The podcast market has grown rapidly in the past few years. The industry is quickly evolving; new revenue models emerge as companies find innovative ways to incorporate podcasts in their own business. As the medium grows in popularity, new actors enter and change the competitive landscape.
The growing popularity of podcasts is illustrated by the increase in reach. During the third quarter of 2019, daily reach of podcasts amounted to close to 20% in Sweden, corresponding to a strong increase year-on-year (20%). Spotify, one of the major actors in this industry and certainly so in the Nordics, reports that podcast listening has doubled on their platform, from Q1 to Q2 of 2019. Aligning with the increased consumption of podcasts, ad revenues have also grown substantially – the US market experienced a growth of 353% between 2015 and 2018, according to PWC. The Nordics is still awaiting ad figures, however, Mediavision will shortly release a consumer and market analysis for the podcast industry in our part of the world.
Mergers and Acquisitions
Further proof of the podcast market’s attractiveness is the large number of recent acquisitions. One example is Spotify´s acquisition of the American podcast production companies Anchor and Gimlet Media, a deal worth 300 million USD. The large investments disclose a belief of continued growth for the market, especially as affluent actors – with potentially global reach – enters the market. For example, Apple´s prospective subscription service is considered a threat, especially since the company already possesses one of the most commonly used platforms for podcast listening.
However, acquisitions are not limited to production companies. Several of the more popular podcasts have entered agreements of exclusive distribution. For example, Spotify recently secured the exclusive distribution rights of popular Swedish podcasts “Gynning & Berg” and “Della Q”. The latter was awarded “Newcomer of the Year” at this year´s edition of Guldörat, the Swedish radio- and podcast awards.
Innovative Business Models
The industry has also seen new business models emerge. Subscription services become more common, as they tie popular podcasts to their services. In August, the Danish podcast service Talk Town was launched by Egmont. Additionally, the Danish market saw the launch of Podimo in September, entering the market with a substantial capital of 45 million DKK. Investors included the German tech-fund E. Ventures and the Danish tech-fund Hertcore. Apart from Spotify, no major subscription service has yet been launched on the Swedish market. Worth a notice though, is that all podcasts on Spotify are made available for everyone – regardless of pay or non-pay.
Other markets are also eager to profit from the popularity of podcasts by incorporating them into their business models. For example, traditional media such as newspapers are today offering podcasts as part of their content production, including for example Danish newspapers, Politiken, Jysk Fynske Medier and Zetland, Norwegian Verdens Gang and Swedish newspapers Dagens Nyheter and Göteborgs Posten.
Podcasts also offer an opportunity for providers to elevate other forms of content. A recent development in the Nordic market is podcasts related to TV shows. These are either hosted by fans or a third party, establishing a community around the show or simply profiting on the popularity of the program. Lately, production companies have begun to distribute their own podcasts as well. These are referred to as companion podcasts and examples include HBO´s Chernobyl and the first Nordic companion podcast, NENT´s Heder. According to NENT, companion podcasts allow them to create a valuable ecosystem around their formats.
The podcast market is clearly in a very interesting phase. The behavior of consumers as well as content producers and owners are transforming quickly. Mediavision follow this development closely.
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