Podcasts have their roots dating back to the 80s but gained a wider notoriety in the early 2000 with the advent of the internet and portable digital audio available on devices such as iPod, media players, and laptops. Still, podcasts’ attractivity remained limited due to slow Internet speed and relatively low storage capacity of devices. More recently, with the launch of smartphones and the digital revolution underway, podcast’s status has risen from niche media to mainstream adoption.
In today’s world, podcasts are an incredible opportunity for companies to achieve a deeper level of interaction with their audience and reach out to new potential customers. Supported by growth in podcast demand, especially among younger consumers, the market has experienced tremendous growth in both consumption and content production over the last years: In 2018, advertising on podcasts generated $402M in revenues, while in 2021 revenues could potentially surpass $1B annually, according to PwC.
Not surprisingly, Spotify, the second largest music streaming platform with more than 320 million monthly active users, spent more than $900 million, over the last few years, in acquisitions: In late 2019 Spotify acquired Anchor, a platform providing podcasters with the ability to upload, edit, and distribute their podcasts, increasing content volume by 75%. Recently, Spotify acquired podcast advertising company Megaphone to monetize from advertising: through Megaphone, companies can insert branded advertising into messages, based on audience characteristics such as gender, age, and interests.
Apple continues to be the leader in the podcast market, holding 32.3% of podcast market share globally, compared with 25.5% of Spotify. Recently, the company announced to be working on a new subscription service to create new original content. Apple’s current model for podcast distribution is free, but the company now is planning to add a paid subscription service, like an “Apple Podcasts+”, to monetize from the business.
An incredible example of innovation in the podcasts market is Google, with its new Podcasts app. Google is leveraging its expertise in AI and machine learning to provide users with a better listening experience. Google’s AI aims to translate the audio to different languages without the need to translate it into text as an intermediary stage. Today, Google's market share in the podcast market is 2.6%.
According to a report published by Research & Market, the global podcast industry is expected to reach $41.8B by 2026. In today’s digital world, podcasts are a sophisticated tool providing companies with new stream of revenues such as advertising, subscriptions, events, and sponsorships. As streaming advertising becomes more prominent, and competition in the market dramatically increases, the podcast opportunity is becoming too big to ignore.
The information in this article should not be regarded as a description of services provided by Delian Partners SA. The opinions expressed in this article are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product. It is only intended to provide education about the financial industry. The views reflected in this article are subject to change at any time without notice.
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