Dive Brief:
- Amazon signaled its ambitions to expand into podcasting with its planned acquisition of Wondery, a startup whose programming includes true-crime shows like "Dr. Death," "Dirty John" and "The Shrink Next Door." The e-commerce giant plans to add Wondery's podcasts to Amazon Music, its streaming audio platform, per an announcement.
- Amazon will continue to provide access to Wondery's free podcasts on a variety of platforms. After adding podcasts to Amazon Music in September, the company plans to work with Wondery to expand its programming by bringing creators, hosts and immersive experiences to more listeners worldwide.
- The planned acquisition of Wondery comes as streaming audio services and radio broadcasters seek to expand their audiences on mobile devices and smart speakers. Amazon and Wondery didn't disclose the terms of the acquisition, though a person familiar with the matter said the deal valued the podcast startup at about $300 million, The Wall Street Journal reported.
Dive Insight:
Amazon is joining the land grab for podcast startups by buying Wondery as the audience for on-demand talk programming continues to swell. Amazon has a fast-growing advertising business, and the addition of Wondery to Amazon Music promises to give marketers another way to reach audiences through its various platforms that include ad placements on its e-commerce site, Twitch livestreaming network, IMDb video on-demand service and Fire TV devices. Because Amazon also is the market leader in smart speakers, the addition of Wondery programming to its podcast lineup can help advertisers to reach those listeners.
"With the recent acquisition of Wondery, it will be interesting to see how Amazon will fare in an already crowded space as Spotify, Apple, iHeartMedia and SiriusXM have all bet heavily on podcasting over the past year," Sean King, executive vice president of Veritone One, said in emailed comments. "This deal shows Amazon is taking strides to expand their music and audio services, but how they roll out new programming, subscriber bundles and ad products will be the key to their success."
The reported deal value of about $300 million nearly rivals the size of Sirius XM's $325 million purchase of Scripps' Stitcher podcasting unit in 2020, and is bigger than Spotify's podcast-related acquisitions. Spotify's purchases include The Ringer, a network focused on sports and culture programming, for as much as $196 million and podcast producer Gimlet Media for a reported $230 million.
However, Spotify's total investments in podcasting and licensing deals for programming are greater than those of rivals. In addition to buying podcast production platform Anchor and narrative-focused podcast studio Parcast, Spotify also agreed to carry Joe Rogan's podcast in a deal valued at $100 million in May 2020, and signed multiyear partnerships with Riot Games, Warner Bros. and DC to produce podcast content.
Meanwhile, more traditional media companies also have boosted their investments in podcasting to extend their audience reach. The New York Times bought the producer of the popular "Serial" program for $25 million last summer, while iHeartMedia, the biggest owner of radio stations in the U.S., in October announced plans to buy audio tech company Voxnest to expand its podcast operations. Radio station owner Entercom acquired podcast companies Cadence13 and Pineapple Street Media in 2019.
Investment in the space comes as 49% of podcast listeners say audio advertising is the best way to reach them, up from 37% of listeners who said the same in 2019, according to a "Super Listeners" survey. The research supports a September report from market research firm Claritas, which found that podcasts can lift brand awareness between 24% to 79%, a significantly higher lift rate than other media channels such as digital display, print and linear TV.
