Amazon announced Wednesday its intention to acquire Wondery. The startup will be part of Amazon’s subscription music service, Amazon Music.
Why is this important: The move reaffirms Amazon’s growing ambitions to enter the podcasting space. Podcasts are a natural fit for the company, which already has a subscription music business, an audiobook business and has a significant share of the smart speaker market in the United States.
- In May, Axios reported that Amazon was looking to invest in localized podcast content, like news and sports, to help bolster its Alexa voice assistant.
- Several job postings and reports have suggested that Amazon Music, as well as Amazon’s audiobook arm, Audible, are looking to invest more in podcasting.
What they say : “When the deal closes, nothing will change for listeners, and they will continue to be able to access Wondery podcasts through a variety of providers,” the tech giant said in a statement.
- “With Amazon Music, Wondery will be able to deliver even more innovative, high-quality content and continue its mission to bring a world of entertainment and knowledge to its audience, wherever they listen.”
Details: Terms of the deal were not disclosed, but a recent Wall Street Journal article suggested Wondery is valued at more than $300 million.
- The WSJ reported earlier this month that Wondery was on track to generate around $40 million in revenue this year, with around 75% of that revenue coming from advertising and the rest from licensing fees it charges other companies to distribute its podcasts.
- Wondery has produced several successful podcasts, such as “Dirty John”, “Dr. Death”, “Business Wars” and “The Shrink Next Door”.
- Amazon says it hopes to “accelerate the growth and evolution of podcasts by bringing creators, hosts, and immersive experiences to even more listeners around the world, just like we do with music” with the Wondery deal.
The big picture: The deal is the latest in an audio acquisition frenzy.
- Last year, several key companies, such as Spotify, iHeartMedia, SiriusXM and Apple, invested hundreds of millions of dollars in podcast acquisitions.
- Wondery was one of the last large enough indie podcast platforms to be considered an obvious acquisition target.
Go further: The podcast war escalates