On Our Radar: Deals we are paying attention to for their impact on industry.
Driven by a maturing and fast-growing audio advertising market, M&A activity in the podcasting space continues apace.
The latest example is the audio streaming platform Spotify’s plan to acquire the podcasting content factory Parcast, announced on March 26. It’s the third network Spotify has hoovered up this year. The deal is in line with Spotify’s quest to become the “Netflix of podcasting,” using the $500 million it has set aside for acquisitions.
Neither Spotify nor Parcast revealed the deal’s terms. Spotify said in a release that the deal is expected to close in the second quarter of this year.
Earlier this year, Spotify closed on acquisitions of Parcast competitor Gimlet Media and the podcast services firm Anchor.
Parcast’s true crime and other thematic series, launched in 2016 with the goal of making podcasts that sound like “audio movies,” have often topped Apple’s podcast charts and been a draw to advertisers. Driven by such creative innovations, the podcast advertising space – though still a trickle in the overall advertising market – is growing quickly and expected to reach $659 million by 2020, up from $169 million in 2016. (See Karma Network’s Industry Report on Podcasting for more details).
Parcast’s way of doing business is novel. Its founder, Max Cutler, eschewed the investigative reportage of other true crime outlets, such as Serial, Audible and the many franchises on television (Dateline NBC and America’s Most Wanted). Instead, with a team of over 50 writers, voice artists and editors, Parcast has built a large following for programming that was scripted and often based on well-known well-covered events. A recent program on the 1983 Cold War shoot-down of Korean Airlines (KAL) 007 by Soviet fighter planes is one example.
Spotify has said that Parcast’s original content production would keep growing: the streaming platform noted that in addition to the 18 serialized programs Parcast now produces , it plans to launch another 20 this year. Cutler, Parcast’s 28-year-old founder, said in a news release that his network’s popularity with women in particular made it an attractive acquisition.
“In three years, we have created a production house that has grown exponentially and hit a chord with mystery and true-crime fans, especially women,” said Cutler, “across all 50 states and around the world.”