Driving the news: Spotify’s Megaphone deal comes on the heels of an investment spree by its rivals.
- iHeartMedia on Friday said it would acquire the rest of Voxnest, a podcast monetization company. (It owned a minority stake in Voxnest prior to the deal.) On Monday, it announced a partnership with audio production company Pushkin to be its exclusive sales partner for many of its most popular podcasts. (Full disclosure: Axios partners with Pushkin to produce its Axios Today podcast, and also works with Megaphone.)
- SiriusXM’s $325 million acquisition of Stitcher closed last month. The deal gave it access to Midroll, a podcast ad company that Stitcher bought in 2015. This summer, the radio giant acquired Simplecast, a podcast management platform that helps podcasters publish, manage and measure their content. It already owns podcast ad company AdsWizz, which it acquired through its purchase of Pandora in 2018.
- Apple earlier this year reportedly acquired Scout FM, a startup that creates radio-like stations for podcasts. While Apple has long been the king of hosting podcasts, it hasn’t invested as much in podcast monetization through ads.
It sounds like Corporate America is consolidating podcast “networks” the same way that they did print, broadcast, cable, and internet… and ruined them.
The big picture: For now, podcasting is a small but growing advertising medium. The industry as a whole still only brings in less than $1 billion in ad revenue, even though more than 90 million people listen to podcasts monthly, per Edison Research.
All of the acquired companies, as far as I can tell, are advertisers. As these podcasting networks become valuable, expect some Big Media Conglomerate to purchase them and expect them to turn a greater profit. Those networks might put more pressure on the podcasters themselves to take-on advertising or be charged more for serving them to listeners. Not all podcasts will be able to scale to be profitable (or profitable enough). This will be a big shake-out, if Axios is right.
This is a small, Big Story to watch.