Founded in 2003, Awal Distributio n is owned by the Kobalt Music G roup and represents more. Free Music Distribution in 2020 - Tips and Best Aggregator Services Music is life, not just to me and you, it applies to everybody. The fans, music producer, boss in the office, the neighbor a few blocks away, and even the old grandma who lives down the street. Spotify has announced a new beta feature that will allow independent artists to upload their music directly to the platform instead of through a label or digital aggregator. The upload feature.
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In June 2015, the service reported 75 million active users, of which 20 million were on a paid plan (that’s over 25%). Recently, their chief revenue officer shared that they were on track to hit the 100 million active user mark before the end of 2015. Consumers have adopted the Swedish service en masse, with Scandinavian countries leading the way, followed by the rest of Europe and now the rest of the world. By allowing people to experience the platform for free through their ad-supported freemium model and over-delivering on user experience, Spotify’s initial growth was largely driven by word of mouth instead of advertising.
Now, having captured the majority of market share in Europe and with the competitor Apple Music entering the scene, Spotify has attracted more venture capital and is beginning paid advertising campaigns to win users in territories such as the USA.
This is interesting for artists and labels alike, as it means that streaming is now getting more exposure than ever.
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Indiefy is a free music distribution service that started in 2017. Indiefy was created knowing the real struggle that artists face daily against music corporations that take really big chunks out of the artist’s revenue, and in many cases they are even needed to sign contracts for many years giving away a percentage out of their rights. Sell your music on Spotify, Apple Music, Google Play, and every major streaming service. Keep 100% of your royalties. Try music distribution for free.
Personally, I’m a fan.
Two years ago I started using Spotify, immediately subscribing to a paid plan after discovering the smooth user experience, nice interface, large catalog of music and ability to stream at 320kbps MP3 quality (yeah, Netherlands mobile networks rock).
Before, I had been an iTunes kind of guy, downloading music and syncing it to my iPhone to listen on the go. It worked, but the process was far from optimal – because of the set-up time of downloading and migrating the files to my phone, in reality, I ended up listening to the same collection of music for extended periods of time.
The switch to Spotify reminded me of my initial migration from Windows to OSX… awkward at first but much more efficient once I got accustomed to the interface.
The new paradigm
I think the popularity of streaming services such as Spotify, Apple Music and even Netflix are symptoms of a new paradigm: accessibility over ownership.
Consumers prefer easy access and a comfortable user experience over actually owning products and services.
After all, why would you purchase CDs if you can stream high-quality music on your desktop or smartphone, with your whole collection being accessible cross-device and have the option to sync for offline listening? It’s simply a better user experience.
Sure, some people still purchase CDs and vinyl because to them nothing beats the experience of having a physical product. Others still purchase CDs or download lossless quality files because the audio quality is better. Both are valid arguments, I get them, however percentage wise this is just a minority of all the music listeners.
Streaming is changing the game and with Spotify being at the forefront, I wanted to dedicate a post to talk about how you can get the most out of it.
Getting your music on Spotify
You can view Spotify as a store similar to iTunes and Beatport, falling in the category of DSPs (digital service providers).
![Aggregators Aggregators](/uploads/1/3/4/1/134167428/736339536.jpg)
To get your music up on the platform, you need to make sure you have all the rights (no unofficial remixes, uncleared sample usage, etc). From there, you will need either a direct distribution deal with Spotify (reserved for large record labels) or a connection with a distributor or aggregator that does.
For those of you unclear about the distinction, an aggregator is a company that provides distribution services to a large user base, supplying the content to multiple digital service providers (DSPs) (iTunes / Spotify / Beatport / Apple Music etc).
Distributors essentially do the same thing, but at a smaller scale (fewer clients with bigger catalogues) and work closer with specific record labels and artists and can assist in facilitating marketing placements on the stores.
In terms of the time it takes for your music to be live on the store, Spotify is one of the quicker DSPs and depending on your distributor’s processes, your music can be up on the store within 1-3 days after delivering the content.
Spotify royalties
There’s been a lot of fuss in respect to Spotify’s royalty payments.
Firstly you will have to understand the difference between the freemium and premium models. The one is free to use and shows ads (display and audio) to users, whereas the premium model is ad-free and requires a monthly fee.
Plays are not treated equal on the platform. Plays of premium users result in a higher payout to rightsholders than those of freemium users.
How it works – roughly – is that Spotify takes all the subscription (premium) and advertising (freemium) revenues over a said period, dividing those monies by the total amount of streams.
Rightsholders are paid out based on those rates and from what I understand these are corrected by the percentage of plays that came from the freemium / premium users (so larger % of streams from paid users = higher royalty rate and vice versa).
Of course, that imposes a problem.
With their tremendous growth, going from 60m active users of which 10m paid in late 2014, to 75m active users of which 20m paid in mid 2015, the growth of free users is larger than paid users, thus diluting the per-stream royalty rate.
The more users Spotify acquires, the lower the per-stream royalty rate, unless the paid-to-free subscription ratio maintains or rises. It’s like inflation.
The rates are also influenced by the country of which the streams originate (because of territorially dependent advertising buys and currency value) as well as the price of paid subscriptions, which may vary because of discount and package deals.
Spotify officially reports their average composite per-stream rate to be between $0,006 and $0,0084.
![Spotify Spotify](/uploads/1/3/4/1/134167428/247762918.jpg)
Our rate with Heroic over 2015 Q3 was approximately $0,00475 per stream, without including any distribution fees. This is the pure rate we received from Spotify via our distributor. For clarity, these are Spotify royalties over the master.
For songwriters it is different. Internationally, parties have decided to consider a stream roughly 75% public performance and 25% mechanical reproduction. Spotify pays these rates on behalf of the label (by withholding it from the master royalties) and allocates it to the PRS’ whom in turn collect for the publishers or songwriters directly.
These rates are much lower, with some songwriters reporting receiving roughly $0,00009 per stream. That’s $90 for 1.000.000 plays.
Nonetheless, Spotify is becoming a significant revenue stream for record labels and performing artists. With Heroic, we’ve seen Spotify’s share of our distribution income shift from 10% to over 55% in the last two and half years.
Pair that up with a decrease in iTunes (Apple is pushing consumers towards their Apple Music streaming service) and Beatport sales (their new streaming service is terrible, the pro.beatport.com store is confusing and SFX stock has plummeted) and you can see how streaming is going to account for the lion’s share of (digital) recording revenues in the coming years.
Playlists
The biggest driver of plays on Spotify are playlists and charts.
These are lists that are curated by both consumers and companies, which list tracks that they enjoy. Spotify’s playlists are cool because when you follow one, you’ll get a notification every time a track is added to that playlist. That’s what drives the plays.
Every user has the ability to create playlists and retitle them, however the ability to customize artwork and add a description is restricted to VIP / verified accounts.
In the past Spotify allowed users to discover playlists of other users via the browse sections of the app, however, these playlists have been removed and only those controlled by Spotify and the major labels are now shown.
Yeah, there’s a monopoly going on there.
Because Spotify’s success hinges on their ability to use the music of the major labels, there have been intense negotiations and the majors have managed to negotiate higher-than-standard royalty rates and control over a share of the advertising space and playlists on the platform.
Most users don’t realize this, but all those popular playlists that don’t carry the Spotify brand are all controlled by the majors: Filtr is owned by Sony Music, Digster by Universal Music Group and Topsify by Warner Music Group.
This control allows them to influence (Spotify) chart positions, plays on their tracks and improve the success rate of their releases beyond Spotify (improving odds on Shazam, general charts, radio and other DSPs).
So you’re wondering: how do I get my music on those playlists?
Great question – with an unfortunately complex answer. Because the biggest playlists are controlled by a few established parties, penetrating the market can be difficult.
Nonetheless, here are your options.
Spotify’s self-controlled playlists:
You’ll either need a contact at Spotify, or more realistically, a deal with a distributor or aggregator that does.
Ask them about how you can file for a ‘priority track request‘ or what is also called a ‘feature placement‘. This constitutes the distributor filling in a form with Spotify where they outline the projected sales figures for the release, as well as the artist’s historical sales figures and a summarized marketing plan.
Spotify then decides whether to place you or not. Success is largely based on the validity of your story; sales numbers, outstanding marketing campaign, proper label backing. It’s important to have both your label and distributor double down if you really want to make this happen.
Record label playlists:
Release with one of the major labels or bigger independents that control their own playlists. Labels such as Spinnin and Armada are doing a great job at playlisting in the electronic realm.
Leading up to your release, ask them about how they will employ their playlists to generate traction with your release. You may even want to ask them to run a Spotify exclusive for 1-2 weeks leading up to the release, if they think it will increase your odds of being included in one of Spotify’s primary playlists via a priority track request.
Independent playlists:
Free Aggregators Spotify Playlists
With Spotify removing independent playlists from the Browse section, tracking the best independent playlists can be a struggle.
Here’s a few methods to find them:
- Search for popular keywords (think Tomorrowland, EDM etc) and filter through the results, filtering out those with the most followers (anything with 5.000+ followers is significant).
- Search Google for lists of the most popular playlists. Like this.
- Or use websites that index Spotify playlists such as Playlists.me and SharedPlaylists.com.
From there, the process is straightforward: trace the account that created the playlist and employ your best internet researching skills to find a way to contact the playlist creator (usually via email, Twitter or Facebook Chat).
Catalog your results in a Google Sheets database. Here’s a template that you can use (copy the tab to a new Sheets document to get started).
Analytics
Similar to other streaming platforms, metrics are important to both see how your releases are performing, as well as to better understand your demographic (where they are based, when they listen etc).
You can view the play counts of tracks on Spotify by hovering over the battery like indicator next to a track.
These metrics are always delayed by 2-3 days though: 10.000 plays on a Monday would be visible on a Wednesday or Thursday.
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In the past, Analytics were accessible for managers and labels via Spotify’s integration with Next Big Sound (a social media data aggregator for artists). Recently however, Spotify announced Fan Insights, for which limited beta applications are being accepted here.
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We’ve recently received access to Spotify’s more extensive Analytics platform and the data is incredibly interesting – all our artists see a massive fall-off of plays on Saturday and Sunday, whereas the more downtempo music peaks in plays on Monday and more club-oriented music performs best on a Friday.
We’re also seeing that the bulk of our Spotify audience is in the United States, followed by the UK, Sweden and Germany. Germans seem to love bass music and trap.
Verified profiles
Beyond the freemium and premium subscription levels, Spotify makes a distinction between traditional user accounts and artist profiles.
When a release is distributed to Spotify, a profile is created for the artist, automatically generating a profile picture based on the release’s artwork.
Initially, these artist profiles are detached from any user accounts, however through requesting verification one can link these together, as well as add an about page with a custom biography, as well as customize the artwork – and receive a shiny blue checkmark (check out the San Holo page as an example).
The linkup between the profile and user account is great, because it’ll merge all the followers of both accounts into one and allow the artist or label to use the personal account as if it were the artist account, sharing all activity in the process.
This creates great opportunities for sharing content within Spotify (by right clicking a release), broadcasting it to all of the account’s followers with a custom message.
Any playlists that are created by the user are now linked and displayed to the artist profile. This is amazing and allows an artist with say 20.000 followers to create a playlist, share it to the followers and kickstart the playlist’s follower growth.
If you’re verified, I highly suggest you to use this trick to your advantage, creating a playlist in which you can include all your releases (titled something like ‘Artist – Official Releases’) and one for your inspirations (‘Artist – Inspirations’). This will be interesting for your fans to follow and allows you to give your releases a little extra push when they come out by including them in those lists.
You can request verification for your account here.
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I hope this article improves your understanding of Spotify and how to excel on the platform. Please let me know what your biggest struggle is on the platform in the comments, or any other questions you might have. I’ve also put together a checklist of ‘best practices’ you can use in order to get the most out of your Spotity profile which you can get below.
Free Aggregators Spotify Account
If you’re interested in other platforms such as SoundCloud you can check out my newest article here on how you can improve your SoundCloud marketing game.
Like this content? Check out the free video series for my new course, the Music Marketing Academy. You can get access here.
Troubleshoot spotify no sound. Credit Spotify CEO Daniel Ek with honesty; in a blog post announcing a major move into the podcast space, Ek wrote:
More than 10 years ago we founded Spotify to give consumers something they couldn’t get — music any time, anywhere, and at the right price. Along the way, we broke the grip piracy had on our industry and restored the growth of global music through paid on-demand streaming. I’m proud of what we’ve accomplished, but what I didn’t know when we launched to consumers in 2008 was that audio — not just music — would be the future of Spotify.
There is a lot packed into this paragraph. First and foremost, Ek is absolutely justified in taking a victory lap: as I noted last month music revenue is growing sharply; over the next few years the industry’s total revenue will likely exceed the peak of the CD era, something that seemed unthinkable a decade ago.
What happened is that Spotify dragged the record labels into a completely new business model that relied on Internet assumptions, instead of fighting them: if duplicating and distributing digital media is free (on a marginal basis), don’t try to make it scarce, but instead make it abundant and charge for the convenience of accessing just about all of it.
The problem for Spotify is that the company’s financial returns are not nearly representative of its impact on the music industry. The company did make its first operating profit of last quarter on revenues of €1.5 billion, but the biggest driver was the fact its operating costs were down 17% due to lower “accrued social costs” in Sweden that resulted from Spotify’s stock price going down. To be fair, Spotify said it would have made a small profit even without that adjustment, but the long-term outlook is tough when the company’s gross profit is, as it was last quarter, only 27%.1
The issue, as I laid out last year in Lessons From Spotify, is that Spotify’s primary cost driver is not, like most tech companies, fixed investments in R&D or Sales & Marketing, but rather marginal payouts to record labels. Basically, the more revenue Spotify makes the more its costs increase, which can be overcome at large enough revenue numbers — see last quarter — but limits the company’s long-term upside.
At least, that is, as long as Spotify was a music company; thus the new declaration from Ek that Spotify is now about audio — the honesty was his admission that he didn’t originally see this coming.
Podcasts Versus Music
The shift in purpose from “music” to “audio” is, for now anyways, about podcasts. And, at least from a user perspective, it is a natural extension: playing music and playing podcasts entail downloading or streaming some sort of digital file, decoding it on a device, and playing it back through some sort of speaker. That one involved melodies and harmonies and the other primarily the spoken word (although there are plenty of music podcasts) is, from a technical perspective, a distinction without meaning.
From a value chain perspective, though, music and podcasts could not be more different:
- Music is primarily controlled by three large labels; podcasts are controlled by individual podcasters
- Music can only be played legally through licensed services or via licensed downloads; podcasts can be played by anyone
- Music generated $8.7 billion in revenue in the U.S. in 2017; podcasts generated only around $300 million in the U.S.
This last point is directly related to the first two: the money that can be made from a value chain is directly related to the degree of friction and centralization in that value chain. Consider Spotify’s two primary business models:
- Subscriptions capture money directly from consumers who, as noted above, are paying for the convenience of accessing all of the music they want (i.e. overcoming friction) in one centralized place.
- Advertisements capture money from advertisers who wish to reach listeners; effectively selling advertising, though, means having one place for advertisers to go to reach a large number of listeners.
This importance of centralization to an advertising business model is best seen by the fact that Spotify drove €542 million ($616 million) in advertising revenue last year, far outpacing all of podcasting, even though half of the company’s users didn’t hear any ads at all. Moreover, the total amount of advertising revenue driven by music is even greater when you add in YouTube.
Podcasts and the Web
The current state of podcast advertising is a situation not so different from the early web: how many people remember this?
These ads were elaborate affiliate marketing schemes; you really could get a free iPod if you signed up for several credit cards, a Netflix account, subscription video courses, you get the idea. What all of these marketers had in common was an anticipation that new customers would have large lifetime values, justifying large payouts to whatever dodgy companies managed to sign them up.
The parallels to podcasting should be obvious: why is Squarespace on seemingly every podcast? Because customers paying monthly for a website have huge lifetime values. Sure, they may only set up the website once, but they are likely to maintain it for a very long time, particularly if they grabbed a “free” domain along the way. This makes the hassle of coordinating ad reads and sponsorship codes across a plethora of podcasts worth the trouble; it’s the same story with other prominent podcast sponsors like ZipRecruiter or SimpliSafe.
The problem is that the affiliated marketing for large lifetime-value purchases segment is not a particularly large one; that meant that the amount of consumer attention paid to the Internet far exceeded the amount of advertising spend. From Mary Meeker’s 2005 Internet Trends report:
It seems very likely that were a similar slide to be made about podcasting it would look very similar: according to Edison Research 73 million people in the U.S. listen to podcasts monthly, and 48 million weekly; the average listener listens to seven podcasts a week. That seems like it should be worth a lot more than $300 million or so!
Ad Centralization
Again, what happened to the web is likely instructive: in 2003 Google launch AdSense, an advertising network for websites. Now advertisers could buy ads in one centralized place, and those ads could be better targeted by one company that spread its cookies across the entire Internet (and, of course, combined them with data from search, email, etc.).
By 2010, five years after the above slide, Meeker had an update:
Internet attention still outpaced monetization, but the gap was significantly closer: yes, the ad formats were still mostly the same, but increased centralization brought far more advertisers on board.
To be sure there have been attempts to centralize podcast advertising as well: a company called Midroll, which was acquired by E.W. Scripps in 2015, is the largest player in the space. Midroll sits between advertisers and mostly larger podcasts like the Bill Simmons Podcast or WTF with Marc Maron, and handles the nitty gritty of coordinating ad reads and distributing discount codes and specialized URLs in exchange for about a third of revenue.
Three years ago Midroll also acquired a podcast player called Stitcher; as I explained at the time there was a lot of value to be gained from controlling both the listening experience and ad sales, particularly in terms of data: with better data Midroll could more easily sell podcast advertising inventory to companies with business models that did not rely on generating outsized lifetime values.
The problem for Midroll, though, is that Stitcher never gained a meaningful share of the market, which meant Midroll never achieved the sort of data necessary to expand the podcast advertising market. Sure, some brand advertisers are dipping their toes in the market, but the leading advertisers are the same sort of companies they have always been, and while users no longer need to punch any monkeys, they do still need to punch in those discount codes and specialized URLs.
Meanwhile Apple, which does have the users thanks to the dominance of the iOS Podcast app,2 has shown little inclination of being that centralized player. I wrote about the company’s opportunities in the space two years ago, but despite the shift in strategy to services nothing has changed.
The Value of Gimlet Media
All of this is critical context for understanding Spotify’s strong interest in the podcasting space. Spotify needs (1) a way to differentiate its service from Apple Music in particular, and (2) content that it does not have to pay for on a marginal cost basis.
Gimlet Media fits the bill in both cases. While the company’s current roster of podcasts will remain freely available, future podcasts will almost certainly be exclusive to Spotify. More importantly, it seems likely that Spotify bought the company not simply for its library but also its management: expect a big jump in output with additional investment.
It’s worth considering why it is exclusivity in podcasts will likely play out differently in podcasts than in music. CEO Daniel Ek said on the company’s earnings call yesterday:
I think these are two very, very different businesses. We’ve spoken in the past about the music industry and not being a space, where exclusivity makes sense for a number of different reasons, but including one of them, that music, radio can put any piece of music up. So exclusivities won’t have the same effect, as you won’t be able to keep it exclusive.
And the second thing obviously is the artists and the label have the incentive to push the content out in many places as possible, because so much of an artist revenue derives from touring. I think in audio and certainly in podcast, the dynamics is very, very different, and what we’re doing here and what we’re excited about is really building the market, it’s at a very, very different stage of maturity. So we’re investing in that and we think we can be one of the tent-pole players in that space.
Basically, the wall that Spotify can put up around podcasts is much stronger than the one it can put up around music, and podcasters have fewer alternatives. Or, to put it another way, podcasts are a market where Spotify — to the extent they are willing to pay — actually has power over supply.
Meanwhile, for Spotify podcasts are fixed costs: that means that driving more listening flows directly to the company’s bottom line in a way that increased music listening does not. This is a very big deal — it is entirely possible that if Spotify succeeds in the space that podcasts will drive a relatively small percentage of revenue and a much larger percentage of profit.
Spotify’s Aggregation Play
At the same time, the Gimlet Media acquisition on its own does not seem like a sustainable strategy: paying three-quarters of the amount generated in annual revenue by an entire industry for 25 or so podcasts does not scale. That, though, is where the Anchor acquisition comes in: Anchor is a service for easily making and distributing podcasts, with a nascent advertising service for monetization.
To put it another way, Anchor is a means of generating supply, and it is supply that has always stood in the way of Spotify’s ambitions to be an Aggregator. Aggregators bring suppliers onto the platform on their terms; Spotify, on the other hand, has had to scratch and claw to get labels to give them the music they needed to be viable. And again, the acquisition of Gimlet Media, while better from a long-term leverage perspective, is not a big improvement: Spotify almost certainly overpaid if the only goal was to obtain supply.
What I think Spotify senses, though, is that while podcasts, at least in theory, solve many of their business model problems, Spotify is also uniquely positioned to solve the problems of many podcasters/suppliers. To wit:
- Increasing advertising revenue for the entire industry requires a centralized player that can leverage a large userbase. Spotify is still a distant second to Apple in podcasts, but they are growing fast. Just as importantly, Spotify already has a strongly growing advertising business — again, larger than the entire podcast market — that it can extend to podcasts.
- The open nature of podcasts means it is very difficult to monetize users directly; Spotify, though, has already built an entire infrastructure around monetizing users directly. Podcasts exclusive to Spotify can likely make meaningful money from Spotify subscribers that still gives Spotify far higher margin than music.
This explains Spotify’s multi-prong approach:
- Anchor provides a way to capture new podcasters, leading them either to Spotify advertising or, in the case of rising stars, to Spotify exclusives. Critically, because Spotify has access to all of the data, they can likely bring those suppliers on board at a far lower rate than they have to pay for established creators like Gimlet Media.
- Spotify Advertising, as I just suggested, makes a strong play to be the dominant provider for the entire podcasting industry. Spotify Advertising is already operating at a far larger scale than Midroll, the incumbent player, and Spotify has access to the data of the second largest podcast player in the market.
- Gimlet Media becomes an umbrella brand for a growing stable of Spotify exclusive podcasts. Critically, as I noted above, the majority of these podcasts come to Spotify not because Spotify pays them millions of dollars but simply because Spotify is better at monetizing than anyone else.
This will be the determinant as to whether or not Spotify’s podcast gambit succeeds: being an Aggregator doesn’t simply mean acquiring a large pool of captive customers, it means controlling the value chain such that suppliers come on to your platform on your terms because you monetize them better than anyone else, even as you capture the excess value.
https://ysikad.weebly.com/spotify-download-hacked-apk.html. To that last point, it’s worth highlighting this comment from Gimlet Media co-founder Matt Lieber to Peter Kafka on the Recode Media podcast:
We did tell [Gimlet Media employees] that based on what we were talking about this would be a great thing for the company because really what everyone here is motivated by is making amazing shows for listeners who crave more, and…being acquired by Spotify puts us with the world’s largest audio platform that’s reaching more than 200 million people globally, so it’s a way for our storytelling and our work to have a lot more impact. So generally people are really excited about it.
This is the Aggregator’s advantage: particularly when it comes to media, whether it be print, video, or audio, suppliers are often motivated to simply reach the most people and make a living doing so. It is a fundamentally short-term outlook that is entirely understandable and defensible. That, though, leaves the Aggregator with an arbitrage advantage: by controlling access to customers and, by extension, the most attractive means of monetization, Aggregators can offer the best relative deal to suppliers that is still, in absolute terms, a great deal for the Aggregator.
To that end, it is worth considering if this is good for the podcasting industry generally. After all, to return to the web analogy, the price of the Internet finally monetizing effectively was the shift of content to centralized platforms like Facebook. Is the web better today than it was when we were punching monkeys?
I do think the answer is yes, but I don’t mind if you disagree: granted, most supply has moved to Facebook and other social networks; it is no longer possible to build a viable web business with display ads. At the same time, the web is still as open as can be, which means there is room for new business models like subscriptions, a model that has only gotten started and is already producing far better content than the old mass market media model ever did (I’m obviously biased in this regard!).
I can see a similar future for podcasts: Spotify, if they are successful, may end up being the biggest player, but that doesn’t mean new and different business models that directly link suppliers and consumers won’t emerge. It will, in other words, look like everything else touched by the Internet: very large winners on one end, and small niche winners on the other.
- This number was slightly inflated due to a one time accounting change [↩]
- iTunes is very important to podcasting, but it is only a directory of podcasts that are hosted elsewhere; that means it is not a means to collect user data [↩]