Perspectives: Opinions from our network of advisors, investors, operators and analysts on the risks and opportunities they see.

So far, 2019 has seen the audio industry abuzz with acquisition deals, new funding rounds, and snazzy new feature launches. As the music-streaming industry evolves, what’s in store for musicians?

In this interview with Chad Huffman, director of broadcast at Megatrax, a top royalty-free library for film, radio, television, and advertising productions, Karma Network Contributing Editor Michael Moran explores the effects of Spotify’s February acquisition of Gimlet Media and Anchor, as well as SoundCloud’s release of a self-distribution feature for paid members.

Michael Moran: What has the industry response been to Spotify’s recent acquisitions of Gimlet Media and Anchor? What do these deals mean for the audio sector?

Chad Huffman: I think it’s a really positive move. For Spotify, I think it’s a very strategic move [and] kind of dual-sided. Partnering with Anchor, I think, is really great for their monetization. To own the company that’s placing all the ads [is]only going to increase their profits. And to be able to offer that type of monetization to podcasters, where Anchor’s [strength has] traditionally been, and I imagine transferring that to musicians and bands in some way, that’s a fantastic model to keep it all in-house.

With both Gimlet and Anchor on board, and of course the Spotify platform, it’s really creating a whole ecosphere where it keeps you entrenched in Spotify.

You know, I was listening to Crimetown, one of Gimlet’s big podcasts. The second season is a Spotify exclusive. It got me off of the Apple platform and back onto Spotify, which I hadn’t paid much attention to over the last couple of years. I’ve mostly stuck to Apple. But because of their exclusivity with that particular podcast, it brought me, as a listener, over there.

And then of course the interaction starts [with]he music on Crimetown and the way they produce that podcast. As a music fan, you get very invested in the way it feels and sounds.They’re producing a playlist [music that inspired their] second season. And it’s like, “Oh man, cool! I am going to listen to that playlist!” And so now as an active listener, I’m staying on the Spotify platform. I’m getting advertisements pitched to me. I think it’s a fantastic idea.

Michael Moran: What are some risks for Spotify in its expansion into podcasting? Is it possible that podcasting won’t sit well with a traditionally music-focused Spotify audience?

Huffman: I don’t think it should be too big of a concern. I mean, [of] the numbers I looked at, about 52% of podcasts are listened to on Apple, and Spotify already owns about 19% or 20%. So you’ve got roughly 30% of the other spots that you can draw from.

You know, podcast listeners are active listeners, meaning you’re really engaged in the story, whereas when you listen to music, you can put it on in the background while you’re cooking, or hosting a party, or whatever.

And so I think that it’s only going to create engagement. It’ll get you to the Spotify platform with good content. Again, them getting Gimlet is really key to this because Gimlet is well-known for their stories. [They]are intriguing [and] really well-produced, and music is heavily involved in what they’re doing and how they present their podcasts. It’s definitely aimed [at keeping] listeners on the platform. That’s nothing but a good thing for them.

Michael Moran: Let’s switch for a second to SoundCloud’s recent release of its self-distribution feature. How does that affect music industry business models, and the musicians themselves?

Huffman: From an artist standpoint, the self-distribution on SoundCloud is not entirely different, I don’t think, than the way it sounds like you and I used to release our music, right? Save up some money, [record] an album, and go and try [to] hustle it out yourself. Self-distribution on SoundCloud is very much the same thing. It’s just a different delivery method. When you’re an up-and-coming band and nobody knows about you, how does this help? It allows you to get it out and exist on the various platforms, but that still doesn’t drive traffic to your album or to your songs.

So for all these companies —Apple Music, Spotify, and everybody else — content is king. Having all this stuff is key. But, you know, from an artist standpoint, it’s not about the content being king. It’s about good content being king. Ad it’s about how you’ve managed to stand out.