| Good afternoon from Los Angeles, wherever you may be. I'm staging a little rotisserie chicken taste test while watching the Oscars this evening. May the best bird win. As with the Grammys, I put my Oscar bets in the playlist at the bottom. First, the news: Spotify announced this week it is buying The Ringer, the sports and pop culture website run by Bill Simmons. The companies didn't disclose a price, though recent reports suggested The Ringer wanted $200 million. Another report said The Ringer had once talked to AT&T about a deal closer to $100 million. So let's assume it's nine figures. Spotify has now spent more than $500 million buying four podcasting companies. While the Ringer employs dozens of writers and publishes articles, this deal is all about podcasts. Simmons hosts one of the most popular podcasts in the U.S., and his company runs a growing network of shows about movies, TV, music and more. (Disclosure: I've been a guest on one of those shows, "The Watch," a few times.) The conventional wisdom behind Spotify's bet on podcasting is simple to understand once you learn about the economics of music. The streaming audio business is booming. Spotify now has more than 270 million users, about 124 million of whom are paying subscribers. But it can't make any money. Spotify lost tens of millions of dollars in 2019, and is going to lose tens of millions of dollars in 2020. That's because music rights holders collect more than 65% of every dollar Spotify takes in. Spotify has tried to negotiate the rate down, but there is a floor and the music industry won't go below it. Spotify believes podcasting can help it become profitable because of two theses: - Podcast advertising will grow into a giant business, and Spotify will be a leading player.
- Podcasting will one day account for such a large share of overall listening that it will force labels to reduce their share of its subscription revenue.
The key phrase is long term. Podcasting costs Spotify money right now. Spotify is buying companies, and funding original shows. It's investing in new advertising tools, and new tools for podcast creators. But its advertising business is tiny. Spotify reported advertising sales of about $740 million this past year, or about 10% of Spotify's overall revenue. Podcasting advertising as an industry has yet to eclipse $1 billion in the U.S. Here's the podcasting ad business, per the Interactive Advertising Bureau:  The podcast advertising business is growing quickly, and Spotify is investing in new technology to accelerate it. If that works, it will become a big deal. But, for the foreseeable future, Spotify is a subscription business. The economics of that subscription business aren't changing any time soon either. The way it works now, record labels collect a share of every Spotify subscribers' fee. Even if an individual subscriber only listens to podcasts, their money is still going to music companies. While Spotify has broached the idea of creating a separate pool of money for podcasting, music companies have not been receptive. Spotify is their golden goose. Multiple Spotify sources have told me the company knows it won't get to carve podcasts out of the subscription pie in the current round of label deals. That will have to wait until the next one. Again, long term. What's happening now: podcast listenership on Spotify is booming, and Spotify is eclipsing Apple in several markets outside the U.S. Does Spotify need to own Bill Simmons and Gimlet Media and Parcast to make its podcasting business work? To be less of a platform and more of a Netflix-style studio? Daniel Ek believes so. He's been right about a lot of things. We'll find out if he's right about this one in a few years. – Lucas Shaw Disney is kind of a big deal  "The Mandalorian" Source: Disney The world's largest entertainment company said its Disney+ streaming service signed up 26.5 million customers in the final quarter of 2019, and has added another couple million customers so far this year. ESPN+ blossomed in 2019, and surpassed 7 million customers in 2020. Hulu eclipsed 30 million, as we said they did. All told, Disney now owns the third and fourth largest streaming services in the U.S. after Netflix and Amazon, and Disney+ became one of the big four in just a couple months. No matter how you slice it, that's incredible. And for all the talk about how Disney+ would kill Netflix, Wall Street doesn't seem too concerned. Netflix stock is up 13% so far this year, outperforming Disney and the market. We finally know how big YouTube is  The world's largest video site generated $15 billion in advertising sales last year. That number is a little misleading since it includes the money that it gives to its channels. The typical YouTube split is 55% to the partner and 45% to YouTube, so YouTube took home closer to $6 billion or $7 billion. Still, YouTube grossed more than CBS or Fox made last year put together. The sum disappointed investors who expected it to be even larger. YouTube makes less per user than Facebook or Twitter. It also makes less than Instagram, as Sarah Frier and Kurt Wagner scooped. Cardi B Heads to Wall Street  Cardi B performs in Las Vegas. Photographer: Ethan Miller/Getty Images Warner Music Group, the music company of Cardi B and Ed Sheeran, filed for an initial public offering. While the other two major music companies are subsidiaries of large public companies (Vivendi SA owns Universal and Sony Corp. owns Sony), Warner is owned by Ukranian-American billionaire Len Blavatnik. Blavatnik acquired Warner in 2011 for $1.3 billion ($3.3 billion including debt) when the music business was in a steep decline. Industry sales have climbed five years in a row from a nadir of about $14 billion to more than $19 billion. Warner is worth at least twice what it was in 2011, and likely a lot more. Now Blavatnik gets to cash in some chips, reward top employees and raise money for acquisitions – all without giving up control. Hollywood's diversity challenge Both UCLA and USC released reports on the state of diversity and inclusion in Hollywood this week, hoping to use the Oscars to spark conversation about the industry's enduring whiteness and maleness. The latest numbers have good news and bad news: - A record number of the top 100 movies last year have female leads, and leads from underrepresented racial and ethnic groups.
 - Those groups' share of lead roles still falls well short of their share of the U.S. population.
The No. 1 movie in the world is "Birds of Prey." The comic book movie starring Margot Robbie as Harley Quinn grossed $33 million in North America this weekend and $81 million worldwide. Reviews are mixed, and those numbers are seen as a disappointment. The No. 1 song and album in the U.S. belong to Roddy Ricch. Five stories you may have missed - Film is back. Eastman Kodak's sales in Hollywood have climbed five years in a row, and four of the nine films nominated for best picture at Sunday's Academy Awards were shot on Kodak film: "Once Upon a Time...in Hollywood," "Little Women," "The Irishman" and "Marriage Story."
- ViacomCBS is planning a new streaming service – kind of. The media giant will announce plans to fold together CBS All Access, Pluto TV and Showtime into a multi-tiered service, one that will also include programming from old Viacom networks like MTV and Nickelodeon.
- The WWE's streaming service is for sale. The company's stock had dropped more than 30 percent since it warned its earnings would come in below street forecasts. (They did.)
- HBO Max is paying the cast of "Friends" between $12 million and $15 million to appear in a reunion show (aka a talk show). Wild.
- China's anti-trust authorities suspended their investigation of Tencent, the dominant music streaming company in the country. Tencent has the exclusive rights to represent music from the three major music companies in China, and its rivals say it has used those deals to damage them.
Weekly playlist Thank you to NPR's "All Songs Considered" for introducing me to Tre Burt, a folk singer from the Bay Area. I am borrowing from my Grammy week with my Oscar preferences (not predictions). Best picture: "Parasite" Best director: Not Todd Phillips Best actor: Antonio Banderas, "Pain and Glory" Best actress: Saoirse Ronan, "Little Women" Best supporting actor: Brad Pitt," Once Upon a Time ... In Hollywood" Best supporting actress: Laura Dern,"Marriage Story" Best cinematography: Roger Deakins, "1917" Best original screenplay: Bong Joon-Ho and Han Jin Wan, "Parasite" Best adapted screenplay: Greta Gerwig, "Little Women" | 
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