Money Pours Into Podcasts
Podcast is defined as a program (as of music or talk) made available in digital format for automatic download over the Internet.
The growth in podcasts has been remarkable. According to The Infinite Dial 2020 by Edison Research, 37% of people in the U.S. listened to a podcast in the last month compared to 32% last year. Furthermore, 24% of people listened to a podcast in the last week compared to just 12% last year.
Edison Research estimates 55% of the U.S. population has listened to a podcast at least once. The total has increased every year since 2006 except from 2012 to 2013. In 2006, it was estimated that only 11% of the U.S. population had ever listened to a podcast, while the figure was just 33% in 2015.
With podcasts becoming one of the most popular media formats, companies are rushing to the space and spending big bucks to capitalize on its growth.
Spotify has been the most aggressive company in the podcast space, showing it isn't shy about opening its wallet to acquire podcasts. Last year, Spotify spent about $400 million acquiring podcast companies Gimlet Media, Anchor and Parcast.
Spotify continued its aggressive push into podcasts this year, announcing in February it acquired podcast and media company The Ringer for a reported $196 million. Last week, Spotify announced one of the most popular podcasts—The Joe Rogan Experience, would become a Spotify exclusive in a multi-year exclusive licensing deal.
The news sent Spotify shares soaring, adding more than $6 billion to the company's market capitalization in just a few sessions following the news.
Spotify CEO Daniel Ek believes podcasts are an important part of the company's business involving all things audio.
"The format is really evolving and while podcasting is still a relatively small business today, I see incredible growth potential for the space and for Spotify in particular," Ek said last year. "These acquisitions will meaningfully accelerate our path to becoming the world’s leading audio platform, give users around the world access to the best podcast content, and improve the quality of our listening experience while enhancing the Spotify brand."
The focus on podcasts isn't just at Spotify. Apple is reportedly looking to double its investments in the space, while Amazon is reportedly looking for investments in localized podcast content, such as news and sports.
With podcasts showing exceptional growth in recent years, these companies are spending a lot of money betting it will continue in the years to come.
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