Twitter Buys Breaker, Raises Questions About Its Audio Strategy

Last week Twitter acquired the podcasting app Breaker. But Twitter apparently isn’t planning to integrate the Breaker app into its platform. Instead, Twitter will kill the Breaker product and integrate its founding team instead. Why? To work on developing Twitter’s Spaces audio service.

Here is what Breaker CEO Erik Berlin said in a blog post announcing the Twitter deal and the closing of Breaker, a podcasting app known for its innovative social features. The app will cease operations on January 15.

“We’re now inspired to go even further in re-imagining how we communicate with each other, beyond the scope of traditional podcasts.”

So this begs two obvious questions. What the heck is Spaces? And how is it moving audio beyond the podcast? The first hint comes in the Spaces tagline on Twitter. “Sometimes 280 isn’t enough.” That’s a reference to the character count of a tweet. And it suggests Twitter wants to be a player in longer-form content. In this case audio.

 

Spaces, which seems only to have a presence as a Twitter account right now, is being widely compared with Clubhouse, the invitation-only audio-based chatroom/social network that has earned some criticism for its exclusivity. It has also been criticized for tolerating abuse on the platform. The app is popular with big wig tech bros and celebrities. It has cleverly built up a cache around receiving an invitation to join.

The Anti-Clubhouse?

Twitter has said little about Spaces. But one of the attributes it is touting is inclusiveness. Perhaps Jack wants to build the anti-Clubhouse.

Here is what we do know about Spaces, according to this article on Engadget.

Spaces are, as noted, audio-enabled chatrooms. Twitter users can create rooms, or Spaces, and invite their followers to join them in the Space. Anyone can join to listen. But only the host can control who speaks. There are social features like emojis that allow listeners to engage during a talk. Twitter apparently will be adding a transcript feature as well.

So why hire a team that built a well-regarded podcasting app to build it out? It’s a move that suggests ambitions well beyond creating a chat room. We can only speculate, but we can see Spaces evolving into a podcasting alternative for Twitter users who want to create a podcast-like experience for their followers, but perhaps with more of a dinner-party intimacy vibe. It might be a faster, easier way to build an audience for a podcast-like experience.

We would also imagine Spaces will want to add some commercial features. Perhaps subscriptions for premium versions of a Spaces event. Much in the same manner that podcasting is moving in a premium subscription, bonus-content direction. We imagine the team’s mandate is to re-invent audio. Not just to make podcasts better.

Localogy 20/20: How Will Radio Continue to Change?

Watching Twitter in 2021

Localogy included Twitter in our Annual Watch List of companies that bear extra scrutiny by our analyst team in 2021. The fact is Twitter is under investor pressure to find a way out of its perennial underperformance compared with Big Tech rivals like Facebook, or even Snap.

Launching a breakout product that isn’t just a me-too version of an existing product or feature (thinking of you, Reels) could be Twitter’s path out of mediocrity. Will audio be that play? Possibly. Another avenue, not mutually exclusive to audio, would be to pivot from an ad-based to a subscription model. Twitter investor, podcaster, and all-around troublemaker Scott Galloway has been relentless in pushing Twitter in this direction. And last year, the company signaled it was listening.

On its Q2 2020 earnings call, Twitter CEO Jack Dorsey announced the company was testing a subscription model with a small team housed within its payments operation. Here is what Jack said at the time.

“We want to make sure that any new line of revenue is complementary to our advertising business. We do think there’s a world where subscription is complementary, [and] we think there’s a world where commerce is complementary. You can imagine work around helping people manage paywalls as well, that we believe is complementary.”

We haven’t heard much about it since. But Twitter’s MO is to test products quietly before rolling them out. We wouldn’t be surprised to see a subscription rollout in 2021

Falling Ad Revenues Add Pressure for Twitter Subscription Play

Not Alone in Exploring Audio

Other major tech players have also been circling around the podcasting space. Most notably, back in May 2020, we reported on Amazon’s plans to invest in podcasting. In particular, Amazon is interested in local news and sports podcasts in particular. A new startup called CityCast also has ambitions to revitalize local news via the podcasting format.

Inside Amazon’s Local Podcasting Play

More Twitter Acquisitions

Twitter has made a few other small acquisitions recently. First, it acquired Squad, an app that creates a virtual screen sharing and hangout environment. Seems pretty pandemic-friendly. Twitter also acquired the design agency Ueno. The agency had been working with Twitter before the acquisition. The deal seems, like with Breaker, more of a team acquisition than anything. Uneo will shut down and the team will join Twitter.

In a blog post dated yesterday, Ueno founder Haraldur Thorleifsson said the following. “Today I am happy to announce that Ueno is joining Twitter to help build the future of one of the most influential brands in the world.”

Is there a common thread to these acquisitions? One common denominator is that Twitter is acquiring talent, more so than tools, in order to ramp up its development and rollout of new products. Again, more reason to name Twitter a company to watch in 2021.

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