But, this takes a lot of time if a single operation requires multiple API calls from different microservices internally. Exactly the way, we interact with websites is when we put an address in the address bar like “ After DNS resolution, we are returned an IP address that we can use to call the required API.Ĥ. One way to interact can be to interact using the DNS address of the service. Now, how do these microservices interact with each other?ģ. Each of these microservice can be deployed on a different machine or even two microservices on the same machine. These microservices are for different purposes. Spotify’s architecture is built on a lot of different microservices. Let’s see what happened and what concepts we can learn from this outage.ġ. But the payoff isn't intended to be immediate this is a long game for Spotify.On March 8, 2022, Spotify faced an outage and Spotify went down for 2 hours. In the first quarter, ad-supported gross margin, which includes podcast content costs, was just 4.4%. As I use the app today, there's a lot of open advertising inventory, and the revenue in podcasting clearly isn't going to be enough to generate much margin in 2021. Right now, Spotify's investment in podcasts doesn't seem to be paying off quickly. This monetization platform made Google a juggernaut online, and Spotify is trying to do the same with the audio format.
There was no longer a need to reach out to advertisers to sponsor banner ads - Google did all the work for website owners and generated more money than direct sponsorships could. Think about this as similar to the way that Google made it easy to generate revenue on websites with inserted ads in the 2000s. If the ad strategy works well, it could mean Spotify can generate higher revenue per podcast for creators than creators could generate on their own. Not only does Spotify have the ability to insert streaming advertisements in audio form, but it also can show display ads as podcasts are playing and is growing its video service as well. Spotify has built a dynamic advertising platform to insert streaming ads based on user demographics, similar to how Google or Facebook do it, which could be very lucrative. The bet is that eventually Spotify will be able to build out an ad network that will justify high price tags.Ī higher-revenue ad network wouldn't just be good for Spotify exclusives, it'll also help attract lesser-known podcasts to the network looking for a way to monetize their content. Powerful podcasters are getting big exclusive deals from Spotify, but the company is paying big up front for content that isn't profitable yet.
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