posted on: Thursday October 1, 2020
by Dave Argento ’21 A&E Staff
With people having more time on their hands than they ever could have imagined pre-quarantine, drastic shifts in the consumption of entertainment have signaled new trends that may extend far beyond the days of masks and social distancing. Entertainment consumption has shifted even further towards the internet and the home, correlating to greater viewership and more large-scale investments in the podcasting industry.
Podcasting is expected to grow in revenues from just over $1 billion in 2020 to $3.3 billion in 2025, leading a multitude of influencers, celebrities, and companies from other forms of media and entertainment to flock to the growing market. The remarkably low barrier to entry has led the likes of Michelle Obama, Oprah Winfrey, Conan O’Brien, Jenna Fischer, and more to plug in the microphone and press the record button. With this newfound interest from celebrities as well as listeners, many podcasters have started to receive the financial compensation that had not been available in previous years.
The primary challenge podcasters have historically faced has not been the demand, but rather the oversaturation of supply. With over one million podcasts and over 30 million episodes as of April 2020, most of these producers have never seen a penny for their work. The podcasts that have been able to attract significant viewership have earned revenues, the majority of which have come via advertising and sponsorship. This has led to a growth in the industry, but the largest boom has come within the last two years with large-dollar licensing deals through major media companies.
Spotify has made the greatest effort to take the lead in the race for the podcast market. According to Wendy Lee of the Los Angeles Times, “One of Spotify’s most recent high-profile deals was with podcaster Joe Rogan for an exclusive video and audio podcast worth roughly $100 million.” Rogan’s move to Spotify on Sept. 1 proved that the millions of listeners that the high-profile podcaster has consistently pulled are finally being recognized by large corporations. CFO of Spotify Barry McCarthy is quoted telling CNBC that “podcasts will be as important to us as original content is to Netflix.” The $400 to $500 million invested by Spotify in acquiring podcast companies in 2019 has solidified the fact that this is no pet project for the titan streaming platform.
Heightening competition between the major podcast streaming platforms of Apple Podcasts, Google Play Music, Spotify, and YouTube has appeared beneficial for monetizing the podcasting scene. However, the major concern with big business investment is how this will influence what creators can produce under their signed licensing deals. Issues have already arisen with Rogan’s deal, for example. Spotify shares dropped 8.8% on Sept. 2 following viewer backlash against the exclusion of episodes with right-wing personalities on Rogan’s debut catalog. The podcasting industry is a quickly evolving scene, so only time can tell how much growth it will achieve. Issues of political controversiality aside, however, podcasts will continue to be a profitable form of media for years to come.