In late December, Amazon announced its newest acquisition, purchased for $300 million the podcasting company Wondery is the latest addition. This move comes just months after Amazon music launched their own podcasting endeavour along with their highly successful audiobook service, ‘Audible’.
This move from Amazon is in a bid to snap up a slice of listeners in the ever-growing audio market. Currently, 67% of podcasting audiences are made up of 18-44-year-olds, a percentage that is only set to grow. With over 104 million listeners in America alone, it seems Amazon is not the only company to be investing in the future of audio. Spotify has signed an exclusive contract with Prince Harry and Meghan Markle along with acquiring ‘The Joe Rogan Experience’ for over $100 million. Apple, the largest podcasting market shareholder , has exclusive rights over Oprah Winfrey’s newest podcast. A marketing lure to encourage more iPhone users onto their pre-downloaded software.
This universal grab to acquire smaller podcasting companies comes just as the annual market advertisement revenue exceeded $1.3billion. This revenue is set to keep growing as traditional radio advertising begins to decline from $12billion annually. Podcasting main source of revenue is through advertising; hence, the more podcast creators Spotify, Amazon and Apple acquire the more willing companies are to block-buy advertising spaces.
Podcasting offers companies a medium in which to expand their business. For example, the average commute to work is around an hour, roughly the same length as a podcast. Around 78% of listeners admit to streaming a podcast on their commute to work. With this in mind news outlets such as The Guardian and The Telegraph have realised the potential condensed news podcasts released every day will have, helping evolve traditional forms of content consumption.
Unlike music creators, podcast streaming services own the content creators produce. For companies such as Spotify, this is a huge chance to grow their company without incurring greater costs to record labels. Podcast artists do not seem too concerned about exclusive contracts with companies such as Apple, this is very much a way to lure consumers into paying subscription services to have access to exclusive podcasts and celebrity shows.
It is clear that the battle for consumer’s ears will continue further into 2021 with The Economist dubbing this time as ‘the battle to become the Netflix of audio’. Spotify’s share price doubled when their decision to move into podcasting occurred. Amazon are hoping that to recreate similar effects with their acquisition of Wondery, which provides this multifaceted company with fresh creator content and over 8 million new listeners. Amazon is well equipped to make quite the stir in the podcast market with their readily available and successful Audible app. This year may provide a great explosion of new content for consumers to enjoy as each company battles it out to win a bigger share of listener’s ears.