calling it the second golden age of audio.
once viewed as a niche industry that catered to public
radio fans, got a major boost this month when Swedish
streaming giant Spotify agreed to pay around $230
million for Gimlet Media, the New York producer of such
audio dramas as “Homecoming” and the documentary
— the largest to date — comes during a period of
rapid growth in podcasting and could transform the
industry in much the same way that Netflix changed
television, analysts and executives said. Spotify’s
venture into the business is expected to bolster the
value of podcast firms, generate higher licensing fees
for producers, and potentially create a more
consumer-friendly model built around subscriptions
rather than advertising revenue.
sends a signal that podcasting’s time has come in a
big way,” said Kelli Richards, chief executive of All
Access Group, a digital music and entertainment
consultancy. “You are going to see a frenzy of more
podcasters entering the system.”
will probably prompt a wave of consolidations in a
crowded market that already boasts more than 550,000
podcasts worldwide on Apple’s Podcasts app, one of the
most popular ways to discover programs. Newer podcasts
will need to work harder to get discovered, said Oren
Rosenbaum, head of emerging platforms at United Talent
Agency. The agency represents more than 50 podcast
creators or companies. “It is getting tougher and more
challenging,” Rosenbaum said.
laid off members of its podcast team, while other
companies, such as San Antonio-based IHeartMedia Inc.
have expanded their footprint, purchasing Atlanta-based
Stuff Media, one of the nation’s largest podcast
publishers, for $55 million last year.
are expected to take in $514.5 million in ad dollars
this year, up 28 percent from 2018, according to
Interactive Advertising Bureau and PwC. That boost has
helped fuel Southern California podcast firms such as
Beverly Hills-based PodcastOne, which will take in about
$40 million in revenue this year, up 25 percent from
2018, said Executive Chairman Norm Pattiz.
listen to podcasts from start to finish,” Pattiz said.
“If they can’t do it in one sitting, they hit the
pause button. They can consume it whenever and wherever
year, about 73 million Americans tuned in to podcasts
each month, with many concentrated in metropolitan areas
such as New York and Los Angeles, according to Edison
Research and podcast analytics firm Podtrac.
the growth has been fueled by celebrities such as Remi
Cruz and Alisha Marie, who last year launched an
L.A.-based podcast about their lives called “Pretty
Basic,” in which they discuss such topics as dating
podcast has helped them gain new fans beyond YouTube,
generating more than 5 million downloads. It’s
produced by Ramble, a joint venture of New York-based
podcast company Cadence13 and United Talent Agency.
feels very intimate,” said the 24-year-old Cruz. Fans
have tweeted saying they felt as if they “were in the
room with us,” she said.
California hosts more than two dozen podcasting firms.
Popular shows recorded locally include “The Dream,”
an investigative series on multilevel marketing
companies; “Pod Save America,” which features
political commentary by aides of former President Obama;
and “The Ron Burgundy Podcast” on iHeartRadio, in
which comedian Will Ferrell voices his character from
the “Anchorman” movies. Hollywood screenwriters can
learn about their craft on the weekly podcast
Scriptnotes. There’s even an agency for podcasters
called Pod People, an L.A.-based firm that launched last
year and has more than 330 clients.
going to see a huge jump in 2019” in awareness and
audience, said Pod People founder Rachael King.
“It’s a combination of technology getting better and
bigger players getting into the game.”
took off in 2005, when Apple made more than 3,000
podcasts available for free on iTunes. Digital audio
files became even more widespread seven years later when
Apple launched its Podcasts app.
took notice in 2014 after the success of “Serial,” a
popular podcast that investigates whether convicted
murderer Adnan Syed really killed his high school
ex-girlfriend. Venture capital firms poured money into
start-ups, including Gimlet Media and West
Hollywood-based Wondery, that created narrative programs
similar to “Serial” that could be licensed for TV
podcasts have been an inexpensive way to test stories
for possible TV shows or movies.
is a lot more hunger for stuff that has been proven than
for stuff that’s just pitched,” said producer Marc
Zac Stuart-Pontier launched the documentary series
“Crimetown” as a podcast through Gimlet. It cost
$500,000 for 18 episodes, a fraction of a TV budget, and
had 16 million downloads in its first season. FX is now
turning the podcast into a cable TV series.
is a large appetite from television producers for
underlying (intellectual property) that comes with a
built-in audience,” said Wondery CEO Hernan Lopez.
“Books and comic books have been the main sources of
IP to be optioned, but podcasts are becoming an
increasingly popular form of IP.”
has several nonfiction narrative programs, including
popular true crime story “Dirty John” with the L.A.
Times and medical investigation “Dr. Death.”
“Dirty John” became a hit show on Bravo; Universal
Cable Productions is developing a TV series based on
declined to disclose financials but said Wondery’s
revenues nearly doubled last year. The company recently
expanded its West Hollywood offices and expects to grow
to 40 employees this year, up from 30, he said.
the industry’s growth, making money in podcasting has
been a challenge, in part because of a heavy reliance on
advertising. Often podcasts must have at least 10,000
downloads per episode to even quality for ads — a tall
order for small firms.
Spotify — with its 96 million subscribers — could
help matters by making a subscription model for
podcasting more popular, as the company attempts to
build a robust audio platform that goes beyond streaming
subscription model is a better consumer experience than
having an advertising business,” said Michael
Montgomery, a lecturer at UCLA Anderson School of
Management. “Netflix has shown that in spades.”
streamer, which charges $9.99 a month for a premium
account, plans to spend as much as $500 million this
year buying podcast companies (including about $340
million to buy Gimlet Media and New York podcast company
Anchor FM Inc.) Already, Spotify has more than 185,000
podcast titles, including 14 exclusives in the fourth
have the opportunity to make original content the way
Netflix does and to utilize the catalog of content we
have in the platform to help bring people to the podcast
space,” said Dawn Ostroff, Spotify’s chief content
officer, in an interview.
Pandora also is heavily investing in the space, building
technology that will help users recommend podcasts based
on their listening music patterns. The Oakland-based
firm, which is owned by SiriusXM, uses algorithms to
make recommendations on podcasts based on users’ music
listening patterns (Pandora also charges $9.99 for its
learn that about you, we can then serve you content that
you care about,” said Chris Phillips, Pandora’s
chief product officer.
has snapped up exclusive streaming rights for some
podcasts, including Seasons 2 and 3 of “Serial.”
analysts believe podcasting will continue to evolve
beyond a Netflix-style subscription model. For example,
in China, apps like Ximalaya FM bundle audio programs
allowing users to pay a la carte based on the topic they
are interested in, said Connie Chan, a general partner
at Menlo Park venture firm Andreessen Horowitz.
podcast industry has “a big future ahead of it, if it
can learn to move beyond ads and monthly subscriptions,
because that’s the only way that the creators will
have more incentive to produce deeper, better
content,” Chan said.
podcasters are trying to leverage their popularity by
selling tickets for live events. L.A.-based Crooked
Media’s political commentary program “Pod Save
America” held more than 70 shows across the U.S. and
Europe last year, with tens of thousands people
attending its shows since 2017. “It’s become a great
source of revenue,” said Tommy Vietor, one of the
hosts. He declined to disclose figures.
local entrepreneurs like Jason Smith, CEO of
Burbank-based Starburns Audio, welcome Spotify’s entry
into the business. His 10-person company produces such
shows as “Dumb People Town,” about people doing
opens it up,” Smith said. “It shows that there is
real value in these networks.”