Has the 2020 podcast acquisition boom arrived?

Editor’s note: This article from the micro-channel public number “Silicon rabbit race” (ID: sv_race), of: Lexie, Editor: Lu.

Empty and boredom make podcasting, an ear activity that can be carried out with multiple activities at the same time, a perfect way of entertainment

The past year has been a lonely year for many people. Due to the epidemic and isolation, being alone at home has become the norm in life, and “listening” has become One of the main ways to spend time, and the most promising “ear economy” at present is podcasting. In recent years, the popularity of podcasting has also allowed major companies to deploy in this field.

The day before New Year’s Eve, there was news that Amazon will complete the acquisition of the podcast network startup Wonderery. The specific transaction amount has not been disclosed. However, the Wall Street Journal previously reported on the deal negotiations and revealed that the valuation of Wonderry is about 3 One hundred million U.S. dollars.

The giants lay out podcasts, and the audio melee is looking for breaking points

Wondery was founded in 2016 by former Fox executive Hernan Lopez and is known for its gripping real crime podcast content, including “Doctor Death”, “Dirty John”, “Psychiatrist Next Door”, etc., “Dirty “John” was also adapted into a popular TV series by Netflix. According to data from Podtrac, among the top 20 podcasts downloaded by the entire network in 2019, Wondery accounted for 8 and currently has 20 million unique monthly listeners. Wondery has so far completed a financing of 15 million US dollars. The investors behind it include Advancit Capital, BDMI, Greycroft, Lerer Hippeau, etc.

Dirty John

Amazon just joined the podcasting function in September last year and has launched more than 70,000 shows at the same time. After this acquisition, Wonderry will become a part of Amazon Music, which will allow it to gain some new power in the podcasting war. Since the beginning of this year, major media have also taken frequent actions in podcasting:

In March last year, the New York Times acquired Audm, a Y Combinator graduate who turned long stories into audio content. Its unique feature is that it hires professional voice actors to read these stories to make the audio content more colorful. In July, it acquired Serial Productions, the creator behind “Serial” and “This American Life”, for $25 million to increase its audio content inventory.

Audm

In July last year, SiriusXM, an American satellite broadcaster, announced that it would purchase Stitcher, a podcasting platform from EW Scripps, for US$325 million. It wanted to unite its forces to create a one-stop podcast content monetization platform for podcast creators and advertisers. The ability to recommend new podcasts to users acquires users.

In October last year, iHeartMedia, the nation’s largest radio station and the world’s number one commercial podcasting platform, announced the acquisition of podcast technology company Voxnest. Its podcast data, enterprise content publishing tools, and targeted advertising capabilities allow iHeartMedia to keep its existing content inventory To achieve accelerated mass profitability.

These media want to talk to Spotify, the king of audio streaming media, and they are not idle:

2019 Acquired podcast companies Gimlet Media, Anchor and and Parcast one after another at a price of about 400 million U.S. dollars; in February last year, it was reported that the famous sports commentator B will be acquired.The podcast network The Ringer founded by ill Simmons, according to SEC filings, shows an amount of approximately US$200 million, which has rapidly grown its inventory of sports and popular culture content;

In May of last year, it signed an exclusive agreement with the most famous show “The Joe Rogan Experience” in the podcasting industry, and Spotify will become the only podcast platform to provide this show.

Joe Rogan & Elon Musk

Since last year, Spotify has also reached exclusive podcast agreements with many celebrities such as Kim Kardashian, Michelle Obama, Prince Harry and Princess Meghan.

In the world of podcasting, content is king has always been the unchanging principle of competition. Since the beginning of this year, the frequent acquisitions and transactions have also been trying to focus on exclusive content. The current podcasting world is facing from free enjoyment to paid experiment The transformation of exclusive and precious podcast content will become the main firepower for competition among these companies.

There is no doubt that podcasts are becoming increasingly valuable to media and streaming platforms, and they may become the breaking point of the audio war.

Take Spotify as an example. Although users have been growing in recent years, the growth rate has slowed down. The year-on-year growth rate of subscribers dropped from 73% in 2017 to 28% in the second quarter of 2020. The 57% in 2017 fell to 33% in 2019, and it has not yet been profitable. Podcasting may become its new hope to reverse this situation.

Podcasting is a fixed cost for Spotify. By attracting music-listening users to podcasts, Spotify can obtain the same revenue while reducing the cost of music licensing. At present, the podcast business continues to grow. The number of podcasts on Spotify has doubled in 2020, but it remains to be seen whether it can take on the important task of making money.

In China, long audio has also become a hot word, because the growth of music-based short audio has already appeared on the ceiling. With the penetration rate of online music users among netizens reaching 80%, the demographic dividend of the online music industry It’s disappearing. It’s difficult to achieve sustained growth in profits just by paying for music. Podcasting is a new content that has yet to be developed.Form, with a brand new mission.

Podcasting has been around for 16 years. What have you experienced over the years? Why are major platforms only attracted to the game now?

Podcasting sounds good but not profitable

Podcasts first appeared in 2004. The widespread popularity of smartphones in 2010 gave birth to a series of mobile-based audio playback software such as Stitcher and Overcast. The development of car audio technology has played a powerful role in the popularity of podcasts. Boost.

Smart phones bring podcast growth

At the same time, the emergence of music streaming media such as Pandora and Spotify has made people accustomed to enjoying music anytime and anywhere, and they are willing to contribute to this Free to pay. In order to imitate the music streaming model, podcasts have begun to land on major platforms in recent years, and the number of podcasts and the number of listeners is also rising.

2020 is a critical time. The home life brought about by the epidemic has liberated many people’s time. The emptiness and boredom that follow make podcasting, an ear activity that can be carried out simultaneously with multiple activities, become the perfect entertainment the way. According to data from Grand View Research, the global podcast market was only 9.28 billion U.S. dollars in 2019, while the epidemic grew by 42% from March to April alone, and it is expected to increase by 27.5% in the next 7 years. The compound annual growth rate will reach US$60.5 billion in 2027.

share of ear-podcast all time high

Not only is the audience growth, because podcasts themselves have relatively low thresholds for content and technology, and because content creators have more creative time at home, podcast creators have also achieved production this year. A small peak. According to the data of MyPodcastReviews, usually about 50,000 episodes of podcasts will be produced on the entire network within a month, and in April 2020 this number reached 82,000. In terms of activity, 46.5% of Apple’s podcasts have been updated in the past 3 months, an increase of 40% compared to the activity in 2019.

But the major problem facing podcasts over the years is how to make money?

Advertising revenue is currently the main income channel for podcasts. However, according to a report jointly developed by The Interactive Advertising Bureau and PwC, in 2018, the advertising revenue of podcasts in the United States was approximately US$479 million, which will increase to US$1 billion by 2020. It will reach 1.13 billion US dollars by 2021, and the growth from 2017 to 2018 is 53%, while the growth from 19 to 20 is only 15%. While the growth rate is slowing down, it is not very good compared with other forms of online audio content advertising revenue. Online AM/FM advertising revenue will exceed 2 billion U.S. dollars in 2021, and streaming music services that support advertising will reach it in 2018 2 billion US dollars in advertising revenue. Data from Edison Research shows that podcast listeners account for 40% of online audio listeners, but its contribution to advertising revenue is less than 15%.

One of the main reasons is that compared with other forms of advertising, the audio characteristics of podcast advertising make it difficult to share discount codes and track traffic sources on exclusive websites. The industry has not yet developed precise details. The conversion data report format allows advertisers to know the advertising effectiveness and return on investment with confidence.

But Spotify has already started to take action in this regard. For example, the advertising tool “Spotify Podcast Ads” launched this year will not only use data to provide advice on how to advertise, but also the age, gender, device, and By collecting information such as listening behavior, you can also understand how listeners react to different advertising effects. In November last year, Spotify responded to the podcast advertising technology company Megaph.One’s $235 million acquisition is an effort for this goal.

Spotify podcast ad

People in the industry predict that platforms like Spotify will acquire more and more podcast advertising technology companies in the past two years, and podcast advertising profits will have new breakthroughs.

In addition to advertising, the audience’s subscription revenue is another important part of the puzzle, and paid subscriptions to podcasts have always been very daunting. The main reason is that podcast content is scattered on different software and platforms, and these software and platforms have different user subscription rules, making the matter of charging a lot more complicated.

The Apple Podcast app is currently the most popular podcasting platform, but even it does not have any in-app charging mechanism to support podcasts to make money.

Currently, publishers are also trying different ways. For example, the New York Times’ podcast Caliphate hides exclusive content behind its own paywall for a period of time before giving other free podcast software the right to use it, but this requires the audience to change several. When listening to a content from a place, many people just don’t listen to it because of trouble. Moreover, most publishers do not have their own mobile apps like the New York Times, and have to do extra work for charging.

Currently, the industry has proposed some solutions to this problem, such as including podcast content into the overall paid plan. For example, users of the New York Times and the sports media The Athletic are part of the subscription. On the other hand, just like Netlfix and other video streaming media have their own exclusive rights to play, in the future we will also see more platforms such as Spotify and Luminary have exclusive rights to use podcasts.

Faced with profitability problems, many start-ups want to solve the problem in new ways:

For example, App Annie in the podcasting world-the podcast data analysis software Chartable not only categorizes podcasts by topic and ranks them by popularity, but also launches SmartAds, SmartLinks, SmartPromos and other functions that can track online marketing to a certain extent. The role of downloads and the effectiveness of podcast advertising. Chartable completed in September 2019. This former investorInitialized Capital continued to lead the $2.25 million seed round of funding.

RedCircle was founded in 2018 by Michael Kadin and Jeremy Lermitte, who worked at Uber in the early days of Uber. So far, it has completed $3.5 million in financing. The goal is to help small podcasters quickly increase their followers. The first feature launched is The host can find suitable partners in the podcast library to push each other. As long as both parties agree, the RedCircle platform will automatically insert audio ads without the broadcaster bothering. In August 2019, an automatic advertising platform was also launched. Advertisers can select suitable podcasts for advertising based on podcast types, audience size, audience characteristics, and advertising prices. The ability to operate advertising campaigns accurately and efficiently is the most important thing for brands. Importantly, this will also help podcasts survive and make money better.

There are many people who don’t want to start from the advertising side but are oriented towards the audience. For example, Podhero launched a subscription podcast platform for the current situation where 97.2% of podcasts are not profitable. Users pay a monthly fee of $5.99. , Of which 1 dollar will be allocated to Podhero, and the remaining 4.99 dollars will be allocated proportionally to the podcasts users listen to. Users can adjust the podcasts they want to support and the proportion of rewards at any time. Podhero has so far completed the $4 million investment led by True Ventures Seed financing.

It is said that Supercast, which has a first-class remote team, is another company that focuses on the profitability of the audience. Users can pay for a series of listening “privileges”, including ad-free listening, listening to exclusive content, etc. Supercast has currently completed 2 million US dollars The data at the beginning of last year showed that the revenue in the first quarter could reach 7 digits and successfully doubled the number of subscribers.

Domestic podcast market

The current domestic podcast ecology can be described as a “niche”. According to the iiMedia Consulting Data’s 2019 report, the number of online audio users has continued to increase in the past two years, and will reach 540 million in 2020, accounting for the country’s population. Nearly one-third, but “audio” includes audiobooks, emotional radio stations, paid courses, etc. Podcasts occupy a smaller position among them. Why is the development of podcasts in China so difficult?

First of all, the user’s habit of listening to podcasts is not yet fully mature, and the industry lacks high-quality and explosive content. Created “Thi”s American Life”, “Serial” and other programs have made podcasts popular in the United States with a different history. Most domestic podcasts are UGC-based. Although the content involves the world, most of the creators and listeners are media practitioners and industry insiders. .

This American Life

When podcasts are more mature in the United States, they are facing the problem of profitability. The poor base and low viscosity of domestic podcast listeners make it difficult for advertisers to invest, and the failure to commercialize makes practitioners lose their efforts. power.

At the beginning of 19, the “first audio stock” lychee, which has gone through 7 years of history, was listed on the Nasdaq, with an issue price of $11 per share. Lychee’s mission is to “help people show their voice talent” , Has become the largest online UGC audio community in China, but the business challenges facing Litchi are actually very harsh.

Compared with its rivals, the number of monthly active users in 2020 lags behind Himalaya and Dragonfly fm. Compared with its own, Litchi’s losses in recent years have been expanding. The net loss in the first quarter of 20 years was 48.2 million yuan, which was 3.22 times larger than the net loss of 11.4 million yuan in the same period in 19 years. Compared with the loss of 29 million yuan, it also expanded.

In terms of profitability, unlike Himalaya’s method of using PGC to guide knowledge-based payment, Litchi sticks to the UGC road. Live streaming is the main source of income, while young users and niche content are the mainstream idyllic pastoral business models that cause users to pay. The willingness is low, the form of realization is single, and the road to making money by voice storytelling is not so smooth.

All major Internet platforms have not made great efforts on podcasting, But this situation has changed since last year:

[Quick Hand Kayak]

Kuaishou is testing a new podcast product “Kayak” to “listen to interesting people and talk about the world “As slogan, it gathers many Chinese podcasts and focuses on interest recommendations and precise search functions.

[NetEase Cloud Podcast]

Netease Cloud added podcasts to the bottom menu at the end of last year, added a podcast recording tool to the podcast column, and launched a new podcast channel “Talk and Talk” for podcasters.

[QQ Music Podcast]

QQ Music also followed closely and officially launched the “Podcasting” independent module, including recommendations for selected podcasts, and editorial recommendations for easy understanding of the content.

[Small Universe]

It is the new Chinese podcast product “Little Universe” that QQ Music has just launched last year. It has a very good reputation and is called “the most lightweight, purest and most convenient podcast playback App in China” by netizens.

Different from the domestic mainstream audio platform model, Cosmos pays more attention to satisfying the needs of vertical users of podcasts, adopting the mainstream RSS subscription model of the international podcasting industry. Subscription, discovery and other functions are all aimed at simplicity and efficiency. “My Broadcast”Guests” import existing podcast content from Apple Podcasts and Overcast platforms, such as auditions, user comment excerpts, etc., to help new users start exploring. Users can also follow each other, or comment under the program. Like, usually the comment area is full of lively interactions, and the added social and community attributes make it easier to retain users.

The positioning of the small universe app is “a product that serves podcast listeners and creators.” The development team has no clear plan for the business model. This also represents the current domestic attitude towards the podcast industry to a certain extent, and undoubtedly the potential of podcasting I have indeed seen it. Although capital has not paid much attention to podcasting, and whether podcasting can become a big money-making industry is still unknown, this year’s market will be full of trials, developments and breakthroughs. Perhaps this alone is enough to make us look forward to.

Reference:

  1. Amazon acquires podcast network Wondery (TechCrunch)

  2. Why it’s so hard to scale paid podcast subscriptions (WNIP)

  3. Rewriting the playbook for podcast advertising (Spotify)

  4. More than ten years of podcasting, the gold rush has not been cool (36Kr) 5. When will Chinese podcasts become popular? (Hedgehog Commune)