Big moves, big money as major media get in on podcasts

This March 20, 2018, file photo shows the Spotify app on an iPad in Baltimore. Music streaming service Spotify is buying podcast companies Gimlet and Anchor as it looks to take on Apple's popular iTunes' podcasting platform. (AP)
Updated 10 February 2019

Big moves, big money as major media get in on podcasts

  • In a media sector experiencing rapid changes, podcasts are a ray of sunshine, easily adapting to consumer habits, whether it’s listening on a smartphone or through car speakers
  • The public radio station boasted nearly 17 million monthly listeners of its podcasts last year

NEW YORK: With growth rates and audiences that investors can’t resist, podcasts are attracting media’s biggest players — including streaming giant Spotify, which has made its mark with the acquisition of a sector heavyweight.
To acquire Gimlet Media — considered by some to be the industry’s most advanced podcast creator — the Swedish firm did not hesitate to shell out $230 million, according to estimates from specialist site Hot Pod.
And it has not stopped there, announcing other acquisitions for a global portfolio worth between $400-500 million this year.
In a media sector experiencing rapid changes, podcasts are a ray of sunshine, easily adapting to consumer habits, whether it’s listening on a smartphone or through car speakers.
Just 15 years ago, they barely existed — but 73 million Americans listened to at least one a month in 2018, according to a study by Edison Research.
Some mergers and acquisitions have already taken place — including Midroll’s 2015 purchase by broadcaster Scripps for $50 million, or iHeartMedia’s acquisition of Stuff Media for $55 million.
But the time for splashing big cash has arrived — in a universe still mostly dominated, at least in the US, by NPR. The public radio station boasted nearly 17 million monthly listeners of its podcasts last year.
“The ripple effects of this deal is going to be wild,” wrote Nicholas Quah of Hot Pod, predicting that media companies will now jump on the podcasting bandwagon, “regardless of whether they have an actual, informed strategy around such an acquisition.”
These days, nine-figure sums are the norm — on Wednesday, Californian startup Himalaya Media announced it had raised $100 million to launch its podcast network, backed by China’s Ximalaya FM.

As well as being the latest media trend, podcasts are attractive to investors and advertisers thanks to, from a business perspective, highly desirable audiences: young, well-educated and earning a higher than average salary.
In fact, about 51 percent of monthly podcast listeners in the US pulled in at least $75,000 a year, according to the Edison Research study. Of the entire US population, 38 percent earn the same figures.
But a key question is podcasts’ economic model going forward. For now, it is based primarily on advertising.
The sector’s advertising revenues are growing fast, and should reach $659 million in 2020, according to a 2018 study by PricewaterhouseCoopers and the Interactive Advertising Bureau. But that is still far from the amounts generated by radio.
The two main podcasting platforms — Apple and Android — are free, offering creators no revenue.
Others, such as Stitcher, offer paid subscriptions — while Castbox allow producers to implement a paywall which makes the listener pay after a few free downloads.
Spotify has yet to reveal its Gimlet integration strategy, but has already been pushing the dual revenue opportunities: advertising on one hand, paid subscriptions on the other.
Himalaya is starting on a free model, but allow listeners to “tip” their favorite shows with micropayments.
Eventually, it plans to offer paid content.
“The US market has shown that it can support paid content and other large international markets have developed models even stronger in premium,” marketing Vice President Peter Vincer told Variety magazine.
“This is the end of an era, the one that was kicked off in 2014 with the ‘Serial Boom,’” wrote Quah, referencing the most-downloaded podcast of all time. “I’ll miss it.”

Hamas media facing financial meltdown

Updated 20 February 2019

Hamas media facing financial meltdown

  • Beirut-based Al-Quds TV faces corruption claims after closure warning
  • The channel has been experiencing a financial crisis for the past three years

GAZA CITY: The announcement by Palestinian television channel Al-Quds TV that it will stop broadcasting by the end of February if it does not receive desperately needed funding highlights the financial crisis facing Hamas’ media institutions.

Imad Ifranji, Al-Quds TV’s director, said on Tuesday that if funds failed to arrive by the end of this month, “it is inevitable that the channel will shut down.” 

The Beirut-based channel’s Gaza office has been unable to cover its costs for the past four months and 50 employees have not received salaries for almost a year.

Al-Quds TV had 350 staff when it was launched in 2008, but now has only 150.

The channel has been experiencing a financial crisis for the past three years, despite cutting costs and reducing staff, Ifranji said.

Hamas began building its media “empire” following its victory in the 2006 elections and the imposition of absolute control over the Gaza Strip in mid-2007.

The fundamentalist organization enjoyed years of financial prosperity thanks to Iranian support, internal fees and taxes, and the use of smuggling tunnels across the border between the Gaza Strip and Egypt.

Hamas’ financial crisis began with the decline of Iranian support in 2012 and escalated after the Egyptian Army overthrew Muslim Brotherhood President Mohammed Mursi in 2013, leading to growing tension tension between the group and Egypt.

Its extensive media network has also faced claims of corruption and mismanagement by current employees and former staff members.

A few months ago, Al-Quds TV was forced to lay off dozens of employees. The channel’s debts are believed to run into millions of dollars.

The Palestinian Information Center website, the oldest and largest Hamas news site in seven languages, closed its office in the Gaza Strip.

A senior employee of a Hamas media organization in Gaza, who declined to be named, said that websites affiliated with the Izz Al-Din Al-Qassam Brigades, the military wing of Hamas, were also facing a financial crisis.

Some, such as the “8 o’clock” website were threatened with closure.

Saber Halima, an employee at Al-Quds TV’s Beirut headquarters, criticized the management of the channel, accusing senior employees of corruption and mismanagement. In a video posted on his Facebook page, Halima described the management’s treatment of employees during the crisis as “despicable and humiliating.”

Al-Aqsa TV, which broadcasts from Gaza, announced on Dec. 19 that it would stop broadcasting because of a lack of funding.

However, Wissam Afifah, the channel’s director general, told Arab News that it would continue to broadcast after paying its debts to the satellite channel Noorsat, estimated at $220,000.

Al-Aqsa TV, which is broadcasting from temporary offices after Israel bombed its main headquarters in Gaza in November, is required to pay a similar amount to the satellite to continue operating.

The channel’s management said it is unlikely the destroyed headquarters will be rebuilt with losses estimated at about $4 million. An employee of Al-Aqsa TV told Arab News that about 200 staff had not received full pay for more than a year.

The employee’s monthly salary was estimated at $800. He had received only $550 in the past four months — $400 two months ago and $150 a few days ago.

Yahya Sinwar, Hamas’ chief in Gaza, said the organization was considering closing small media institutions and merging other institutions to ease the financial crisis.

Analysts say the continuing Israeli and Palestinian National Authority restrictions on Gaza will only intensify the problems facing Hamas.

Hossam Al-Dajni, an academic close to Hamas, said: “The main reason behind the financial crisis is the developments in the region, such as Iraq, Syria and Yemen, and US pressure on Iran with regard to its nuclear program.”