Music streamer Spotify is buying podcaster The Ringer from its sports writer founder Bill Simmons, for $196m in cash and an earnout. Bloomberg speculated that the maximum payment may reach $250m.
The Ringer produces over 30 podcasts, particularly around sports and culture. Its output includes The Bill Simmons Sports Podcast, The Rewatchables and after-show podcasts for major HBO TV series including Game of Thrones. Simmons founded the company in 2016 after he left ESPN.
Spotify is planning for what it is believed will be large-scale switch of radio broadcasters to online platforms. It notes a 200% growth in podcast listening hours in the final quarter of 2019.
This latest acquisition brings the music streamer’s spending on podcast businesses to some $600m in the past 12 months. In 2019, it spent almost $400m buying three companies: the New York-based Anchor FM, an online platform; Gimlet Media, podcaster of Startup, Crimetown and The Pitch; and Parcast, which has launched 18 premium podcast series including Serial Killers, Unsolved Murders, Cults and Conspiracy Theories and its first fiction series, Mind’s Eye.
Spotify ended 2019 with 124m premium (paying) subscribers and 271m total monthly active users (MAUs) worldwide. It claims that over 16% of its 271m MAUs were listening to podcasts. Now, Spotify really is in the (online) radio business.
We should expect that increasing numbers of radio stations would move towards a situation where shows (especially, but not only, in talk) would be much more overtly marketed as podcasts as well as live broadcasts.
This may accelerate in the UK when News Corp launches its Times Radio using the clout of its newspapers, columnists (and radio stations of its own) to compete with the BBC’s Radio 4 talk station.
Like the BBC, Times Radio (which starts later this year) will reportedly not carry advertising, although it may feature some programme sponsorship. But we should expect to see News Corp exploring the co-promotion of radio programmes, podcasts and newspaper-online columnists.
News UK says: “We acquired Wireless <the talk and sports radio broadcaster> in 2016 with a clear ambition to bring their audio expertise to our newsbrands. The Times and The Sunday Times deliver world-class journalism to a substantial and highly engaged audience and Times Radio will create a new speech radio outlet to reach an even broader audience who want quality reporting and trusted, expert commentary in real time.”
Commentators are not missing the point that Rupert Murdoch has long been an arch-critic of the BBC’s impressive radio, TV and digital network which is funded by an archaic system of consumer licence fees. The BBC provides formidable competition for commercial media. In an era of accelerating global choice, its funding and scope is coming under attack, although any actual change may be up to 10 years away.
But the launch of Times Radio may be more significant than the politics. It has already begun recruiting some of the BBC’s best-known current affairs broadcasters. The unknown factor is the extent to which Times Radio might, for example, provide a linked radio/podcast service for subscribers to The Times newspaper.
It poses lots of possible questions for radio broadcasters everywhere and may help to push more news organisations into voice.
As with catch-up TV, commercial radio broadcasters have much to gain from online audiences but must, of course, carefully manage their time-scheduled advertising revenue. Newspapers themselves know only too well the danger of shifting audiences – but not revenue – to digital. That inevitable need for broadcasters to defend existing profitability may be why Spotify is feeling increasingly confident about its ability to do to radio what Netflix has done to TV. Welcome to media disruption.