Amazon is investing more in podcasts. Recently, it had a deal with Exactly Right Media that costs more than $100 million, about the same amount as Spotify paid to acquire the exclusive rights to the biggest podcast in the market today, The Joe Rogan Experience.
Why is Amazon doing this and how can this move affect sellers?
What the Deal Involves
For more than $100 million, Amazon acquires the distribution and advertising duties to Exactly Right Media’s podcasts, which includes My Favorite Murder that has 35 million downloads per month and is the sixth most listened-to podcast in the US. The company’s portfolio also includes the following:
- The Murder Squad
- This Podcast Will Kill You
- I Saw What You Did
Unlike Spotify’s deal with Joe Rogan (who is in hot water right now for alleged misinformation), Amazon didn’t acquire exclusive rights to the podcasts. Instead, the episodes will be available one week in advance exclusively on Amazon Music. After the week is over, the episodes will be made available on other platforms.
Why Is Amazon Acquiring Podcasts?
Amazon is the biggest online marketplace today, and it can be successful without investing in podcasts. So why is it paying millions for these types of deals?
It appears that the main purpose is advertising.
The podcast industry is a thriving one. According to SupplyGem, there are 464.7 million listeners globally, and the ad revenue is expected to be more than $4 billion by 2024.
Amazon appears to be building an audience that it can use to increase its ad revenues. This is probably also one of the reasons why it didn’t go for exclusivity in its latest deal. By making them available on other platforms, they will be exposed to a larger audience, leading to more ad revenues.
What Does This Deal Mean for Amazon Sellers?
Third-party sellers can possibly benefit from podcast deals like this. How?
One of the benefits of a Prime membership is the ability to stream on Amazon Music and Wondery. Users need to log into their accounts if they want to listen to music and podcasts. With more popular podcasts published earlier on the platform, it may result in higher renewal and retention rates for Amazon Prime members as it offers more benefits other than fast shipping.
Survey shows that Prime members spend four times as much as non-Prime members, which equates to more customers not only for Amazon-owned brands but also for third-party seller brands.
So these deals are a win-win situation. It pays podcasters, increases Amazon’s ad revenues, and helps bring more paying customers to brand owners.
Amazon is thinking long-term with its investments. Podcasting is projected to grow even more in the coming years, which makes it an effective advertising medium.
Here at EcomCrew, we’re also taking steps to improve our podcast. We started uploading full episodes as well as shorter clips on Youtube. So if you’re looking for good e-commerce related shows that are released weekly, subscribe to the EcomCrew Podcast.