It has been clear to Spotify for a while now that if it wanted to be the destination for all things audio, it was going to have to beat Clubhouse at its own live-audio game. To do that, the company just announced it is acquiring a company called Betty Labs, which makes an app called Locker Room — it operates like Clubhouse, but with a particular focus on sports fans.
Locker Room was born out of an app called Betty, which founder Howard Akumiah created as a way to make live sports predictions with his friends. Betty got a little too close to sports gambling for his tastes, and Akumiah realized the most fun part of the product was the live chat that was happening during games. People were coming to Betty when the game was on, because they knew there would be someone in the app talking about it. "The real impetus for Locker Room as we know it today is actually sports talk radio," Akumiah said.
Over time, Locker Room developed a lot like Clubhouse did. Some rooms were loud and chaotic, while others started to feel more like talk shows. Akumiah appreciated both, but saw a particularly big opportunity in helping the platform's best creators build a business on Locker Room. "I think our first focus, before we think about monetization for us, will be thinking about monetization for creators specifically," Akumiah said. Obviously the first part won't be so important anymore, and Locker Room can push hard after helping creators make money.
Helping creators also happens to be exactly what Spotify is focused on. The economics of streaming are brutal for all but the biggest artists, but Spotify sees an opportunity to help people build an audio audience outside the record industry. "We think the space is so much larger than most people realize," CEO Daniel Ek told The Verge last month, "both in the amount of consumers that care, the minutes that will be spent in audio, and the amount of creators that ultimately will create content. So it's in the billions of consumers, and we believe more than 50 million creators will create." (Ek tacitly admitted to some Clubhouse-related paranoia in that same interview, which might help explain the speed of this move.) Spotify has pushed for years to be a place to not just listen to music, but to create it, remix it, share it and curate it.
Live audio presents an interesting integration challenge for Spotify. Podcasts and music are both mostly consumed on-demand, are both divided into concrete items, and are both able to be broken down and understood at a content level. "Real-time is a specific challenge," Gustav Soderstrom, Spotify's chief R&D officer, told me last month. "You have to understand ideally more about the creator, the topic, the metadata around it." The playlist is still Spotify's organizing principle, and live, ephemeral audio chats don't necessarily lend themselves to playlisting.
On the other hand, audio chat gives users yet another reason to spend time with Spotify. And Spotify has many tools to offer them, whether it's millions of songs they can weave into their chats or tools like Anchor for producing and recording broadcasts for later. Spotify thinks in "sessions," moving users through its product for the 20 or 30 minutes they spend with their headphones in. Soderstrom said Spotify has been predicting a revolution in audio technology. "We think audio is going to just start evolving like crazy again," he said, "because it's now just software."
Locker Room's job will be to figure out how to translate the sports fan experience into a live social audio universe for everyone. Spotify plans to keep it as a standalone app — though it will get new branding and a relaunch in the coming months — but its purview will have to change quickly. "The beautiful thing about sports as a vertical is that expertise in this community is much more diffuse, and much easier to come by than it is for any other community," Akumiah said. He and Locker Room will quickly be asked to tap into the same community of music fans, and many others besides.
If the two sides can figure each other out, though, they'll give creators another powerful audio tool in Spotify's formidable arsenal. And they'll move Spotify even closer to being the only app anyone needs to launch when they put on their headphones.
