To put these numbers in perspective, annual podcast ad revenue is less than 5% the size of radio ad revenue and about 1.5% of TV advertising. While the podcast ad market is small today, it’s growing quickly and podcasts are under-monetized as a medium: We view audio (podcasts, radio) content as the most basic version of augmented reality, layering information over the physical world which users can consume while doing other tasks, such as driving, exercising, or working around the house. This topic is relevant because podcasting has reached critical mass as an entertainment and information medium, with roughly 40% of Americans age 12 and older listening to podcasts monthly.
Providing high-margin incremental Services revenue.įor Spotify, podcasts are central to its long-term success, primarily aimed at:.Maintaining leadership in an important content category.That said, we view Apple’s and Spotify’s podcast strategies as largely divergent.įor Apple, podcasts appear to fall into the hobby category, primarily aimed at: Meanwhile, Spotify has aggressively pursued the podcast opportunity, investing hundreds of millions of dollars to acquire ad technology and exclusive content.Īpple’s and Spotify’s approaches to podcasts have some competitive overlap, as both companies want to reach more listeners and help creators better monetize an under-monetized medium. After helping mainstream podcasts through the iTunes store in 2005, Apple has done little with the medium since. The market reaction was that Apple was finally ramping its competitive efforts with Spotify for podcast supremacy.
A week later, Spotify announced a similar marketplace. Apple made a brief yet important announcement related to its podcast offering at its Spring Loaded event in April: a global podcast marketplace, in which listeners can subscribe to individual shows that creators put behind a paywall. The podcast medium is massive, with about 40% of Americans age 12 and older listening to podcasts monthly.
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