Podcasts Boomed in 2019, But 2020 Will Be Even Bigger

“You have a lot of celebrities who have traditionally been outside of podcasting coming into the space,” Ad Results Media CMO Kurt Kaufer says

The podcast boom shows signs of going thermonuclear in 2020, as major tech and content companies juice studios with hundreds of millions in investment and more A-list stars flock to the medium.

While 2019 marked the beginning of the boom with Spotify’s acquisition of Gimlet Media, a surge in revenue and increasingly ambitious projects across the podcast space are expected as audio platforms compete for market share and ad dollars.

Advertising revenue for the U.S. podcast market surged 53 percent from $313.9 million in 2017 to $479.1 million in 2018, according to PwC and IAB’s August 2019 report on the industry, and 2019 is projected to clock-in around $678.7 million. By 2020, PwC expects the podcast industry to reach $863.4 million and top $1 billion by 2021. 

This is big money, and big tech and Hollywood have taken notice.

“In 2016, we found it to really be a nascent industry, and advertisers were really testing the waters,” says David Silverman, co-leader of PwC’s national emerging company services practice. “People start listening to podcasts before it gets monetized. There’s a bit of a catching-up period.”

While the early years of podcasting were defined by independent creators and experimentation, 2019 has seen a rapid uptick in major entertainment players entering the marketplace, bringing higher production values and star-powered legitimacy. 

Streaming music platform Spotify made waves in February when it acquired Brooklyn-based podcast producer Gimlet Media for some $230 million. Gimlet proved to be just the beginning of a buying spree. Spotify reportedly shelled out more than $100 million just a few days later on Anchor and an additional $56 million on podcast studio, Parcast, later in the spring.

Spotify argues that it still sees independently produced, creator-led podcasts as the core of the industry and the company’s primary focus, but there’s clearly growing interest in studio-produced programs. The streaming platform boasts some 500,000 podcasts in its catalogue, according to Lauren Jarvis, head of content partnerships, North America. 

“Gimlet is a huge part of that, and what we do with our Spotify original series, as well, is a huge part of that,” says Jarvis, “But what is coming out of the catalogue side of our business is incredibly important to how we think about where we’re going in 2020.” Spotify is spending big on original programming in an effort to differentiate the brand from competitors such as Apple.

Jarvis expects large numbers of independent creators to continue launching their own podcasts in the years ahead and pointed to individuals, such as Joe Rogan, Dax Shepard and Anna Faris as examples of this model’s success.

Nevertheless, Spotify is clearly betting big on its original productions. Gimlet’s latest scripted fiction entry, Motherhacker, went live on Nov. 13 with a cast that includes Carrie Coon, Pedro Pascal, Alan Cumming, Lucas Hedges, Tavi Gevinson and Alex Goldman. The powerhouse cast speaks to not only the growing creative ambitions of the medium, but also the commercial potential. 

Gimlet has launched five fiction shows, and “it does feel like it is proof of concept, and it does flesh out the story and is a valuable piece of IP,” says Mimi O’Donnell, head of scripted for the studio. “You can see the trajectory where more and more podcasts are getting optioned and heaving a second life in television or film,” she says, adding that all of Gimlet’s fictional podcasts have garnered interest.

Gimlet’s 2020 slate is even deeper, including new shows from Jordan Peele, Mark Wahlberg and Amy Reed, among others.

Of course, Spotify isn’t alone. Apple, historically the biggest player in podcasting, still commands between 50 and 70 percent of the market. And faced with Spotify’s rising threat, it has plans in the works for its own original series–unannounced at this time–and reportedly hired former National Geographic director of podcasts Emily Ochsenschlager in November. Bloomberg also reported over the summer the company was purchasing exclusive rights for series.

The arrival of Apple TV Plus increases the probability of original podcasts being bundled into a paid subscription. Netflix has also been dipping its toe into podcasts, and Disney has been experimenting in the scripted arena with a show about Marvel’s Wolverine character on Stitcher’s premium platform. These sorts of companies “look at it as an IP pipeline, and it’s a cheaper way to market-test certain ideas and reduce risk,” says Ad Results Media CMO Kurt Kaufer.

“You have a lot of celebrities who have traditionally been outside of podcasting coming into the space and propping up successful shows pretty quickly,” Kaufer said.

Indeed, The fictional podcast space is one of the fastest growing, with ad revenue surging 344 percent in 2018, according to PwC. (Scripted fiction accounted for 4 percent of the total US podcast ad revenue generated in 2018, up from less than 1 percent in 2017.)

Part of this trend can be attributed to changes in how people consume audio content versus film or TV. 

“You can listen on your phone and leave the door and have the story follow you,” O’Donnell says. 

She expects to experiment with more formats in 2020. Motherhacker’s nine episodes are all less than 15 minutes long and dropped as a batch, but O’Donnell says the company is thinking about shows with weekly episodes, longer series with 22 or 25 episodes, or potentially even shorter episodes in the 2-5 minute range. “Sometimes it gets thought of as radio drama,” she says, “but it is a thriving, interesting way to listen.”

Paid podcasts could find success “on a unit basis, like a particular podcast, or just as a service,” potentially bundled with a streaming service, says PwC’s Silverman. 

“There’s a possibility that they say ‘let’s get the best content in the space and make sure only our subscribers can utilize it,” Silverman says. “As companies focus more on the quality of the content, that might come to a more restrictive ownership.”

Benjamin Reeves

Benjamin Reeves

Benjamin Reeves is a New York based journalist and writer. His work has appeared in publications including Worth, Los Angeles Review of Books, USA Today, Miami Herald, Talking Points Memo and Vice, among others.


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