Spotify Presses Play on Live Audio
Spotify Acquires Betty Labs
Spotify (SPOT) inked a deal to acquire Betty Labs, giving it a foothold in the live audio market. Terms of the deal were not disclosed, but investors seemed to welcome the news. Shares of Spotify were up 2% at market close yesterday.
Betty Labs is based in Los Angeles and operates Locker Room, an audio app that enables fans and sports enthusiasts to talk about sports in real-time. Its direct rival is Clubhouse, another popular audio app.
Spotify said it plans to focus on expanding Locker Room into other areas of live audio once the deal is complete. “Creators and fans have been asking for live formats on Spotify, and we’re excited that soon, we’ll make them available to hundreds of millions of listeners and millions of creators on our platform,” said Gustav Söderström, Chief Research & Development Officer at Spotify.
The Rise of Live Audio
Spotify’s acquisition of Betty Labs comes at a time when live social audio apps are getting a lot of attention thanks to the launch of Clubhouse in 2020. The invitation-only app came to prominence during the height of the pandemic as people were stuck at home and had time on their hands. The app also provides users a way to combat “Zoom fatigue” because they can entertain themselves and connect with others without using a screen.
As of mid-March, Clubhouse has been downloaded more than 12 million times. On Clubhouse, users enter virtual rooms to chat about different topics, from sports to investing. The idea is to mimic in-person group conversations. Spotify will work to expand Locker Room so it will also offer discussions about sports, music, culture, and other topics for users to choose from. The streaming service operator also wants to give creators features so they can connect with their fans in real time.
Competition Heating Up
Spotify isn’t alone in going after the live audio social market. Heavy hitters including Twitter (TWTR), Facebook (FB), and Microsoft (MSFT) have either entered the space or are eyeing the market. Microsoft is reportedly considering purchasing chat app Discord for roughly $10 billion.
The popularity of live audio apps could simmer down as more people recieve COVID-19 vaccines and more in-person entertainment opportunities become available. But Spotify and other tech companies seem to believe the rise of audio apps could be a long-term trend.
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