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If you haven't heard about the Sirius XM Pandora Stitcher deal just yet; don't worry. It's probably the only thing you're going to hear about from podcasting news circles this cycle. And then you can go back to your regular life as a working podcaster.
Not that I'm ambivalent or apathetic about the deal. I’m just puzzled. But let’s talk about what we know about this fresh-out-of-the-oven deal first.
Show Us The Podcasting Money
MarketWatch tells us SiriusXM (which means Pandora) is going to spend $265 million in cash to buy E. W. Scripps (which means Stitcher). Pandora will kick in up to $60 million of additional payments if Stitcher can achieve certain financial goals in 2020 and 2021.
The Verge tells us the deal is for all the podcasting bits of the company: Stitcher, the podcast listening app and directory; Stitcher, the podcast network, which has some exclusive content and some windowed shows, which is content that comes out first exclusively on Stitcher and then days and or weeks later everywhere else; and Earwolf, the production arm of the network that makes some rather big and popular podcasts; and Midroll, the podcast advertising service.
Some of the strategy of this move is pretty clear. Some less so.
It’s fairly clear that SiriusXM/Pandora are just following Spotify’s lead. That makes sense, as Pandora and Spotify are both competitors in the audio space. (Of note, Pandora is projected to fall behind Spotify in popularity very soon.) It makes sense that adding more pieces of the podcasting supply chain into Pandora’s business makes a lot of sense. And remember: Pandora just bought podcast hosting company SimpleCast a few weeks ago.
A Puzzling Podcasting Purchase Worth Pondering
On the surface, this seems like a pretty obvious play to maintain parity with their bitter rival Spotify. But to me, it seems a bit disjointed. Perhaps that's because Sirius XM/Pandora aren't talking publically about their plans as much as Spotify did when they were making their big acquisitions starting in 2018. It could be that I’ve just not yet been exposed to their larger strategy.
I’m more puzzled by the finances of this deal. Not that I’m even remotely qualified to properly vet this deal, as I’m no expert in mergers and acquisitions. But in this case, it doesn’t take a financial genius like Navin Johnson’s dad to see some problems. E. W. Scripps’ share price is struggling this year, according to MarketWatch, with a drop of 43% this year.
SiriusXM’s market performance isn’t much better, with a stock value down 20% thus far in 2020. And before you lay the blame on the pandemic or global economic recession, I remind you that much of the market has returned to pre-pandemic trading. And that Spotify is close to doubling its stock price since the start of the year.
The next thing that I’ve yet to figure out is how all of these disparate parts are going to work together. Because Pandora already has their own advertising company and ad tech in AdsWhizz. Will Midroll’s assets roll under that flag? Will AdsWizz be subsumed by Midroll, who all but lost their identity in 2018 under a Stitcher-first branding redux in 2018? Or will they work independently, with AdsWizz staying focused on the “radio” side of the business while allowing Midroll to continue to innovate in the rapidly-expanding podcasting ad tech game?
Earwolf is a great production company making high-quality content, some of which is exclusive to Stitcher. But Pandora also has original podcasts and exclusive deals, much as they announced in partnership with Marvel in 2019. Will Earwolf manage it all?
Beyond the strategy of “let's spend a lot of money to acquire all aspects of podcasting so that we get to parity with Spotify”, I’m not sure I’m tracking with all of these moves. They seem… disjointed and leave more questions than they answer.
What The SiriusXM/Pandora Acquisition Of Stitcher Means To Working Podcasters
This is good news for all of us. Even with the uncertainty of the economy right now, it still shows podcasting is worthy of large investments and acquisitions.
It will be even better news if SiriusXM takes a similar approach taken by iHeartRadio and starts using their remnant advertising inventory to drive listeners to and awareness of podcasts in their app, we win. Because we know that once people get the podcasting bug, they tend to seek out other shows, not just exclusive content.
And you don’t have to do anything to gain that advantage. Other than making sure your shows are listed on Pandora, obviously. Hopefully, this new acquisition will mean the approval process of six weeks or more shrinks to a realistic number. But we’ll see.
No one is pounding on my door trying to throw $265 million dollars at me. However, a few good-natured souls buy me a coffee on a regular basis. You can do the same at BuyMeACoffee.com/EvoTerra if you are so inclined.
Finally, I would really appreciate it if you would share this episode or the entire show with one person today. Make a phone call, send a text, or fire off an email with a link to Podcast Pontification to another working podcaster in your life. Please?
I shall be back tomorrow with yet another Podcast Pontifications.
Cheers!
Podcast Pontifications is written and narrated by Evo Terra. He’s on a mission to make podcasting better. Allie Press proofed the copy, corrected the transcript, and edited the video. Podcast Pontifications is a production of Simpler Media.
