Podcasts, Live Entertainment's New Cash Cow
The audience for podcasting grew significantly in the past year. Currently, 51 per cent of Americans have listened to a podcast, with 32 per cent having listened in the past month, and 22 per cent in the past week. That was a sizeable jump up from 57 million last year and the biggest leap in monthly listenership to date. This jump in consumption is driven not only by the growing adoption of smart speakers, but also acquisitions from major media conglomerates which have reshaped the podcast landscape. For instance, just this past year, Spotify acquired Gimlet Media, Anchor and Parcast spending over US$400 million to boost its podcast credentials. Additionally, media giants like iHeartRadio, who have doubled down on pushing podcasts to their over 250 million monthly listeners through their podcast recommendation engine, to place their branded content in users suggested listening preferences.
On the other hand, companies like Apple have reorganised their content by breaking iTunes up into three separate macOS apps: Podcasts, TV, and Music. This shift, across almost every major digital streaming platform, to prioritise podcasts is driving revenue from not only the recording of the podcast, but also the advertising and live entertainment space. Let’s break down the numbers.
According to the Interactive Advertising Bureau, podcast advertising brought in US$479 million in 2018, and estimates say it will scrape past US$1 billion by 2021. Compared to last year's revenue, is a 53 per cent increase over 2017. Additionally, Vivid Seats, one of the largest independent ticket vendors in North America, found the number of events sold based on podcasts has increased by over 2,000 per cent in the past six years. Some of the most popular podcast ticketing events included My Favorite Murder, Wait Wait... Don’t Tell Me, and Pod Save America to name a few. The average ticket price for these three events was US$111.00. Putting this into perspective, in the first half of 2019, the average ticket price for arena tours was US$108.00 generating only US$2.06 billion for the top-100 tours – falling by 26.8 per cent, or US$752 million year-on-year, according to a recent analysis by Pollstar.
So we know podcasts are profitable, but what makes podcasts so interesting for the live entertainment business? First and foremost, it's their diverse, widespread audience. Podcasts are one of the few forms of entertainment drawing in everyone from millennials to baby boomers. Additionally, the lack of complex production needed allows content creators to deliver audiences more, high-quality content and shows without the need of heavy backline production. This "slim setup" is one of the reasons podcast tours can easily penetrate tier 2 and 3 markets, something that massive arena tours for artists have a hard time doing.
With podcasts continuing to grow in listenership, and more people demanding live experiences with their favorite shows, there has never been a more critical time for brands and the live entertainment business to come together to tap into this new cash cow.