A new competitor has arrived on the podcast streaming scene: Amazon.
The retail giant already has their music subscription service, Amazon Music, and adding podcasts to that library is sure to gain them a cut of the many podcast-streaming consumers in the U.S.
In fact, Spotify stock has fallen by more than 3% since Amazon added podcasts to their streaming service.
Podcast streaming services exist in a competitive market. Spotify just inked a $100 million deal with Joe Rogan in May that gives them exclusive rights to “The Joe Rogan Experience” from September 1, 2020 to January 2021. Spotify has also reportedly acquired four companies – Parcast, The Ringer, Gimlet Media, and Anchor – to help grow their library.
Meanwhile, Apple has their “Podcasts” app automatically installed on each of their devices, granting them a large group of users.
But Amazon, Inc. isn’t exactly afraid of anything. Executives differentiate Amazon podcasts from others by saying they can bring new podcast listeners to the market through their Alexa and Echo speaker devices.
“Despite all the hype and growth, podcasting is still at the early stages of mainstream adoption,” said Steve Boom, vice president of Amazon Music. “Our entry will grow the pie for everybody and introduce new groups of listeners just like we do with music streaming. We think the timing is perfect.”
According to the Interactive Advertising Bureau, ad revenue for U.S. podcasts rose about 42% last year, garnering about $678.7 million. Experts project that dollar amount to rise to $863.4 million this year and over $1 billion in 2021, according to the Wall Street Journal.
“What you’re seeing is the evolution of what it means to be a streaming service,” Boom continued. “Everyone’s becoming more than just a music service.”
He added, “When you look at the history of who was dominant in a market when it was really small, I don’t think that’s relevant for the future.”
Over 70,000 shows are now available for listening through Amazon Music. Listeners can also tune in using their Amazon Alexa and Echo devices.
Those shows include exclusive new podcasts (DJ Khaled’s signed on for one) as well as many that are available across various streaming platforms.
It’s likely Amazon will invest heavily in expanding their original podcast content, just like they did with TV shows on Prime Video.
However, offering podcasts that aren’t exclusive will allow them to get a foothold in the market before they attempt to do what Amazon does shockingly well: take over the whole game.