Winner takes all: How market consolidation is affecting the podcast industry

Can independent podcast platforms survive in the current climate?

As the podcasting industry continues to grow with podcast listeners increasing to almost 400m worldwide as of 2022, according to Demand Sage, large streaming platforms have begun to catch on to the benefits of the audio market. 

The power of podcasting can be compared to the early days of YouTube video-blogging – or vlogging – in 2005 where the appeal was that anyone could have access to the platform and could create unique content that had the potential to go viral. Now, YouTube is the second most popular social media platform with more than 2.5bn users according to Statista.

Podcasting offers a similar platform, accessible for anyone with a great idea and where anyone can create successful content regardless of their resources. Unlike YouTube, which was the de facto platform for vlogging at the height of its popularity, podcasting does not have a singular home. Podcast episodes are typically published via an RSS feed and are then distributed ‘wherever you get your podcasts’. 

This may not be the case for long, however. As a result of its popularity, consolidation of the podcasting market is increasing rapidly as large operators scramble to buy out podcast networks, production studios, and hosting services as they compete to drive listeners towards their platform. Not only that, there is also an increase in hosting more exclusive or subscriber-only content as well as paywalls to increase revenue – all of which run the risk of making podcasts less accessible. 

Everything must go

Matt Deegan, founder and creative director of new media and radio consultancy firm Folder Media, says that large operators are consolidating the podcast market for two reasons: “[to] …make their platform the primary podcast destination and to build a 'must buy' podcast advertising network for the agencies”.

Since 2019, Spotify has acquired podcast networks Gimlet Media, Parcast and The Ringer, as well as securing exclusive rights to host The Joe Rogan Experience on its platform in a $200m deal. More recently, Amazon bought Wondery in 2022 and even unexpected publications like The New York Times have jumped in on the podcast buy-out trend when it acquired Serial Productions as part of its expansion into audio journalism.

In addition to the networks themselves, large operators have also begun investing into back-end tools and hosting providers in the audio market to beef up their technology stacks. This includes Spotify’s acquisition of podcast platform Megaphone in 2020 as well as podcast analytics firms Chartable and Podsights in 2022, iHeartMedia’s acquisition of podcast hosting company Voxnest in 2020, and Amazon Music’s acquisition of podcast hosting and monetisation platform Art19 in 2021. 

It’s indicative of how essential podcasting currently is to many brands and companies’ strategies moving forward and there’s no signs of that slowing down anytime soon. Europe’s largest radio company, Global, also says that it will be investing more into podcasting and pushing to create more of them in-house. 

“Global has invested heavily in purpose-built studios; we have podcasting at the heart of what a lot of our content output is going to be,” said head of podcast sales at Global Sarah Ray. “Global Player is a home of social, video content, audio content, and podcasting is certainly going to be something that is spearheading a lot of that.”

The effects of exclusivity

More podcasts, however, are starting to take note of how exclusivity to a specific platform can have a potential impact on their shows, and their accessibility to a broader audience. At the Podcast Upfronts conference in 2022, hosted by advertising industry trade body the IAB, Marv Abbey spoke about his decision to move his podcast about Black UK culture, Three Shots of Tequila, from an exclusive agreement with Spotify to independent platform Acast. 

He says that when they initially signed with Spotify, they thought it was a great move in terms of proving to people that they were levelling up and getting global campaigns, but in actuality, they found that it decreased their listenership, as the service was not available worldwide. 

“I’m Nigerian and a lot of the listeners we had were in Nigeria,” he said. “I never realised that until we moved to Spotify. I’d be on holiday and people would come up to me and ask what happened to the podcast because they couldn't listen anymore, and that’s because it wasn’t available on Spotify in Africa at the moment.”

“There’s little niche listenerships around that you don’t realise until you move,” he added.

At the same conference, Wondery also announced in its session that the Amazon Original pop culture and entertainment show the +44 Podcastwill no longer be exclusive to Amazon Music for its newest season in November 2022, moving instead to a timed-exclusivity model where listeners on Amazon’s platform will get access before anyone else. The explicit goal of this move, the company said, was to make the show more accessible to listeners, rather than focusing on user acquisition and platform subscriber growth.

“We see an opportunity to build a big ads business, and that ads business is going to be at that scale, not by having everything exclusive on Amazon, but by actually having things continue to be distributed broadly,” Amazon Music VP Steve Boom told The Verge in a podcast interview. 

The risks for independents

Deegan says the reason independent podcast platforms are likely to agree to being bought out is because the offer is too tempting in the current competitive market. He says the challenge for independents is finding ways to fund new shows and keep building their audience when costs are increasing, noting “you can see why taking the money from the big boys is an easy option”. 

“For hard-grafting independents it can mean a well-earned pay-out, and for talent a bonzer pay day,” he says. “However, the jury's still out on whether their acquirers are being nurtured. Big lay-offs at (Spotify-acquired) Gimlet and Parcast because of ‘under-performance’ resulted in many staffers complaining about a lack of marketing investment and [highlighted] the forcing of shows to go Spotify-exclusive as the problem.”

In October 2022, Spotify laid off 38 employees across its Gimlet and Parcast studios after cancelling 11 original shows from the networks. Spotify told the employees that the reason their shows were getting axed was due to low listenership but the Gimlet and Parcast unions said that Spotify contributed to this when it acquired both studios. The streaming platform had invested more budget into exclusive deals with big personalities such as Meghan Markle’s Archetypes and Kim Kardashian’s The System, who already had a massive fanbase which led to high listenership.

“Their decision to make most of Gimlet and Parcast’s shows exclusive caused a steep drop in listeners – as high as three quarters of the audience for some shows,” said both unions in a joint statement. “Yet the company did little or nothing to staunch the bleeding.” 

“Shows languished without marketing support, and teams were not given clear audience goals to meet.”

Future of the podcasting industry

Despite the potential risks posed by consolidation in the podcast market, not everyone sees it as a bad thing, and many still believe that independent podcast platforms and studios can co-exist and thrive alongside these large operators if they know how to work together. 

Chloe Straw, managing director of trade association AudioUK, believes the growth of the podcast industry is a good thing for both large and small companies.

“The growth of the podcast market continues to be incredibly exciting, with a mix of large and small companies making audio content for a huge range of clients, as well as their own original and self funded content,” Straw says. “This range is important for new ideas, talent and perspectives to continue to come to the fore.

“It is also good to see companies growing and increasing scale as this provides more opportunities to compete internationally for investment, as well as giving a strong base for staff development.”

After a recent announcement from Amazon that it will now be offering ad-free premium podcasts to Prime Members, Boom told The Verge in an interview that he doesn’t believe consolidation in the podcast market is an issue, and that independent podcast studios can still survive since none of them are being acquired by force. 

“I think between Wondery and us, we saw unique synergy,” Boom said. “There are lots of independent podcast studios that I just described that are working with us as partners, and not through acquisition, that we can help to monetize better than they were on their own and actually help them stay independent.

“I don’t think you are going to continue to see a huge consolidation of all these studios in podcasting.”

The announcement was part of Amazon’s expansion into more audio content in an effort to compete with other podcasting platforms such as Spotify and Apple Podcasts. As of October 2022, Amazon Music is the 11th most popular podcast platform according to Buzzsprout with only 0.7% of overall listeners. However, it has increased by over 78,000 listeners in just a month between September and October.

As the podcast market continues to grow in this current climate, IAB CMO James Chandler believes that although consolidation is inevitable, there needs to be a balance to allow for competition.

“The strength of the advertising opportunity in podcasting is defined by extremely high-quality content, attentive listeners, and increasingly sophisticated ways to reach them,” said Chandler. “This powerful combination is being championed by producers large and small and it’s this that will help to maintain podcast spend going forward.”

“I don’t expect the current levels of consolidation to change that but, having said that, balance is paramount,” he added. “Consolidation should be expected and - to an extent – welcomed as a sign of a flourishing market, but we also need competition and diversity to ensure the long-term growth of this dynamic market.”