Less than a few months after picking up Simplecast for its podcast spread and analytics implements, SiriusXM today is announcing an even bigger acquisition to raise its game in the realm of streamed spoken-word content. The spacecraft radio firm said it has reached a deal to acquire Stitcher from E.W. Scripps for $325 million, a return of more than doubled Scripps’ investment in podcasting, the companies reported this morning. Stitcher is a podcast pioneer that supplies a popular one-stop platform to create, monetize( via push) and give podcasts to be heard via its app and on numerou programmes, and that is precisely what SiriusXM are ready to capitalise on.
” With our team’s collective knowledge in digital audio, analytics and ad tech, plus Stitcher’s deep experience in podcasting, I learn significant opportunities ahead ,” said Jim Meyer, CEO of SiriusXM, in an internal memo shared with TechCrunch.” Together, we can create a transformative one-stop shop to better meet the needs of podcast authors, publishers and advertisers–while also supplying listeners with new ways to find and connect with huge registers .”
Stitcher brings to SiriusXM its own mobile listening app, acquired for $ 4.5 million in 2016. It also operates the Midroll Media network for podcast advertising, acquired for $ 55 million in 2015. And it creates original podcasts and rolls several content networks, via Earwolf.
The deal means thousands of podcasts will move to the SiriusXM stable, including favourite claims like Freakonomics Radio, How Did This Get Made ?, SuperSoul Sunday from The Oprah Winfrey Network, Office Ladies, Conan O’Brien Needs a Friend, Literally! With Rob Lowe, LeVar Burton Reads, Comedy Bang! Bang !, and WTF with Marc Maron.
Combining Stitcher with SiriusXM’s spacecraft radio public and Pandora( which SiriusXM acquired in 2018 ), the company says it is now time have” the largest addressable gathering” in the United Government for digital audio, including music, sports, talk and podcasts, crossing 150 million listeners.
” This sale is conducive to Scripps’ track record of thriving organizations that capitalize on the evolution of consumers’ media attires and then unlocking shareholder value through spinoffs, outlets and continued organic rise, ” said Scripps president and CEO Adam Symson, in a statement posted.” Over and over, this strategy has proven effective as well as profitable for the company and its shareholders ,” he added.
The sale price of $325 million includes $265 million of cash upfront with an earnout of up to $ 30 million based on 2020 financial results and paid in 2021 , memorandum Scripps. It also includes an earnout of up to $ 30 million based on 2021 financial results and paid in 2022. All Stitcher hires will join SiriusXM as a part of the deal.
” The addition of Stitcher is an important next gradation as we continue to develop and strengthen our offering in the fast-growing podcasting market ,” said Meyer in the news announcement.” With Stitcher, we will expand our digital audio pushing presence and look to generate new ways for builders to find and connect with their gatherings. Stitcher has a talented unit with late experience in the podcast infinite, and we look forward to working with them to better meet the needs of pioneers, advertisers, and listeners ,” he said.
The deal follows SiriusXM’s recent acquisition of podcast the managers and analytics pulpit Simplecast. Along with its ad tech and monetization pulpit AdsWizz, the add-on of Stitcher will expand the company’s existing suite of podcast hosting, analytics, revelations and marketplace offerings.
The deal underscores some key trends in the area of podcasting.
The first is that companies that are operating streaming businesses located around music are double-faced down on the growing popularity of podcasting content to complement those occupations, both to expand their audiences and their gathering engagement.
Sirius — which, in addition to providing its subscription-based satellite radio service and Pandora, is also a shareholder of SoundCloud — connects its peers in that strategy: both Spotify and iHeartMedia have induced conspicuous buys to acquire original podcasting material, as well as tools for podcasters to help range their businesses.
That strategy, in turn, has led to another transformation: a previously open podcast ecosystem, where you can listen to any podcast on the app of your selection, has evolved into a life where programmes aim to have exclusive material.( A significance, you might argue, of having fellowships that generate revenues from walled plots, which essentially contain the same troves of music, getting involved in the business of podcasts .)
Thirdly, it’s not easy to build podcasting, even with all its notoriety and future potential, into a big and profitable business.
SiriusXM is no less than Stitcher’s third owner , not counting the period it was an independent company. It was founded in 2008, then Deezer acquired it in 2014 for an unknown sum, and then Scripps acquired it less than 2 years later for about $4.5 million.
Under Scripps, Stitcher may have been one of the company’s fastest-growing ventures, but it was also unproductive. And so, as Scripps faces investor pressure of its own — its losses widened in the final quarter, and that was with COVID-1 9 coming in only at the hind end of the period, making the impact may well be significantly more severe in its Q2 reported later the summer months — parting with its valuable podcasting asset at a time when it is in hot M& A requirement may have seemed like the right choice.
Deloitte forecasted( in December 2019, pre-COVID) that podcasting will burst $1.1 billion in receipts this year, but frankly we’re still in the early rounds of the podcasting industry. And today, it was SiriusXM’s turn to throw its hat into the ring.
The transaction is expected to close in the third quarter, pending Hart-Scott-Rodino clearance. LionTree Advisors behaved as exclusive advisor to Scripps in the sale process, and BakerHostetler is serving as legal counsel.
Additional reporting by Sarah Perez.
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