Is the Future of Podcasting an All-Out War?

Apple, Amazon and Spotify, among others, are going to fight over top podcasts to increase their product offerings and sell you more paper towels.

The podcasting industry is at a fork in the road. Although podcasting generated over $1B in revenue in 2020, the earnings were unevenly distributed with the top 3% of podcasts capturing majority of the revenue and the other 97% left to scramble (Supercast). Such extreme disparities often go one of two ways: either they consolidate and companies acquire some level of monopoly power, or the industry as it stands disappears. I believe the latter will occur.

Top podcasts are going to become features.

In fact, I believe large tech companies are going to fight over the content in hopes of increasing their product offerings, convincing more people to join their ecosystem and ultimately sell you more paper towels.

The Current Disparity in the Market

As mentioned earlier, the podcasting industry faces a fork in its road. On one end are tremendously successful podcasts such as The Joe Rogan Experience and on the other end are much smaller, passion-project podcasts.

To understand just how unequal the podcast industry is, think about this: the median podcast receives 124 downloads/episode*, a podcast in the 97th percentile will receive 6,700 downloads/episode* and some of the top podcasts such as The Joe Rogan Experience receives an average of 11 million downloads per episode*.

*I recognize that downloads per episode is not the most accurate measure of a podcast’s success, however, there is no other KPI available and it gives a good relative indication of podcast success.

Such a large disparity in content’s success is not new. YouTube sees a very similar unequal distribution across its videos, with a small minority of videos getting a majority of the views. However, YouTube has something which podcasts do not: an easy-to-use, large-scale ad-placement platform. Whether you watch a video with 10 views or 10 million views, you will see an ad. On the other hand, you are very unlikely to hear an ad-placement on a podcast with 10 listeners.


Because without ad-placement technology, companies who wish to advertise on podcasts have to manually pursue advertising deals, with the hosts often having to do the ad-read. As a result, companies only go for the top podcasts — those with a guaranteed audience, creating the disparity within the market.

With the free and widely-accessible distribution of most podcasts, creating an exclusive podcast-platform will be near impossible. Consequently, building an ad-placement platform will likely prove to be extremely difficult, though not impossible by some large tech companies. Without the possibility of consolidation, the podcasting industry is going to have to go the other way — the podcasts themselves are going to get acquired.

Why Podcasts are Going to Become Features

The “featurization” (becoming a feature of another product) of content has already occurred in a number of industries, most recent of which is in the streaming industry. Content producers and tech companies alike are pursuing a strategy of featurization by reserving the streaming rights to a number of popular of popular shows with a highly loyal fan-base.

For example, Peacock has Friends, Apple has The Morning Show with lots of famous actors, and Netflix has all of their hit originals. The idea behind such a strategy is to leverage these “golden eggs” in hopes that these shows will be enough to entice viewers to join their platform. After all, content is king.

If this works for video, why wouldn’t audio-based platforms do the same?

The Podcast War

Because of the intimacy of the podcast medium (among other factors), podcast listeners have the same loyalty to a podcast as TV-viewers may have to a particular show. In fact, 80% of podcast listeners listen to all or most of each podcast episode (Podcast Insights). And just like TV, the listeners’ loyalty to specific podcasts means that the listeners are likely to consider switching platforms in order to continue listening to their favorite shows.

I suspect that podcasts will mirror the streaming wars, only the battle will be fought between Spotify, Amazon (Amazon Music) and Apple (Apple Music).

From a strategic perspective this makes sense. Acquiring podcasts and offering them as a feature of another product means one can get more traffic inside of your ecosystem. Once inside, some portion may be hooked by your offerings, leading the company to the perpetual cycle of acquiring more data & generating better insights, ultimately creating higher customer lifetime value and a higher retention rate.

For example, Amazon can acquire podcasts to put on Amazon Music and add it to the already feature-rich Amazon Prime subscription, convincing more consumers to subscribe to Amazon Prime and enabling Amazon to sell even more product and convince to retain their Amazon Prime subscription with some of their parallel offerings (Prime Video, Prime Reading, Prime Photos, etc.).

Has the Podcast War Already Started?

There have been a number of acquisitions in 2020 that have signaled the beginning of the featurization of podcasts:

For one, Apple acquired the startup Scout FM, which creates smart podcast stations based on different topics instead of focusing on only one show.

Similarly, Spotify acquired exclusive rights to the extremely-popular podcast The Joe Rogan Experience in a $100 million deal. Spotify’s stock price increased by more than 8% following the announcement. Spotify also acquired Megaphone, a podcast publishing tool that connects podcasts to advertisers.

Last but not least, Amazon acquired the podcast network Wondery, which is behind some of the popular podcasts such as Dirty John and Dr. Death. Amazon Music has also released podcast support, including its own original shows.

All of the aforementioned acquisitions make it clear that these three companies are rushing to corner the podcasting industry and garner the content required such that they can offer more high-weight, high-variance features to their customers and convert more prospecting customers.

All in all, the podcast industry is rapidly changing and I believe that we will soon see Apple, Amazon and Spotify competing against each other for podcast talent. Out of all three companies however, only Spotify seems to be preparing itself to dominate both the large-podcast market as well as capturing the smaller podcast market. But more on that in another strategy write-up.