Podcasting superstars are increasingly being offered lucrative deals by media companies to gain the rights to their shows. Recent high-profile deals include Travis and Jason Kelce’s $100 million deal with Amazon’s podcasting studio, Wondery. This shift in the audio landscape sees streaming platforms moving away from exclusive broadcast deals towards distribution and advertising rights agreements. SiriusXM and Spotify have also made significant deals with podcasters such as Will Arnett, Jason Bateman, Joe Rogan, and Alex Cooper, with figures reaching up to $250 million.
These eye-watering deals mark a return to major podcast companies paying stars enormous sums for their audio programs, but with a new twist in their strategy. Rather than banking on exclusive deals with unproven stars, companies are now focusing on advertising and distribution deals that allow the shows to be published across competing platforms. This new approach spreads risk across multiple platforms and aims to maximize audience reach and ad sales. Deals with high-wattage stars have previously failed to deliver expected results, leading to a shift in the industry’s business model.
One high-profile deal that faltered was Spotify’s partnership with Prince Harry and Meghan, which produced only one series and a holiday special. The couple ultimately parted ways with Spotify, following two years of slumping ad sales for the company’s podcasting unit. The current trend is leaning towards exclusive distribution deals to spread risk and control ad sales across multiple platforms. The Kelce brothers’ deal with Wondery gives the Amazon studio exclusive ad sales and distribution rights to their podcast “New Heights,” which is a top sports podcast during the football season.
Recent partnerships with podcasting giants such as Joe Rogan, “Call Her Daddy,” “SmartLess,” and “New Heights” have solidified their positions among the top 15 most listened-to podcasts in the US. The high-dollar values of these partnerships encompass future milestones, with companies paying out large sums upfront and recouping costs through ad sales on the back end. Advertiser spending on podcasts has increased by 22% this year, with overall podcast ad revenue expected to surpass $2 billion in 2024. Companies are hopeful that investing in top talent will lead to higher ad sales and revenue growth.
Podcasting has seen a surge in popularity, with about 100 million Americans listening to at least one podcast per week. The industry continues to grow, with consumers devoting 20% of their daily ad-supported audio time to podcasts. Spotify has experienced significant growth, adding 7 million paid subscribers in its latest quarterly report. The company’s ad-supported revenue has also increased by 13%, pointing towards a successful year for podcasts in 2024. While the multimillion-dollar podcast deals offer promise for revenue generation, the long-term success of these deals remains to be seen.
As the podcasting industry continues to evolve, companies are adapting their strategies to capitalize on the growing audience and advertising revenue. The shift towards non-exclusive publishing deals with exclusive ad and sales rights aims to maximize revenue potential across multiple platforms. While the landscape of podcasting may change in the future, the current trend suggests that high-dollar deals with podcasting superstars will continue to shape the industry for years to come.
