• Market Crumbs

Money Pours Into Podcasts

Image via Jonathan Farber on Unsplash

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 podcastsThe 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.

Leftover Crumbs

  • Merck takes a stab at coronavirus vaccine. Merck announced it will work with nonprofit scientific research organization IAVI to develop a vaccine for COVID-19. Merck said the vaccine candidate will be based off of their Ebola Zaire virus vaccine. "Merck and IAVI are eager to combine our respective strengths to accelerate development of an rVSV vaccine candidate, with the goal of blunting the trajectory of the COVID-19 pandemic," Merck Research Laboratories president Dr. Roger M. Perlmutter said.

  • NYSE floor reopens. The floor at the New York Stock Exchange reopened yesterday after being closed for two months as a result of the coronavirus. As part of the reopening, only about 25% of the traders who were present on the floor before the closure will be permitted to work. All entrants must wear a mask, have their temperature taken and sign a waiver to indemnify the NYSE against lawsuits.

  • OECD GDP takes a hit. The GDP of the 37 countries that make up the Organisation for Economic Co-operation and Development (OECD) fell by 1.8% in the first quarter. The first quarter marked the largest decline in OECD GDP since the height of the financial crisis when GDP for the group fell 2.3% in 2009. The hardest hit countries were the G7 countries of Canada, France, Germany, Italy, Japan, the U.K. and the U.S.

  • Prepare for liftoff. Elon Musk’s SpaceX will launch two American astronauts to the International Space Station today, marking the first time NASA will send humans to space since 2011. The Crew Dragon capsule is scheduled to launch at 4:33 p.m. EDT from NASA’s Kennedy Space Center in Florida. The two astronauts are Doug Hurley and Bob Behnken, while President Donald Trump and Vice President Mike Pence will watch in person.

  • Warner Music prepares for IPO. Warner Music Group, which filed for an IPO in February and promptly delayed the offering, will now go ahead with its IPO on the Nasdaq. Warner Music will offer 70,000,000 shares of its Class A common stock in an expected range of $23.00 to $26.00 per share, valuing the company as high as about $13 billion. The company, which will trade under the ticker "WMG," will be a "controlled company" as a result of Access Industries' majority ownership.