I’m a great believer in the saying ‘follow the money’ because that is where you find the truth.
Podcasting is no exception and this year, there has been some very big money to follow. Some of the world’s biggest brands and their CEO’s are positioning themselves with some astonishing deals.
Spotify lead the headlines by buying the worlds #1 podcast ‘The Joe Rogan Experience’ for $100m. That’s after they paid $340m to acquire Gimlet Media who create documentary type podcasts and Anchor, a simple online podcast creator service for $100m. Throw in $196m for the Ringer sport podcast network and $55m for Paracast who create audio drama. I think its safe to say Spotify have big plans for podcasting.
Why?
Podcasts don’t have royalty costs like music. Podcasts can contain advertising. Podcasts are popular. The bottom line is they can dramatically reduce costs while ramping up income. They estimate their $500m+ investment will repay itself within a year.
Sirius XM, the US satellite radio giant, is also going big on podcasting. They’ve paid $325m for Stitcher who create, distribute and monetise podcasts, $75m for Soundcloud and $28m for podcast host Simplecast.
This year also brings news that Wondery, a podcast network based in LA is up-for-sale. They focus on creating drama and crime podcasts funded by listener subscription to their app. A little side business is pitching the best podcasts to local tv and movie producers. The asking price? $200m
That’s well over $1 billion dollars investment.
It’s also interesting to see board level statements from global brands and their intentions.
New York Times CEO Meredith Kopit Levien
The Daily podcast from the newspaper has been a huge success with Levien telling a Goldman Sachs investors conference that downloads have doubled in the last year to 4m.
She said many listeners are new people having a daily habit with The Times. They tend to be younger than traditional readers in print or even in digital. They’re much more likely to be female, the vast majority of the audience is under 40, and in many cases listen the whole way through. Unsurprisingly Levien told investors to expect podcasting to play a bigger part of the newspaper company’s future.
Earlier this year the paper bought Audm, a company that produces read-aloud versions of long-form journalism, and has since launched The Sunday Read as a collection of read aloud articles.
Liberty Global Sirrus XM CEO – Jennifer Witz
Witz says the US satellite broadcasting giant sees tremendous opportunities ahead as they strengthen their position in the podcasting space. Sirrus XM have put their money where their mouth is with a headline $325m deal to buy Stitcher plus millions more on podcast content management platforms, audience analytics, advertising insertion and audio tools.
PepsiCo CEO Ramon Laguarta
The company spent $3b on advertising last year and responded to Covid 19 by taking more of its advertising and marketing in-house. Laguarta told investors on an earnings call that the move was a good one. He said “One, it improves our speed; and number two, it has proven to be more efficient over time so, we can actually get the same or more value for less money, which is obviously a terrific outcome for the company.”
WPP (Former CEO)– Martin Sorrell
Since leaving the advertising giant in 2018, Sorrell now runs S4 Capital focusing on the digital holy trinity of digital advertising: content, programmatic ad delivery and first-party data. Sorrell told a recent conference he considers podcasting important but not mainstream just yet. “It’s another good way for our clients to engage consumers. It’s a bit like influencer marketing in terms of content.”
LUMA Partners CEO – Terry Kawaja
Investment banker Kawaja follows the money and says recent massive investment is a familiar pattern which begins with an innovation that takes place followed by rapid growth by consumers He said coronavirus has made investment bankers more cautious but streaming media like podcasting, along with ecommerce and gaming, is one of the pandemic’s winners. He said those three business segments have experienced six years-worth of growth and disruption in the past six months.
The attitudes and big buys from global brands are pushing podcasting further forward into everyday usage. It won’t be long before podcasts are the Netflix of audio. The great thing is that it is so accessible. It’s completely feasible to create your own podcast and ride on the coat-tails of the ‘big boys’.
It’s a big world with plenty of room for everyone.