Is Amazon close to buying Wondery?
Amazon.com Inc. AMZN -0.76% is in exclusive talks to purchase podcast startup Wondery, according to those familiar with the matter, the tech giant is moving further into the growing audio segment.
The talks were worth more than $300 million in Wonder Lee, people said. The Wall Street Journal valued the company at $100 million in Wondery's final funding round in June 2019.
According to one familiar with the matter, the company is increasing its sales to more than $40 million this year, about 75% of which comes from advertising and the rest from licenses to TV, Audible and Stitcher Premium, and Wonderlyman's premium, which launched this summer. Subscription service
Negotiations are going on and negotiations could still fall, people said.
Closely hold Wondery is the last large-scale independent podcaster on the market and could give a major tech or media giant a last chance to get into the explosive field. Investors comprise renowned firms such as Waverley Capital, Lerer Hippeau Ventures, Greycroft Partners and Advancit Capital.
Amazon's entry is in line with the rapid growth of the small but fast-growing podcast industry. Once a domain for super niche, true criminal content, and pop culture dissection, the format has exploded in recent years as a destination for popular entertainment and political programs. Overall, podcasting attracts more than 100 million active listeners every month, according to Edison Research.
Meanwhile, U.S. advertising revenue from podcasts is expected to exceed $1 billion in 2021, according to the Interactive Advertising Bureau, an increase of about 48% last year.
Major players in the technology and media sector have acquired other podcast startups in recent years. Spotify Technology SA acquired Gimlet Media, producer of narrative podcasts for over $200 million in 2019. The New York Times NYT 2.05% said it will take over Serial Productions, creator of the hit podcast “Serial,” in July in a deal that could reach $50 million depending on milestones and performance metrics.
Famous for true crime podcasts such as “Doctor Death”, “Dirty John” and “Over My Dead Body”, according to audio analytics firm Podtrac, Wondery was the 6th most popular podcast publisher in the United States in September. Over 60 million downloads and show streams. Publishers that preceded Wondery include NPR, iHeartMedia Inc. And the New York Times.
Like many other colleagues, Wondery has benefited from the growth of podcasting among listeners and advertisers. Wondery monetizes advertising and licensing fees, as well as choosing rights to podcasts for media companies such as WarnerMedia and Walt Disney Co by AT&T Inc.
Amazon Music turned to podcasting in September, aiming to entice new listeners with 70,000 titles, consisting of a new original exclusive show hosted by DJ Khaled, Becky G, Will Smith and Dan Patrick.
This tech giant is associated with Spotify, which has invested hundreds of millions of dollars in Apple podcasts and formats from Apple Inc., which most podcast listeners tune for free, and triggered a race for programming and talent.
While Amazon joins the competition, executives said the service could be approached in a different way from its competitors, just like music streaming, and could bring new podcast listeners, especially through voice-activated home speakers. Amazon has the third-largest music service by subscription, after Spotify and Apple Music, and has built an old listening base across the United States, in part with the help of Prime subscription services and Echo speakers.