with YouTube’s dynamic ad-driven model.
- Discoverability vs. Dependability: Why Spotify prioritizes consistent creators who build loyal audiences, while YouTube rewards creators who master the algorithm for viral success.
- Diverse Content Opportunities: Unpack Spotify’s support for multi-modal content like audio, video, books, and courses, versus YouTube’s dominance in short-form and long-form video content.
- Tools for Creators: See how Spotify plans to integrate AI tools for easier content creation and enhanced personalization, while YouTube continues to lead with advanced analytics and insights.
- Cultural Positioning: Examine how Spotify’s roots in music and podcasting shape its approach to content, while YouTube remains a central hub for experimental video genres.
- Ad-Free Experiences: How Spotify is creating a win-win for creators and consumers with subscription revenue, and what that means for the future of YouTube Premium.
- User Feedback: Why Spotify’s curated playlists and human-algorithm hybrids are redefining engagement, and how YouTube’s metrics-driven model still dominates in feedback loops.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Okay, so get ready because we're diving deep into the
world of creator.
Speaker 2 (00:04):
Revenue, always a fascinating topic.
Speaker 1 (00:06):
Yeah, and we've got this reference sheet comparing Spotify and
YouTube and it's really kind of making me rethink this
whole creator economy thing, you know.
Speaker 2 (00:15):
Yeah, well it's really interesting how those two giants are
approaching it. Yeah, almost like philosophically differently totally.
Speaker 1 (00:20):
And you've got Spotify over here, like leaning hard into subscriptions,
like they're saying, hey, creators, build a loyal fan base
here and will help you monetize them directly, you know,
cutting out the need for ads, fewer ads. What's the
strategy there, do you think?
Speaker 2 (00:36):
Well, I think it's a few things. It's partly about,
you know, creating a better experience for the listener you're
not constantly bombarded with ads. But it also gives Spotify
more control over the revenue flow, and it really leans
into that idea of building a community around creators.
Speaker 1 (00:55):
Makes sense, especially since they're already so strong in podcasting
where that subscriber relationship is key. But let's be real,
YouTube is the eight hundred pound gorilla in the room. Sure,
and that fifty five to forty five ad revenue split
they have is almost the industry standard. Now, yeah, is
that hard for Spotify to compete with?
Speaker 2 (01:13):
I think for creators just starting out, it is, okay,
because you know, that YouTube algorithm, if you can crack
the code, has the potential for huge viral.
Speaker 1 (01:22):
Hits, right and quick cash.
Speaker 2 (01:24):
But you're kind of beholden to the algorithm. You're constantly
chasing trends.
Speaker 1 (01:28):
Okay, So for those of us not planning to become
the next big overnight YouTube sensation, what does Spotify offer
besides you know, just fewer ads.
Speaker 2 (01:37):
Well, they're talking about these milestone programs, ok similar to
YouTube's play button system, gotcha. But for that to work,
they need super transparent metrics. Creators need to know exactly
how many streams equal a payout Okay, what watch time
targets they need to hit. And that's where YouTube has
the advantage right now. Their system is very clear, very predictable.
Speaker 1 (02:00):
You want that predictability, right, you want to know what
you're working towards totally. But isn't there a risk for
YouTube potentially? I mean haven't we all gotten annoyed by
those endless ads?
Speaker 2 (02:11):
Of course?
Speaker 1 (02:12):
Could that drive people to subscription models, even if they
cost money.
Speaker 2 (02:16):
That's the gamble that Spotify is taking. Yeah, and YouTube
is responding you see it with YouTube Premium. Yeah, but
it's not their main focus, right, So it really raises
the question how much are people willing to pay for
an ad free experience?
Speaker 1 (02:31):
Yeah? Great question. Okay, So it's not just about the
money though, right, it's about the kind of content you're making.
And Spotify seems to be saying, bring us anything, audio, video, books, courses.
Speaker 2 (02:44):
Yeah, they want it all.
Speaker 1 (02:45):
They're really pushing this multimodal.
Speaker 2 (02:47):
Experience, right, and that makes sense given their background. They're
building on that strength in music and podcasts, right, trying
to become this one stop shop for all kinds of content. Yeah,
that's interesting, and I think what's especially fascinating to me
is to think about how they're podcasting expertise, right, actually
change how we consume longer video content.
Speaker 1 (03:07):
Oh interesting, you know, make it.
Speaker 2 (03:09):
More digestible, maybe even interactive.
Speaker 1 (03:11):
Wow.
Speaker 2 (03:12):
Yeah.
Speaker 1 (03:12):
Meanwhile, you've got YouTube, which is laser focused on video,
pushing creators to innovate in different formats, whether it's long
form documentaries or those super short shorts. But they're both
banking on AI Oh absolutely. I read that Spotify is
developing some crazy AI tools to help creators.
Speaker 2 (03:31):
Yeah, it's true. They're investing heavily in AI to streamline
production and enhance the user experience. I mean imagine AI
suggesting music for your video based on the mood oh wow,
or even generating subtitles in multiple languages automatically.
Speaker 1 (03:47):
Wow. Yeah.
Speaker 2 (03:48):
So YouTube isn't ignoring AI either, They're just focusing it
more on analytics right now, giving creators incredibly detailed data
about their audience.
Speaker 1 (03:56):
That's super valuable.
Speaker 2 (03:57):
Yeah.
Speaker 1 (03:57):
So it seems like they're both using AI, but in
very different.
Speaker 2 (04:00):
Ways, very different approaches.
Speaker 1 (04:02):
But at the end of the day, don't both platforms
rely on algorithms to decide what we see and hear.
Speaker 2 (04:10):
To a certain extent, Yes.
Speaker 1 (04:11):
I mean what does that mean for creators?
Speaker 2 (04:13):
Well, that's a huge question, isn't it. You know, how
much control do algorithms have over what content gets discovered,
what goes viral? And how do we as consumers even
know what we're missing right because an algorithm decided we
wouldn't be interested.
Speaker 1 (04:28):
It's almost like, are we in control of our own
online experiences anymore? Or these platforms and their algorithms calling
the shots.
Speaker 2 (04:36):
Yeah, it's deep question.
Speaker 1 (04:37):
Wow, they got deep fast, But it's crucial yea.
Speaker 2 (04:40):
You know, with all this talk about AI and algorithms,
what happens to truly original content? Can it break through
the noise? Or are we all just stuck in these
personalized echo chambers?
Speaker 1 (04:52):
So much to think about?
Speaker 2 (04:53):
Definitely?
Speaker 1 (04:53):
What's it out to you from all of this?
Speaker 2 (04:55):
I think that the whole algorithm question is really fascinating.
Speaker 1 (04:59):
Yeah, you on team Spotify with their subscription focus.
Speaker 2 (05:02):
You know, I'm not sure yet. I need to see
how it plays out, see what kind of tools they develop,
and how creators respond.
Speaker 1 (05:10):
All right, So you're not picking sides yet?
Speaker 2 (05:12):
Not yet?
Speaker 1 (05:12):
No, okay? Or are you sticking with the tried and
true ad model of YouTube?
Speaker 2 (05:18):
I mean, it's worked for YouTube for so long it's
hard to imagine them abandoning it, right.
Speaker 1 (05:24):
Or maybe you're like me and you're now wondering, is
there a third option? Maybe some other way to approach
this whole thing?
Speaker 2 (05:31):
Yeah? Well, the landscape is definitely shifting, and it's not
just about the money anymore. It's about control, user experience,
the very future of content creation.
Speaker 1 (05:43):
It's a lot, it is and on that note, we'll
leave you.
Speaker 2 (05:46):
To ponder all of that happy pondering.
Speaker 1 (05:49):
Thanks for joining us on this deep dive. It's been
a pleasure, and keep those questions coming because the conversation
is far from over. Absolutely, see you next time. Bye,
Okay, so get ready because we're diving deep into the
world of creator.
Speaker 2 (00:04):
Revenue, always a fascinating topic.
Speaker 1 (00:06):
Yeah, and we've got this reference sheet comparing Spotify and
YouTube and it's really kind of making me rethink this
whole creator economy thing, you know.
Speaker 2 (00:15):
Yeah, well it's really interesting how those two giants are
approaching it. Yeah, almost like philosophically differently totally.
Speaker 1 (00:20):
And you've got Spotify over here, like leaning hard into subscriptions,
like they're saying, hey, creators, build a loyal fan base
here and will help you monetize them directly, you know,
cutting out the need for ads, fewer ads. What's the
strategy there, do you think?
Speaker 2 (00:36):
Well, I think it's a few things. It's partly about,
you know, creating a better experience for the listener you're
not constantly bombarded with ads. But it also gives Spotify
more control over the revenue flow, and it really leans
into that idea of building a community around creators.
Speaker 1 (00:55):
Makes sense, especially since they're already so strong in podcasting
where that subscriber relationship is key. But let's be real,
YouTube is the eight hundred pound gorilla in the room. Sure,
and that fifty five to forty five ad revenue split
they have is almost the industry standard. Now, yeah, is
that hard for Spotify to compete with?
Speaker 2 (01:13):
I think for creators just starting out, it is, okay,
because you know, that YouTube algorithm, if you can crack
the code, has the potential for huge viral.
Speaker 1 (01:22):
Hits, right and quick cash.
Speaker 2 (01:24):
But you're kind of beholden to the algorithm. You're constantly
chasing trends.
Speaker 1 (01:28):
Okay, So for those of us not planning to become
the next big overnight YouTube sensation, what does Spotify offer
besides you know, just fewer ads.
Speaker 2 (01:37):
Well, they're talking about these milestone programs, ok similar to
YouTube's play button system, gotcha. But for that to work,
they need super transparent metrics. Creators need to know exactly
how many streams equal a payout Okay, what watch time
targets they need to hit. And that's where YouTube has
the advantage right now. Their system is very clear, very predictable.
Speaker 1 (02:00):
You want that predictability, right, you want to know what
you're working towards totally. But isn't there a risk for
YouTube potentially? I mean haven't we all gotten annoyed by
those endless ads?
Speaker 2 (02:11):
Of course?
Speaker 1 (02:12):
Could that drive people to subscription models, even if they
cost money.
Speaker 2 (02:16):
That's the gamble that Spotify is taking. Yeah, and YouTube
is responding you see it with YouTube Premium. Yeah, but
it's not their main focus, right, So it really raises
the question how much are people willing to pay for
an ad free experience?
Speaker 1 (02:31):
Yeah? Great question. Okay, So it's not just about the
money though, right, it's about the kind of content you're making.
And Spotify seems to be saying, bring us anything, audio, video, books, courses.
Speaker 2 (02:44):
Yeah, they want it all.
Speaker 1 (02:45):
They're really pushing this multimodal.
Speaker 2 (02:47):
Experience, right, and that makes sense given their background. They're
building on that strength in music and podcasts, right, trying
to become this one stop shop for all kinds of content. Yeah,
that's interesting, and I think what's especially fascinating to me
is to think about how they're podcasting expertise, right, actually
change how we consume longer video content.
Speaker 1 (03:07):
Oh interesting, you know, make it.
Speaker 2 (03:09):
More digestible, maybe even interactive.
Speaker 1 (03:11):
Wow.
Speaker 2 (03:12):
Yeah.
Speaker 1 (03:12):
Meanwhile, you've got YouTube, which is laser focused on video,
pushing creators to innovate in different formats, whether it's long
form documentaries or those super short shorts. But they're both
banking on AI Oh absolutely. I read that Spotify is
developing some crazy AI tools to help creators.
Speaker 2 (03:31):
Yeah, it's true. They're investing heavily in AI to streamline
production and enhance the user experience. I mean imagine AI
suggesting music for your video based on the mood oh wow,
or even generating subtitles in multiple languages automatically.
Speaker 1 (03:47):
Wow. Yeah.
Speaker 2 (03:48):
So YouTube isn't ignoring AI either, They're just focusing it
more on analytics right now, giving creators incredibly detailed data
about their audience.
Speaker 1 (03:56):
That's super valuable.
Speaker 2 (03:57):
Yeah.
Speaker 1 (03:57):
So it seems like they're both using AI, but in
very different.
Speaker 2 (04:00):
Ways, very different approaches.
Speaker 1 (04:02):
But at the end of the day, don't both platforms
rely on algorithms to decide what we see and hear.
Speaker 2 (04:10):
To a certain extent, Yes.
Speaker 1 (04:11):
I mean what does that mean for creators?
Speaker 2 (04:13):
Well, that's a huge question, isn't it. You know, how
much control do algorithms have over what content gets discovered,
what goes viral? And how do we as consumers even
know what we're missing right because an algorithm decided we
wouldn't be interested.
Speaker 1 (04:28):
It's almost like, are we in control of our own
online experiences anymore? Or these platforms and their algorithms calling
the shots.
Speaker 2 (04:36):
Yeah, it's deep question.
Speaker 1 (04:37):
Wow, they got deep fast, But it's crucial yea.
Speaker 2 (04:40):
You know, with all this talk about AI and algorithms,
what happens to truly original content? Can it break through
the noise? Or are we all just stuck in these
personalized echo chambers?
Speaker 1 (04:52):
So much to think about?
Speaker 2 (04:53):
Definitely?
Speaker 1 (04:53):
What's it out to you from all of this?
Speaker 2 (04:55):
I think that the whole algorithm question is really fascinating.
Speaker 1 (04:59):
Yeah, you on team Spotify with their subscription focus.
Speaker 2 (05:02):
You know, I'm not sure yet. I need to see
how it plays out, see what kind of tools they develop,
and how creators respond.
Speaker 1 (05:10):
All right, So you're not picking sides yet?
Speaker 2 (05:12):
Not yet?
Speaker 1 (05:12):
No, okay? Or are you sticking with the tried and
true ad model of YouTube?
Speaker 2 (05:18):
I mean, it's worked for YouTube for so long it's
hard to imagine them abandoning it, right.
Speaker 1 (05:24):
Or maybe you're like me and you're now wondering, is
there a third option? Maybe some other way to approach
this whole thing?
Speaker 2 (05:31):
Yeah? Well, the landscape is definitely shifting, and it's not
just about the money anymore. It's about control, user experience,
the very future of content creation.
Speaker 1 (05:43):
It's a lot, it is and on that note, we'll
leave you.
Speaker 2 (05:46):
To ponder all of that happy pondering.
Speaker 1 (05:49):
Thanks for joining us on this deep dive. It's been
a pleasure, and keep those questions coming because the conversation
is far from over. Absolutely, see you next time. Bye,
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