#1ANDREESSEN HOROWITZ Podcasting & Audio Market Map Li Jin, Bennett Carroccio, Avery Segal#2Disclosures The views expressed here are those of the individual AH Capital Management, L.L.C. ("a16z") personnel quoted and are not the views of a16z or its affiliates. Certain information contained in here has been obtained from third-party sources, including from portfolio companies of funds managed by a16z. While taken from sources believed to be reliable, a16z has not independently verified such information and makes no representations about the enduring accuracy of the information or its appropriateness for a given situation. This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. You should consult your own advisers as to those matters. References to any securities or digital assets are for illustrative purposes only, and do not constitute an investment recommendation or offer to provide investment advisory services. Furthermore, this content is not directed at nor intended for use by any investors or prospective investors, and may not under any circumstances be relied upon when making a decision to invest in any fund managed by a16z. (An offering to invest in an a16z fund will be made only by the private placement memorandum, subscription agreement, and other relevant documentation of any such fund and should be read in their entirety.) Any investments or portfolio companies mentioned, referred to, or described are not representative of all investments in vehicles managed by a16z, and there can be no assurance that the investments will be profitable or that other investments made in the future will have similar characteristics or results. A list of investments made by funds managed by Andreessen Horowitz (excluding investments and certain publicly traded cryptocurrencies/ digital assets for which the issuer has not provided permission for a16z to disclose publicly) is available at https://a16z.com/investments/. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. Please see https://a16z.com/disclosures for additional important information. © 2019 - Andreessen Horowitz 2#3Table of Contents What is the state of the podcast market today? Listeners Listening Apps O Podcasters / Publishers O Hosting O Monetization Biggest exits Startup market map Chinese audio apps Investment thesis © 2019 - Andreessen Horowitz 3#4History of podcasting Source: Google Trends © 2019 - Andreessen Horowitz United States podcasts Search term 100 Term "podcasting" is invented 2/2004 (previously known as audioblogging) Apple adds directory of podcasts to iTunes store in 6/2005. Steve Jobs says "Podcasting is the next generation of radio and users can now subscribe to more than 3,000 free podcasts and have each new episode automatically delivered over the Internet to their computer and iPod." 50 25 1/1/04-3/4/19 Jan 1, 2004 iPhone launches 6/2007 8/2004: Adam Curry ("Podfather" of podcasting) drives podcasting into the mainstream with his program Daily Source Code All categories ▾ Jul 1, 2008 + Compare Web Search ▼ Note Apple launches Podcast app 6/2012 Serial airs 10/2014, considered first breakout podcast hit. Fastest podcast to ever reach 5M downloads (1 mo) Google discontinues. Google Listen 8/2012 Jan 1, 2013 Note Google launches standalone Podcast app 6/2018 mint Jul 1, 2017#5Podcast consumption is rapidly growing, with a quarter of Americans now listening weekly ● 65% of active listeners only started listening in the last 3 years % of Americans (age 12+) who have listed to a podcast: 60% 40% 20% 11% 0% 2006 -1-3% 1.8% 9% 2008 Source: Edison Research and Triton Digital, "The Infinite Dial 2019." © 2019 - Andreessen Horowitz 2.2% -1-1-% -23% -1-2% 2010 Ever 25% 1-2% 29% 14% 2012 27% ¹1-2% 7% Past Month 30% 1.5% -8% 2014 33% -1-7% -10% Past Week 36% 21:% 1-3% 2016 40% 24% -1.5% 44% 26% -1-7% 2018 51% 32% 22% Listeners (US, 2019) 144M ever 90M past month 62M past week 5#6Podcast listeners are consuming 6+ hours per week of podcasts and consuming more content every year • For weekly podcast consumers, average weekly consumption is 6 hours and 37 minutes ● On average, Americans listen to 7 podcast episodes per week Average Time Weekly Podcast Listeners Spend Listening to Podcasts 1 hour to less than 3 hours 25% Less than one hour 16% Don't know 1% 3 hours to less than 5 hours 25% 5 hours to less than 10 hours 16% 10 hours or more 17% Source (both charts): Edison Research and Triton Digital, "The Infinite Dial 2018" © 2019 - Andreessen Horowitz Average Weekly Podcast Episodes Consumed % of Listeners 25% 20% 15% 10% 5% 0% 18% 16% 16% 1 24% 17% 2 15% 19% 17% 13% 3 21% 20%20% 4-5 Weekly Episodes Consumed 17%17% 13% 6-10 8% 14%14% 11 2017 2018 2019 6#7Listeners are generally educated (30% graduate degrees), millennials (44%), and slightly more than half are male (though gap is closing!) HIGH SCHOOL OR LESS 15% SOME COLLEGE 27% GRADUATE DEGREE 30% EDUCATION LEVEL of monthly listeners BACHELOR'S DEGREE 27% GEN X (AGE 35-54) 33% BABY BOOMERS (AGE 55+) 16% Source: Edison Research and Triton Digital, "The Podcast Consumer", 2017. Graphs from Visual Capitalist © 2019 - Andreessen Horowitz MILLENIALS (AGE 18-34) 44% AGE of monthly listeners GEN Z (AGE 12-17) 7% FEMALE 44% GENDER of monthly listeners MALE 56% 7#8Since Apple launched its Podcasts app in 2012, smartphones have grown to become the most common device for podcast consumption In the past 30 days, which devices have you used to watch, download, or listen to a podcast? (Nielsen) 30 Millions of users 18+ 20 9.5 10 3.9 1 0 2014 13 9.8 4.4 1.1 2015 Source: Nielsen https://www.nielsen.com/us/en/insights/reports/2018/nielsen-podcast-insights-q1-2018.html © 2019 - Andreessen Horowitz 17 9.8 4.6 2016 23.9 10.4 5 1.7 2017 Smartphone Computer Tablet - Other 70% YoY rise mostly from Smart Speaker sales 8#9Podcasts are most often consumed at home (48%) or in a car (26%); macro trends around growing number of connected cars and smart speakers could impact this mix Source: Where podcasts are most often consumed At work 12% At home 48% Other 10% https://www.edisonresearch.com/podcast-consumer-2018/ https://chartable.com/blog/golden-age-of-podcasts © 2019 - Andreessen Horowitz In a car/truck 26% At a gym or while exercising 4% The Infinite Dial 2018 Edison Research and Triton Digital Connected car adoption Source: SoftClouds % of global car install base 25% Millions of units 20% 15% 10% 5% 0% US Smart Speaker Units Source: CIRP 80 60 40 20 2012 2013 2014 2015 2016 2017 0 36 12/2017 53 9/2018 Chartable 2018 2019 66 2020 Chartable 12/2018 9#10Apple Podcasts is still the dominant app for listening, though its share has declined from 80%+ to 63% in the past few years Launched in June 2018 200M+ MAUS Chart Source: Libsyn, Feb 2019 Apple Podcast traction data from App Annie, as of Feb 2019 © 2019 - Andreessen Horowitz Share of Traction by Top Listener Apps (Feb 2019) Other 14.8% Player FM 0.4% Podbean 0.9% Google Podcasts 0.9% PocketCasts 1.3% Podcast Addict 1.7% CastBox 1.9% Stitcher 2.0% Overcast 2.9% Spotify 9.5% Apple Podcasts 62.9% Ⓡ Podcasts DAUS 8M US 19M WW MAUS 27M US 66M WW 10#11There's a long tail of smaller listener apps each with market share <1% 9 $63M raised since 2013. Based in Stockholm $165M raised since 2002. Investors include Comcast & IVP. Based in SF Raised undisc seed from Arena Ventures and Shrug Capital in 2017. YC W'17 Music streaming service (like Spotify) DEEZER based in Paris. 14M MAU in April 2018. Owned Stitcher pre-Scripps acquisition Source: Libsyn, Feb 2019 © 2019 - Andreessen Horowitz Market share between 0.02-0.15%: 1. Acast 2. Innovative 3. Tuneln Radio 4. The Podcast App 5. Podkicker 6. Breaker 7. 8. Deezer AntennaPod 9. RSSRadio 10. RadioPublic 11. Castro 12. iCatcher 13. Himalaya 14. Podcruncher 15. Laughable 16. NPR One + many others Raised $100M led by Ximalaya and launched app in Feb. 2019. General Atlantic and SIG participated Comedy podcast discovery app, launched June 2016 Allows users to stream local NPR stations live and listen to NPR podcasts. Launched July 2014 hi L nprone 11#12Last 30 day Podcast App Downloads by Platform (from App & Play Stores) Apple Apple Podcast Apps - Last 30 Day Downloads Castbox 1.7% The Podcast App 1.9% Tuneln 4.3% iHeartRadio 7.6% Deezer 9.1% 390K 690K 820K 170K 6.4M Spotify 70.8% Apple Podcast estimated to be 6.6x larger than Spotify on iOS in terms of podcast listening Source: Apptopia 3/13/19. Spotify includes all downloads--not just podcast users © 2019 - Andreessen Horowitz Android Android Podcast Apps - Last 30 Day Downloads Castbox 1.8% Tuneln: NBA Radio 2.6% Google Podcasts 2.8% Castbox 3.0% iHeartRadio 3.8% Deezer 11.0% 40K 570K 720K 500K 2.1M 13M Spotify 68.0% 12#13Table of Contents What is the state of the podcast market today? Listeners Listening Apps Podcasters/ Publishers Hosting O Monetization Biggest exits Startup market map Chinese audio apps Investment thesis © 2019 - Andreessen Horowitz 13#14Consumer Podcast Listening Apps Key Players Key Features / Differentiation Incumbent Apple Podcasts (launched 2012, accounts for ~2/3 of all podcast listening. 27M MAUS in US estimated from App Annie) ©2019 - Andreessen Horowitz Pre-installed on all iPhones Lacking: Native monetization; in-depth analytics around listens; demographic information; attribution Large Existing Audience + New Podcast Focus ● ● https://www.iheartmedia.com/press/iheartmedia-revolutionizes-broadcast-radio-iheartmedia-analytics-first-fully-digital Spotify (9% of podcast market, 207M total MAUS as of Feb '19) Pandora (66M MAUS as of Q1 2019) iHeartRadio (120M registered app users, 270M monthly listeners across properties as of 2018) Google Podcasts Source: Spotify: https://investors.spotify.com/financials/press-release-details/2019/Spotify-Technology-SA-Announces-Financial-Results-for-Fourth-Quarter-2018/default.aspx Pandora: https://www.forbes.com/sites/joshmandell/2019/04/24/siriusxm-posts-earnings-miss-after-purchasing-pandora-media/ iHeartRadio: https://www.forbes.com/sites/joshuadudley/2019/02/11/iheartradio-looks-to-grow-the-podcast-audience-with-personalized-podcast-recommendations/#5fdaca746flc Competing on the basis of large existing user bases to whom podcasts can be cross-promoted, user data around listening habits, existing monetization capabilities (subs or ads), and budgets for exclusive content acquisition Long Tail Listening Apps CastBox Stitcher The Podcast App Pocket Casts Breaker and many others Competing on the basis of better user-facing features (discovery, search, commenting, sharing) & creator monetization (e.g. RadioPublic's Paid Listens program) Increasingly interested in exclusive content 14#15Apple Podcasts Snapshot Launched in June 2012. App is pre-installed on iOS devices. Traction Engagement (App Annie, as of early Mar 2019) DAU/WAU / MAU US: 8.3M /15.8M /26.5M WW: 18.5M / 36.0M / 65.5M Market Share (Libsyn): 62.9% (as of Feb 2019) iTunes is the largest and most influential podcast directory, with over 550K podcasts available (2018) Source: Apple Media Products. https://www.nytimes.com/2016/05/08/business/media/podcasts-surge-apple.html © 2019 - Andreessen Horowitz 9:41 <Search The Science THE Science of Happiness HAPPINESS PRI and the Greater Good S... SUBSCRIBE 4.5 ***** 494 Ratings Learn research-tested strategies for a happier, more meaningful life, drawing on the science of compassion, gratitude, mindfulness, and a more. Trailer JANUARY 22 Trailer Do you know the secrets to happiness? Learn what science has to say on The... Details 2 min Season 2 WEDNESDAY ne Listen Now Year In Review With.... 2018 Social Sciences Library Browse + Search 15#16Now the 2nd largest podcasting platform, Spotify introduced podcasts into the app in 2015 and has doubled its market share in the last year to 9% Spotify market share Source: Libsyn "The Feed" % of all Libsyn downloads 10.00% 7.50% 5.00% 2.50% 0.00% Source: https://chartable.com/blog/golden-age-of-podcasts © 2019 - Andreessen Horowitz 4.40% 12/1/2017 6.40% 5/1/2018 7.20% 8/1/2018 Chartable 8.50% 12/1/2018 ( 16#17Spotify made a major push into podcasts last year and is stronger in states with less podcast listening overall, suggesting that it has grown the total audience of podcast listeners 0.37 0.36 0.29 Downloads per Capita 0.12 0.13 0.30 0.22 0.13 0.14 0.36 0.05 0.15 0.09 0.09 0.15 0.13 0.09 0.14 0.27 0.12 0.13 0.07 0.07 Downloads per Capita 1.22 0.18 0.14 0.25 0.11 0.11 0.08 0.13 0.05 0.09 0.14 0.06 0.15 0.09 0.10 0.18 0.21 0.33 1.22 0.23 0.25 0.18 0.23 Delaware Columbia New Hampshire Rhode Island Connecticut 6.8% 5.2% 6.4% Downloads from Spotify 9.9% 7.1% 6.2% 7.3% 7.0% 5.7% 7.5% 5.9% 6.4% 6.1% 7.5% United States 7.0% 5.5% 8.0% 6.1% 6.4% 6.4% 5.5% 5.3% 7.2% 6.5% 7.8% 5.6 % 5.7% % of Downloads from Spotify 5.0% 15.0% 4.8% 6.8% 6.5% 6.1 % 6.8% 5.2% 5.0% PS 6.1% 8.2% 6.8% 7.1% 6.2% 4.8% 4.8% 5.8% 4.4% Maryland District of Rhode island Connecticut Source: https://medium.com/megaphonepods/spotify-is-growing-the-pie-bbdd06079c68 "download rates for 21 large-volume shows available in Spotify as well as more established apps for a period ranging from June 2018 to January 2019." © 2019 - Andreessen Horowitz 17#18Spotify Snapshot Audience: Spotify has 207M MAUS, 44% DAU/MAU (Feb. 2019). 96M Premium subscribers ($10/mo) Podcast content library: M&A: More than 185,000 podcast titles available In Q4, Spotify had 14 titles exclusive to Spotify including the 2nd season of Crimetown, The Rewind with Guy Raz, and the Dissect Mini Series hosted by Lauryn Hill Will experiment with exclusivity and release windows: "It'll be a mix of exclusive things that we make exclusively for Spotify, like we're doing right now with Mogul, or things that are windowed or things that are a mix of the two" (Alex Blumberg, Gimlet) Podcasts are strategically important to Spotify: "Growing podcast listening on Spotify is an important strategy for driving top of funnel growth in new users, increased user engagement, lower churn, faster revenue growth, and higher margins" (Press release) ((( Acquired Gimlet Media & Anchor in Feb 2019 for around $230M and $110M, respectively. Acquired Parcast, a network of scripted true crime podcasts, in Mar. 2019 for reportedly $100M "We want to acquire more, and have line-of-sight on total spend of $400-$500M on multiple acquisitions in 2019." Podcaster tools: Launched Spotify for Podcasters in Oct. 2018, which allows podcast creators who host their podcasts elsewhere to make their shows available to Spotify. Also gives data on episode performance, daily stats on listener demographics, location, engagement, and more. More than 10,000 podcasters are using this tool on a monthly basis. (Spotify also offers analytics tools to musicians) Advertising: Current focus of sales team is selling ads on shows that Spotify develops in-house or licenses. Ads that non-Spotify shows embed can stay on the platform Source: https://www.theverge.com/2019/3/5/18243729/spotify-podcast-strategy-gimlet-media-anchor-purchase; Parcast acquisition price © 2019 - Andreessen Horowitz 18#19Spotify Podcast Leadership ((( Key Leadership: Barry McCarthy, CFO - Previously served as Netflix's CFO. At MS TMT conference in 2/2019, McCarthy talked about how Spotify could use the Netflix strategy of building "super good, predictive algorithms, like we developed at Netflix" to figure out what kind of shows to make next. "Over time, we have lots of exclusive content because we get super successful at predicting how much to spend and what to invest in because we're able to extract insights and data we've accumulated about our users' taste." Courtney Holt, Head of Studios and Video - Former EVP of media and strategy at Disney, head of Maker Studios, President of Myspace Music. Has compared Gimlet to Pixar and Marvel -- which were purchased by Disney -- and operated as discrete and successful studios Alex Blumberg, cofounder and CEO, Gimlet - From 1999-2014 he was the producer for the public radio show This American Life and cofounder of Planet Money. From 2007-2009 he was the executive producer of the television version of This American Life. Gimlet makes shows including StartUp, Mystery Show, Surprisingly Awesome, and Reply All. Michael Mignano, cofounder and CEO, Anchor - Previously led Product for Aviary, growing the photo editing platform's audience to over 100M creators before being acquired by Adobe in 2014. He previously led Digital Product Development for Atlantic Records. "The wider otify organization wanted to give Anchor superpowers. What that meant was really around giving us the support and the infrastructure to be able to make better tools, to be able to offer better data, and, in general, make podcasting better." Source: https://www.theverge.com/2019/3/5/18243729/spotify-podcast-strategy-gimlet-media-anchor-purchase © 2019 - Andreessen Horowitz 19#20Spotify's Audio-First strategy as articulated by Daniel Ek, Feb. 2019 For the Record What's New THE PATH AHEAD Audio-First FEBRUARY 6, 2019 Culture and Trends Media Kit Company Info Behind the Mic Source: Spotify (https://newsroom.spotify.com/2019-02-06/audio-first/) © 2019 - Andreessen Horowitz Press Inquiries BY DANIEL EK Daniel is the Founder and CEO of Spotify, where he sets the company's overall vision. He was born and raised in Stockholm, where he founded Spotify in 2006. More than 10 years ago we founded Spotify to give consumers something they couldn't get - music any time, anywhere, and at the right price. Along the way, we broke the grip piracy had on our industry and restored the growth of global music through paid on-demand streaming. I'm proud of what we've accomplished, but what I didn't know when we launched to consumers in 2008 was that audio- not just music - would be the future of Spotify. ((( Podcasts lead to higher engagement & expands Spotify's user base: "Our podcast users spend almost twice the time on the platform, and spend even more time listening to music. We have also seen that by having unique programming, people who previously thought Spotify was not right for them will give it a try." Emphasis on original programming: "We believe it is a safe assumption that, over time, more than 20% of all Spotify listening will be non-music content. This means the potential to grow much faster with more original programming. - and to differentiate Spotify by playing to what makes us unique - all with the goal of becoming the world's number one audio platform." Better personalization and discovery: "Our work in podcasting will focus intensively on the curation and customization that users have come to expect from Spotify. We will offer better discovery, data, and monetization to creators" Monetization to creators: "we will scale our entire business, creating leverage in the model through subscriptions and ads" Unique levers of subscription & ad models, expertise in audio, and being a producer of podcasts & platform for creators: "Gimlet and Anchor will position us to become the leading platform for podcast creators around the world and the leading producer of podcasts." "No other audio company has the two-sided marketplace that we have built at Spotify - a marketplace that benefits artists and creators along with consumers. Nobody else has both audio advertising and subscription revenue model at scale globally. Nobody else in music has the engineering capabilities and the expertise in audio that we have at Spotify. And with the addition of Gimlet and Anchor, Spotify will now become the leading global podcast publisher with more shows than any other company." 20#21Google Podcast app launched 6/2018 Source: © 2019 - Andreessen Horowitz Qhackable podcast ALL NEWS VIDEOS IMAGES SHOPPING Hackable? podcast https://hackablepodcast.com Recent episodes Google And We're In Apr 3, 2018 32:08 Play. And We're In. 04.03.18. Passwords protect all of our sensitive information. But how easy would it be for a hacker to gain access. Listen in as Geoff puts his own passwords to the test. A Podcast from McAfee, Access Granted Mar 20, 2018 24:53 Keyless Entry Mar 5, 2018 25:16 More episodes E 11:11 Is It Hackable? Our New Podcast Intends to Find Out | McAfee Blogs https://securingtomorrow.mcafee.com.h.... Q ↓ (10 See your subscriptions here Hackable! By McAfee SUBSCRIBED✔✔ Pet-nology 2 hours ago 29.49 We see lots of movies and TV shows where hackers can infiltrate our lives with just a few keystrokes. But is it real? We're here to find out. Malicious cat photos, sketchy Wi-Fi networks, rogue rentals, all-knowing webcams - those are just a few topics tackled in Hackable?, where we let our... And We're in Apr 2-32.08 Access Granted Mar 19-24:53 Keyless Entry Mac4 25 16 11:11 All Dolled Up Dec 4 31.21 HACKABLE? O O O O O (p) Podcasts The Daily New tiny desk concerts StartUp Add a Podcast shortcut to your Home screen Ratiolab presets MORE PERFECT New RECODE DECODE the truth NEW EPISODES NO THANKS ADD Ever https://blog.pacific-content.com/exclusive-inside-the-new-google-podcasts-strategy-that-could-double-audiences-worldwide-b556cdc26e43 Modern Love lar The Ezra Klein Show THE REWATCH Tuesday, Apr. 17, 2018 The Daily HABLES One Nation, Under Money MORE M PERFECT Radiolab Presents: More Perfect 11:11 H JALEN JACOBY EAR HUSTLE HACKABLE? ( ( (92) Podcasts 11:11 On Android, podcasts are available through Google Assistant (e.g. "OK Google, play the 99% Invisible podcast"), Search app, and through the Podcast app •!if 21#22Google Podcasts accounts for just 1% of listens, according to Libsyn App is not pre-installed on Android devices ● Features: Al-powered recommendations based on what users subscribe and listen to (Home screen dynamically updates) O Device interoperability (pick up where you left off across Google Home, Android) O Monetization: O Future plans: O "The company says it's working on automated subtitles for reading along, and its acquisition of popular podcasting app 60db last fall hints at more to come" (Wired) Deep search inside podcast content Automated translation "Lookahead scrubbing" oo "Donate" button links out to creator's monetization webpage--not native to Google Podcast app No dynamically-targeted advertising; podcasters need to work directly with advertisers/sponsors or ad networks. "Google reserves the right to serve post-roll video or audio ads after podcast content. Google Play Music does not provide direct payment or revenue share for podcast content." Source: https://www.wired.com/story/google-podcasts-app-hands-on/, https://support.google.com/googleplay/podcasts/answer/6260352?hl=en, © 2019 - Andreessen Horowitz https://blog.pacific-content.com/instant-translation-lookahead-scrubbing-and-more-the-future-of-google-podcasts-71ede58b870c How I Built This with Guy Raz NPR + Subscribe Spanx: Sara Blakely May 6.32m FUBU: Daymond John May 354mg Guy Raz dives into the stories behind some of the world's best known companies. How I Built This weaves a narrative journey about innovators, entrepreneurs and idealists-and the movements they built. Available episodes Stitch Fix: Katrina Lake Apr 28. 51m Virgin: Richard Branson Apr 24, 2018 30m WPM Rent The Runway: Jenn Hyman Apr 17.28m THIS $ Donate O O a Radiolas presents MORE PERFECT npr Planet Money For you. The Daily Still rocessing Modern Love Google Podcasts wher New episodes •!if Fine THE hund REWATCHABLES Trending podcasts NOD In progress LeBron's Hand & Justify's Legs PTI tiny desk concerts Primusic The Daily Presents "Caliphate" The Daily ⠀ how SUPER it is. SOUL SANDRA PARDON INTERRUPTION EAR HUSTLE Downloads O 22#23Pandora: Relatively new to podcasts Launched Podcasts on Pandora in December 2018 (mobile only) Pandora audience: O 75.9M active users in 2018, down from 76.3M in the previous year. 6M paying subscribers (Premium launched Mar. 2017) O According to Apptopia, 64.4M MAUs in Feb '19 on mobile (where Podcasts are available) Podcasts on Pandora: O Over 400 podcasts available at launch, with over 100,000 episodes across a wide variety of genres including News, True Crime, Sports, Comedy, Music, Business, Technology, Entertainment, Kids, Health and Science "We think we can expand our audience by bringing people in to listen to a certain podcast and keeping them on the platform with the music we have. Over time, profit margins would grow because podcasts cost less than music." - Roger Lynch, CEO "Music will continue to be the core of Pandora," Lynch said. The company is instead looking to broaden its offering to retain existing users and regain the trust of those who have left in the past. (Variety) Exclusive streaming partner of Serial for season 2 (in other words, not streamed on Spotify). Reportedly paid a ton for this. O O Source: Pandora blog © 2019 - Andreessen Horowitz all p SERIAL FRES AIR 9:41 AM Top Podcasts Check out the most popular podcast on Pandora right now npr Podcasts G Recommended For You View all > P TAL DAIL Jenny Han Wait Wait... Don't Tell Mel Episode-Sep 8, 2018 npr Planet Money up first Up First NPR Podcast 5 Episodes npr РФР culture 23#24Pandora Podcasting Features Features: Personalized podcast discovery: "The key goal for our podcast launch was to solve the user question of 'What podcast should I listen to?"" Powered by Podcast Genome Project: Evaluates content based on a variety of attributes spanning content categories, as well as user signals including thumbs, skips, collects, and plays. System learns user preferences using natural language processing, collaborative filtering, and other machine learning approaches, coupled with in-house curation P Unclear plans around monetization: "Pandora is also looking to offer podcasters monetization options that will be superior to the current state of podcast advertising." (Variety). CEO Roger Lynch has said that host-read direct response ads are "not the most effective advertising model." M&A: Acquired AdSwizz in March 2018, which offers programmatic ad buying for audio advertising, interactive audio ads, and dynamic ad insertion for podcasts, for $145M in cash and stock. Adswizz partners include Spotify, Deezer, iHeartradio and Tuneln Acquired by SiriusXM in January 2019. Combined entity to be led by Sirius CEO Jim Meyer. Sirius has 36M subscribers in North America and 23M annual trial listeners Source: Variety © 2019 - Andreessen Horowitz 24#25iHeartRadio Snapshot Description: iHeartRadio, whose primary business is terrestrial radio broadcasting, has partnerships with major podcast publishers and distributes more than 20,000 podcasts including those from NPR, WNYC, ESPN and Gimlet. More than 95% of Apple's top 200 podcasts are available via the iHeart app and 12 of the top 200 on the iTunes chart are produced by iHeart. Parent company iHeartMedia filed to operate under Chapter 11 bankruptcy, dealing with a debt load in excess of $20 billion in March 2018 Audience (not podcast-specific) 250M monthly active listener (across all media properties, includes 858 radio stations) 120M registered users on iHeartRadio app Content Library iHeart is the 2nd largest publisher of podcasts, after NPR, with 750 original podcasts like Bobby Bones, Elvis Duran, Big Boy and "The Breakfast Club" In 2018, acquired Stuff Media, which produces 25 podcast shows, for $55M. "Stuff You Should Know" is first podcast ever to surpass 500M DL Top iHeartRadio Podcasts: Monster - The Zodiac Killer, The Ron Burgundy Show, HowStuffWorks, Family Secrets Includes topical programming intended to be consumed that day and evergreen content Source: Forbes, Inside Radio © 2019 - Andreessen Horowitz 9:41 Verizon Browse RON BURGUNDY The Ron... Will Ferrell.... POPULAR PODCASTS MONSTER TELE INSIDE CON 4:46 PM Podcasts TOPICS Monster From Tend.. FEATURED PODCASTS For You Your Library Your Podcasts all 7 88% ((9)) Radio: ROGAN THE JOE Inside Conan: An Im... Conan writers Mike Sweeney and Jessie G... APERIEN The Joe... Joe Rogan'... Playlists Ann I am BR Podcasts 25#26iHeartRadio Podcast Strategy Goal of growing audience & engagement: "Our goal is to both inspire podcast enthusiasts to find new content and introduce entirely new audiences to podcasts" (Chris Williams, CPO) Producing content with mass appeal. Will introduce new audiences to podcasts as an extension of their favorite morning shows or personalities like the Bobby Bones Show. Chris Williams on The Ron Burgundy Show: "He's appealing to this broad swath of people just because he's such a large pop culture icon [...] It's going to get a lot of folks attention who otherwise it would have been tough to try to convince." Better recommendations: Recently launched podcast recommendation engine for iOS, based on taste profiles and user behavior that's inclusive of podcast & music listening. Driving awareness of content: "I think we can grow niche targeted podcasts and I think there's a lot of headroom available by getting the audience that is interested in those niches aware that the content exists" Leveraging broadcast network to grow podcast audience: O "The not-so-secret sauce that we bring to the table is our podcast to broadcast capabilities" (Darren Davis, President) "Only 25% of Americans listen to podcasts. Contrast that to 273 million Americans a month who listen just to iHeart's broadcast radio stations. We've got the megaphone that can bring it to the masses in an accessible way." "With 850 stations that need content 24/7, there are a lot of places to try new things" "Imagine taking some of the biggest podcasts in America and having the megaphone of 272 million people on broadcast radio. Not only does it drive audience but it will drive a whole lot of monetization opportunities that weren't there before." O Source: Forbes, InsideRadio © 2019 - Andreessen Horowitz 26#27Audible Snapshot Audible channels, launched Sept. 2016, is Audible's short-form digital audio service, containing original programming $5/month, free for Prime members Lots of Internal Changes: According to Nieman Lab 8/2018, Audible is eliminating "a considerable number of roles within its original programming unit." "Sources within the company tell me that the role eliminations span a number of different teams within the unit, but most notably, they include nearly the entire group responsible for Audible's shorter-form podcast-style programming, like the critically acclaimed West Cork, The Butterfly Effect with Jon Ronson, and Where Should We Begin? with Esther Perel. That group was previously led by former NPR executive Eric Nuzum and his deputy, the public radio veteran Jesse Baker." O "Nuzum, who held the title of SVP of original content development, circulated an email announcing that he will be leaving the company in the next few weeks." Source: Nieman Lab © 2019 - Andreessen Horowitz Verizon Featured (((audible original >)) LISTEN TO THIS (audible original) Channels for Prime audicted CAN'T. STOP. LISTENING. Start Here Hear our editors on their latest listening obsessions, and find yours. audicted CAN'T. STOP. LISTENING (audible original)) 12:44 PM /||| My Library Hear our editors on their latest listening obsessio... DAYS THAT NEW SERIES ▷ Discover Downloads (audible original»)) NEW SERIES (audible original) pitch View All > Hear an incredible range of stories that illustrate... Channels JIM WALLIS NEW SERIES ... More! Verizon Featured LAUGH OUT LOUD Followed Channels. Channels for Prime PUNCH LINES NON STOP STAND-UP Audiobook Collections. Your exclusive stand-up comedy mixtape. Fresh humor recorded live at Audible's netw... Audible Originals Comedy Editors' Playlists My Library audible an amazon company View All Channels 12:44 PM Discover Downloads O. Channels ((audible TTVI events Neil deG Cross, a > > > More 27#28Table of Contents What is the state of the podcast market today? Listeners Listening Apps Podcasters / Publishers Hosting O Monetization Biggest exits Startup market map Chinese audio apps Investment thesis © 2019 - Andreessen Horowitz 28#29Podcast consumption follows a power law with a longtail of hobbyist creators Source: Libsyn, Jan 2019 © 2019 - Andreessen Horowitz Podcast download distribution (Jan 2019) Downloads per episode 40,000 30,000 20,000 10,000 0 35,000 Top 1% 20,000 Top 2% 7,800 Top 5% 5,000 Top 7.1% 3,300 Top 10% 1,100 Top 20% 124 Median 29#30Audience size Five Types of Podcast Publishers Publisher Profile Media Companies with Podcast Efforts Podcast-Only Production Companies Large Indies Non-Media Businesses & Non-Profits Hobbyist Creator © 2019 - Andreessen Horowitz Description Larger media companies with a variety of content formats (broadcast radio, newspaper, magazine, etc.). Monetizes podcasts primarily through ads; podcasting can also grow other monetization channels like circulation revenue Podcast production studio creating its own content and distributing on other listening platforms like Apple Podcasts or Spotify. Monetizes mostly through ad revenue, increasingly licensing to TV/film, exclusives with listening platforms Personality-driven talk shows with celebrity/influencer host. Monetizes mostly through donations, ads, and merchandise. Goal behind podcasting initiative is largely brand-building / marketing, rather than driving revenue. Often reliant on working with 3rd party studios to produce content Any individual creating and posting content. Often unmonetized. Examples iHeartMedia (Stuff Media), The New York Times, NPR, Slate, The Washington Post Wondery, Gimlet, Cadence13, WaitWhat Joe Rogan, Sam Harris, Tim Ferriss, etc. Non-profits: Brookings Cafeteria, Tiny Spark, Cold Call (HBS) Businesses: a16z, Duolingo, The Growth Show (Hubspot) Many small creators Median podcast episode has 124 total downloads per episode (Libsyn) 30#31Top Podcasts Snapshot (iTunes, May 2019) Apple Podcasts Ranking 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Show White Lies To Live and Die in LA Crime Junkie Life is Short with Justin Long The Chernobyl Podcast Joe Rogan Experience Dead Ass with Khadeen and Devale Ellis Khadeen Ellis and Devale Ellis Gangster Capitalism Call Her Daddy Root of Evil: The True Story of the Hodel Family and the Black Dahlia Up First The Daily The Bellas Podcast Science Rules! with Bill Nye Dr. Death NPR Source: Apple Podcasts app, accessed 5/15/19 © 2019 - Andreessen Horowitz Tenderfoot TV & Cadence13 Audiochuck/ Ashley Flowers Wondery HBO Joe Rogan C13Originals (Cadence13) Barstool Sports Publisher TNT / Cadence13 NPR The New York Times Endeavor Audio Stitcher & Bill Nye Wondery Publisher Type Media Company (Public Radio) Media Company / Podcast Production Company Business / NPO Podcast Production Company Media Company Large Indie Large Indie Podcast Production Company Media Company Media Company / Podcast Production Company Media Company (Public Radio) Media Company Podcast Production Company (audio division of media conglomerate Endeavor) Podcast Listening App Podcast Production Company Category True Crime True Crime True Crime Talk TV & Film Talk Talk Society & Culture (focusing on Operation Varsity Blues) Comedy True Crime News News Society & Culture Science True Crime Note: iTunes provides continuous rankings of top podcasts overall and in over a dozen different categories. This ranking is based on recent podcast subscriptions rather than audience size, so new podcasts with smaller audiences are frequently ranked higher in iTunes than those with larger, established audiences. 31#32Top 10 Podcast Publishers - a quarter of unique streams/downloads is NPR podcasts RANK 1 2 3 4 5 6 7 8 9 10 PODCAST PUBLISHER NPR iHeartRadio PRX Wondery New York Times WNYC Studios This American Life/Serial Barstool Sports ESPN Daily Wire PODCAST INDUSTRY RANKING HIGHLIGHTS TOP 10 PODCAST PUBLISHERS US AUDIENCE: MARCH 2019 US UNIQUE MONTHLY AUDIENCE GLOBAL DOWNLOADS & STREAMS ACTIVE SHOWS 175,279,000 18,685,000 17,537,000 164,767,000 7,956,000 69,752,000 7,840,000 54,738,000 7,130,000 61,180,000 5,536,000 32,892,000 5,485,000 28,116,000 5,342,000 39,680,000 4,463,000 42,381,000 3,534,000 31,732,000 Source: Podtrac Analytics, March 2019, accessed May 2019. Unique monthly audience © 2019 - Andreessen Horowitz 49 170 70 67 10 55 3 38 61 5 Shows Include: • How I Built This, Planet Money, Hidden Brain • HowStuffWorks, Sleuth, Spit, Business Unusual with Barbara Corcoran • Dirty John, Dr. Death, American History Tellers, Business Wars, Hollywood & Crime and Gladiator • Radiolab, Death, Sex & Money, Snap Judgment, Here's the Thing with Alec • Pardon My Take, KFC Radio, The Pat McAfee Show, Spittin' Chiclets • Ben Shapiro Show, Andrew Klavan Show, The Michael Knowles Show, The Matt Walsh Show 32#33Gender Gap in podcasting Number of US podcasts hosted by at least one.... white male white female non-white male non-white female 150,000 100,000 50,000 0 ATLAS THE FEATURE 10 Source: Quartz, Edison Research © 2019 - Andreessen Horowitz '11 12 Data: Josh Morgan, from US iTunes store data total US podcasts Columbia Journalism Review. Local News Covering Trump Business of Journalism Innovation '13 '14 The voice of journalism '15 Why are #PodcastsSoWhite? Sharo About Donate Membership Magazine Advertise Ce Proportion of US podcasts hosted by at least one... white male white female non-white male non-white female 80% 60 40 20 0 2010 2011 ged 2012 ATLAS Data: Josh Morgan, from US iTunes store data edison research 2013 2014 2015 Women who are familiar with but don't listen to podcasts: 61% Would listen if there were topics they were interested in Share 65% Say "podcasts just aren't for me" 66% Say there are so many podcasts they don't know where to start Source: Podcast Listening Barriers Study, Edison Research 2018 33#34Table of Contents What is the state of the podcast market today? Listeners Listening Apps Podcasters / Publishers Hosting Monetization Biggest exits Startup market map Chinese audio apps Investment thesis © 2019 - Andreessen Horowitz 34#35Podcast hosting is fragmented, with Soundcloud representing 13% of the market Podcast hosting services All time SOURCE: CHARTABLE.COM - PODCAST ANALYTICS AUGUST 18, 2018 Note: Newer stats available here Source: https://chartable.com/blog/top-podcast-hosting-2018 © 2019 - Andreessen Horowitz 1. feeds.soundcloud.com 2. anchor.fm 3. libsyn.com 4. podomatic.com 5. podbean.com 6.blubrry.com 7.spreaker.com 8. wordpress.com 9. squarespace.com 10. blogtalkradio.com 11.ivoox.com 12. feeds.buzzsprout.com 13. librivox.org 14. Other 13.1% 8.7% 7.0% 6.3% 4.3% 4.0% 2.2% 1.6% 1.6% 1.5% 1.3% 1.2% 1.0% 37.2% 35#36However Libsyn has 25% market share among top 400 podcasts Source: https://chartable.com/blog/top-podcast-hosting-2018 © 2019 - Andreessen Horowitz Podcast hosting services Top 400 podcasts charting in US SOURCE: CHARTABLE.COM PODCAST ANALYTICS AUGUST 18, 2018 Note: Newer stats available here 1. libsyn.com 2. art19.com 3. feeds.soundcloud.com 4. megaphone.fm 5. npr.org 6. podbean.com 7. mcsorleys.barstoolsports.com 8. feeds.wnyc.org 9.spreaker.com 10. anchor.fm 11. rss.simplecast.com 12.feeds.buzzsprout.com 13. audioboom.com 14. podcastone.com 15. pippa.io 16. blubrry.com 17. Other 25.5% 15.8% 8.5% 5.8% 4.5% 3.0% 2.0% 2.0% 1.8% 1.5% 1.5% 1.5% 1.5% 1.5% 1.3% 1.3% 21.3% 36#37And Anchor (tagline "easiest way to make a podcast") powers 30% of new podcasts, most of which are long-tail Podcast hosting services Podcasts published in the last 6 months Source: https://chartable.com/blog/top-podcast-hosting-2018 © 2019 - Andreessen Horowitz SOURCE: CHARTABLE.COM - PODCAST ANALYTICS AUGUST 18, 2018 Note: Newer stats available here 1. anchor.fm 2. 3. libsyn.com 4. podbean.com 5. blubrry.com 6. feeds.buzzsprout.com feeds.soundcloud.com 7.spreaker.com 8. wordpress.com 9. squarespace.com 10. radiofrance-podcast.net 11. podomatic.com 12. loyalbooks.com 13. omnycontent.com 14.ivoox.com 15. rss.simplecast.com 16. audioboom.com 17. sermonaudio.com 18. Other 29.7% 11.0% 5.9% 4.4% 3.3% 2.6% 2.4% 1.3% 1.3% 1.1% 1.0% 0.8% 0.7% 0.7% 0.7% 0.6% 0.5% 18.2% Anchor's focus is on making publishing to Apple easy: they publish all shows under their own Apple Podcasts Connect account, so new podcasters don't have to go through the application process (and waiting period) to get their shows listed in the directory. 37#38For podcasts published in the last 6 months with over 10 episodes, Anchor, Soundcloud, and Libsyn have similar market share Podcast hosting services Podcasts published in the last 6 months with >= 10 episodes SOURCE: CHARTABLE.COM - PODCAST ANALYTICS AUGUST 18, 2018 Note: Newer stats available here Source: https://chartable.com/blog/top-podcast-hosting-2018 © 2019 - Andreessen Horowitz 1. anchor.fm 2. feeds.soundcloud.com 3. libsyn.com 4. podbean.com 5. blubrry.com 6.spreaker.com 7.feeds.buzzsprout.com 8. wordpress.com 9. radiofrance-podcast.net 10. squarespace.com 11. omnycontent.com 12. loyalbooks.com 13. podomatic.com 14. sermonaudio.com 15.ivoox.com 16. rss.simplecast.com 17. audioboom.com 18. pippa.io 19. Other 12.4% 10.3% 8.0% 5.8% 4.7% 2.5% 2.4% 2.0% 1.9% 1.4% 1.3% 1.3% 1.3% 1.0% 1.0% 0.8% 0.8% 0.5% 26.4% 38#39Table of Contents What is the state of the podcast market today? Listeners Listening Apps Podcasters/ Publishers Hosting Monetization Biggest exits Startup market map Chinese audio apps Investment thesis © 2019 - Andreessen Horowitz 39#40Monetization Mechanisms (1/2) Examples Ads & Sponsorships Many ads and sponsorships are set up via podcasters and advertisers connecting manually--e.g. through email or web forms ● Midroll (acquired podcast platform Stitcher, acquired by Scripps) is an ad network with 200 advertisers and 250 podcasts with 80M dl/mo ● AdvertiseCast is an ad network with 30M+ monthly listener reach, 1500 podcasts Anchor Sponsorships connects podcasters with brands and is the "first and only podcast advertising platform open to all podcasters and sponsors of all sizes, regardless of how many plays a show gets, or the size of a marketing budget" Source: Company websites as of 5/2019 2019 - Andreessen Horowitz Donations/Tipping According to NPR, 1/3 of public radio revenue comes from individual donations Podcasters use 3rd party platforms including Patreon, PayPal, Venmo, etc. to accept donations. Patreon has over 13K podcasters using the platform. Anchor lets users pledge donations to creators at level of up to $10/mo Himalaya has donations/tipping as a feature. In China, Ximalaya has a tipping feature on a per-creator or per-episode basis RadioPublic has tipping feature inside its listening app: fans can tip any amount up to $100 (for a single donation) in the RadioPublic app which goes to creators ● ● Paid Content Paid content for spoken word audio has precedent in audiobooks ● Acast sells "Show Passes" to certain shows for premium, exclusive content ● Audible Audio Shows can be purchased per series or episode ● True Crime Garage released a bonus episode on iTunes for $2 in June 2017, which rose to #1 on iTunes charts ● Breaker Upstream allows podcasters to charge on a per-episode basis, or subscribe to a show 40#41Monetization Mechanisms (2/2) Examples Branded Content Gimlet collaborated with Ebay, Virgin Atlantic, and Microsoft to produce custom shows The Mission has created branded content with Salesforce, Katerra, Vemo Education, etc. Source: Columbia Journalism Review 2019 - Andreessen Horowitz Subscription/Membership Subscription for spoken word audio is still largely unproven in the US (except audiobooks) ● ● In China, subscription access for a collection of audio shows (Ximalaya VIP content; also offers a la carte purchases of audio books/shows) ● Stitcher Premium, which provides ad-free listening, 40 original shows, and early access to popular podcasts Gimlet members get access to exclusive content and access to a Slack community for $1 lifetime Serial Box combines subscription & paid purchases for audio stories Luminary Media, which launched April 2019, charges $8/mo for access to exclusive content (also has free listening experience for non-exclusive content) ● ● ● ● Other Foundation support Live events (e.g. My Favorite Murder, a popular true crime podcast, has been on tour with sold-out venues across the US) Merchandise (NPR Planet Money t-shirt reportedly sold over $625K) Licensing deals to other content formats, e.g. movies/TV 41#42Podcast ad revenue is growing, estimated to hit $515M in 2019... 2019 Estimate from IAB (Source) © 2019 - Andreessen Horowitz Podcast advertising revenue grew at a double-digit rate from 2015 to 2016, and the growth is forecast to build in 2017. Podcast Advertising Revenues, 2015 - 2017 (in millions) $250 $200 $150 $100 $50 $0 $69 FY 2015 72% IAB Podcast Ad Revenue Study, June 2017 $119 FY 2016 85% Advertising revenues represent the 20 companies surveyed, less than 100% of the podcast advertising market * 2017 revenue is a forecast based upon self-reported estimates $220 FY 2017e* 6 42#43...but industry revenue is still tiny compared to other mediums 2017 U.S. ad spending Internet $69.2B Television $68.5B Radio $17.6B Newspapers $16.6B Magazines $15.4B Outdoor $9.7B Cinema $0.9B Podcasts $0.3B Source: Zenith (all media except podcasts), IAB and PWC (podcasts) via Recode https://www.vox.com/2018/6/11/17448802/podcast-advertising-2017-iab-small © 2019 - Andreessen Horowitz 43#44Podcasts monetize at only $0.01 per listener hour, on average, 10x less than radio Podcasts Radio TV Active Users 73,000,000 243,000,000 301,000,000 Internet 290,000,000 Magazines 216,500,000 Newspapers 169,000,000 Source: Nielsen via HackerNoon © 2019 - Andreessen Horowitz Hours per Year per Active User 364 702 1,872 1,248 135 138 Annual Ad Revenue $310,000,000 $18,200,000,000 $71,000,000,000 $86,400,000,000 $16,600,000,000 $16,800,000,000 Average Revenue per Active User per Hour $0.01 $0.11 $0.13 $0.24 $0.57 $0.72 44#45Lag in monetization isn't due to lack of efficacy of ads Nielsen study found that pre-roll podcast ads increased purchase intent by 10.8%, slightly higher than the 10.3% lift from video ads Midroll Media's survey of nearly 170,000 podcast listeners found that 61% of listeners report buying a product they heard about on a podcast ad Anecdotally, speaking to advertisers who have purchased podcast ads, it's effective Source: Nielsen via HackerNoon, Midroll Media © 2019 - Andreessen Horowitz 45#46Drivers of Low Podcast Monetization ● Lack of monetization tools on dominant platform With Apple Podcasts, brands and podcasts have to connect off-platform Other podcast platforms have launched monetization programs to solve this (e.g. RadioPublic's Paid Listens platform) Long tail is not monetized O Most advertisers only work with podcasts that have 50k+ monthly downloads Ad delivery unclear O For live read ads & server-side delivered ads, downloads is used to proxy delivered ads, but not all downloads are played Client-side delivered ads is impossible to implement with most podcast players Detailed listener data not available Apple only gives basic data on listeners, devices, and time listened per session Lack of precision targeting like on YT and FB © 2019 - Andreessen Horowitz 46#47Today, podcast monetization is predominantly through direct response advertising, with ads read by hosts % of Ads Read by Host Supplied by 0.5% Read by a Separate 32.5% Source: Recode © 2019 - Andreessen Horowitz Read by Host 67.0% Type of Ads % Other 36.0% Host talks about a product and gives a discount code % Direct Response 64.0% 47#48Podcast ad attribution is rudimentary Current common methods of attribution: Vanity URLs O E.g. www.casper.com/<podcast> Promo Codes E.g. promo code RECODE25 at checkout for a special offer Surveys Asking users at the point of signup or afterwards, "How did you hear about us?" Source: RHS: https://www.radiotopia.fm/sponsoroffers © 2019 - Andreessen Horowitz Current Sponsors and Offers We love our sponsors! Thanks for supporting them as they help keep the lights on here at Radiotopia. We've listed all current sponsor offers by show below: 99% INVISIBLE • Article Get $50 off your first order of $100 or more at article.com/99 Calm To get 25% off a Calm Premium subscription, including unlimited access to ALL of their content, go to calm.com/invisible. • Griddy Text PODCAST to 48-48-48 and Griddy will give you your first month's membership FREE • HelloFresh Canada For 50% off your first box, visit hellofresh.ca/podcasts and enter promo code PRX when you subscribe. HelloFresh US For a total of $60 off, that's $20 off your first 3 boxes, visit HelloFresh.com/invisible60 and enter INVISIBLE60 • Linkedin Go to Linkedin.com/INVISIBLE to redeem a free $100 LinkedIn ad credit. • Robinhood Robinhood is giving listeners a FREE stock to help build your portfolio! Sign up at invisible robinhood.com • Rode Microphones Go to rodecaster.com to learn more and find your local stockist. • Simplisafe Protect your home today and get free shipping at SimpliSafe.com/99 Slack With Slack, your team is better connected. Find out more at slack.com • Squarespace Try Squarespace.com/INVISIBLE for a free trial and when you're ready to launch, use the offer code INVISIBLE to save 10% off your first purchase of a website or domain. • Ting Lower your phone bill at invisible.ting.com and get $25 in Ting credit or $25 off a new phone in the Ting Shop. Toyota Visit BuyAToyota.com to locate a dealer, search our inventory, and find all our current offers! • Wealthsimple Canada 99% Invisible listeners get their first $10,000 managed free at wealthsimple.com/99 • ZipRecruiter Show your support for 99% Invisible and ZipRecruiter by going to ZipRecruiter.com/99 THE ALLUSIONIST • Babbel Go to Babbel.com or download the app and try it for free! • Bombas Buy your Bombas at bombas.com/allusionist today, and get twenty percent off your first purchase. • Molekule For $75 off your first order, visit molekule.com and at checkout enter ALLUSIONIST. • Squarespace Check out Squarespace.com/allusion for a free trial and when you're ready launch, use the offer code ALLUSION to save 10% off your first purchase of a website or domain. CRIMINAL • Article Visit article.com/criminal to get $50 off your first purchase of $100 or more. Bougs Go to Bougs.com and enter CRIMINAL for 20% off. • Griddy Text Criminal to 79-79-79 Griddy will give you your first month's membership FREE. • HelloFresh Canada For 50% off your first box, visit hellofresh.ca/podcasts and enter promo code PRX when you subscribe. • Quip Go to GetQuip.com/Criminal right now and get your first refill pack FREE with a QUIP electric toothbrush. • Robinhood Robinhood is giving listeners a FREE stock to help build your portfolio! Sign up at criminal.robinhood.com • Simplianfe Learn more about how SimpliSafe can help you protect your home at SimpliSafe.com/criminal • Squarespace Try Squarespace.com/criminal for a free trial and when you're ready to launch, use the offer code CRIMINAL to save 10% off your first purchase of a website or domain. • Sun Basket Go to SUNBASKET.com and enter promo code CRIMINAL60 today to get 60% off your first order! • Toyota Visit BuyAToyota.com to locate a dealer, search our inventory, and find all our current offers! • Wealthsimple Canada PRX listeners get their first $10,000 managed free at wealthsimple.com/PRX • ZipRecruiter Try ZipRecruiter for free at ZipRecruiter.com/criminal. 48#49Despite these issues, podcasts command a premium CPM of $25-50 (based on downloads) because they work Due to poor analytics around listeners, podcast ads are typically priced on a CPM basis based on the # of downloads per episode O In 2017, Apple began to give creators analytics around aggregated, anonymized performance data--# of plays, which parts they listen to, skip, and when they drop off. Previously, Apple just provided data on the number of downloads per episode CPM: Rates can range from $25 to $50, and the highest performing shows can cost even more © 2019 - Andreessen Horowitz 49#50Podcast Advertising Basics: Types of Ads Live Read vs. Recorded Read Live read: host integrates product into the current episode in an authentic way Recorded read: host pre-records an audio commercial that is played during a specific time slot in the podcast episode Pre-roll, mid-roll, post-roll The most valuable spot for a podcast ad is the mid-roll because that is when listeners are most engaged with the content and are least likely to skip through Dynamic insertion vs. baked in Baked in ads live in the show's content forever Dynamic: prerecorded reads are integrated into show's breaks using a programmatic ad-buying platform Dynamic insertion ads accounted for 56% of spend in 2016 Source: https://medium.com/@justinemoore 85088/the-future-of-podcasting-how-do-podcasts-make-monev-d5f529433f83 © 2019 - Andreessen Horowitz 50#51How much are podcasters making? Over 13K podcasters use Patreon Top podcaster is Chapo Trap House, an American political and humor podcast, which earns over $131K per month from almost 30K patrons (with ~9 podcasts/mo, $4.47/mo/patron) Rough Estimates of Revenue Per Episode: Assumptions: Top 1% Top 2% Top 5% Top 7.1% Top 10% Top 20% Median Patreon (2% of audience gives $5/month) Sponsors (>5K DL/episode) at $25 CPM, 1 sponsor/episode Downloads 35,000 20,000 7,800 5,000 3,300 1,100 124 Total Revenue per Episode $4,375 $2,500 $975 $625 $330 $110 $12 Patreon $3,500 $2,000 $780 $500 $330 $110 $12 Sponsors $875 $500 $195 $125 $0 $0 $0 Revenue per Podcast Episode 40000 30000 20000 10000 0 35,000 $4,375 Top 1% 20,000 $2,500 Top 2% Source: Podcast download distribution from Libsyn, Jan 2019, Patreon earnings data from https://graphtreon.com/top-patreon-creators/podcasts © 2019 - Andreessen Horowitz Downloads 7,800 $975 Top 5% Revenue per Episode 5,000 $625 Top 7.1% 3,300 $330 Top 10% 1,100. $110 Top 20% 124 $12 Median 51#52How much are podcasters making? Notable Examples: NYT's The Daily estimated to book low-8 figures in ad revenue in 2018. Had 5M listeners/mo, 1M daily as of 7/2018, so ~$2-10/listener. For context, the NYT made $709M digital revenue in 2018 Tim Ferriss has written that "If I wanted to fully monetize the show at my current rates, I could make between $2-4M per year, depending on how many episodes ("eps") and spots I offer." Source: https://www.vanityfair.com/news/2018/07/how-the-daily-michael-barbaro-became-the-ira-glass-of-new-york-times https://tim.blog/2016/04/11/tim-ferriss-podcast-business/ © 2019 - Andreessen Horowitz 52#53Table of Contents What is the state of the podcast market today? Listeners Listening Apps Podcasters/ Publishers Hosting O Monetization Biggest exits Startup market map Chinese audio apps Investment thesis © 2019 - Andreessen Horowitz 53#54Significant Exits in the Last 5 Years (1/2) Company Gimlet Media -founded: 2014 -hq: Brooklyn Anchor FM founded: 2015 -hq: NYC Stuff Media -founded: 1998 - hq: Atlanta Midroll Media - founded: 2013 - HQ: LA Swell founded: 2012 - hq: Mountain View Stitcher founded 2007 - HQ: SF Type of Company Production studio Podcast creation / hosting platform Production studio Ad network Listening app Listening app Source: Pitchbook, company websites Andreessen Horowitz Description Production studio behind top podcasts like Reply All, StartUp (which chronicled starting up Gimlet), and Crimetown. Has stated it's exploring originals and windowing with Spotify post-acq Simple podcast creation & distribution platform. Makes podcasting more accessible to hobbyists and individuals who are new to the medium Podcast production studio with 25 podcast shows. Spinout of HowStuffWorks, an infotainment website. "Stuff You Should Know" was first podcast ever to surpass 500M downloads Podcast advertising, production, distribution, and monetization services to creators. Personalized app for news radio listening, with content from ABC, NPR, RPI, TED, and others. Shut down post-acquisition. Podcasting listening app. Offers $5/mo premium experience with no ads, bonus episodes, and exclusive originals. Acquisition Size ~$225M (2/2019) ~$110M (2/2019) $55M (9/2018) $60M (7/2015) $30M (7/2014) $4.5M (6/2016), 2 years after acq. by Deezer Acquirer SCRIPPS SCRIPPS Spotify Spotify iHeartMedia E.W. Scripps Apple E.W. Scripps Total Funding $28M from WPP, Betaworks, Lowercase, Andrew Mason $14M from GV, Accel, Eniac, SV Angel, Betaworks $15M from Raine (2015) -prev parent company (HowStuffWorks) was acq by Blucora for $45M (2014) and Discovery Communication for $250M (2007) Formed from merger of comedy podcasting network Earwolf with podcasting ad network The Mid Roll in 2014. $7.5M from GV, CRV, a16z, Dave Morin, Correlation, Kevin Colleran, Sam Lessin, Jason Calacanis, Draper Nexus $22.3M from Benchmark, Great Oaks, NEA, Ron Conway, NAV.VC, Sandwith VC. Previously acquired by Deezer in Oct. 2014 for undisclosed amt. 54#55Significant Exits in Last 5 Years (2/2) Company Parcast - founded 2016 HQ: LA 60db - founded: 2016 -hq: SF Castro founded: 1998 - hq: Dublin Pocket Casts - founded: 2010 - hq: Adelaide, Australia Type of Company Andreessen Horowitz Production studio Listening app Listening app Listening app Source: Pitchbook, company websites Description Podcast production studio known best for true-crime and other scripted serials across mystery, sci-fi and history genres - 18 series to date, 20 in pipeline - titles include Serial Killers and Unsolved Murders Personalized short-form audio app. Shut down post-acquisition. Podcast listening app for iOS with enhanced audio and paid features ($9/yr, trim silence, enhance voices). Podcast listening app designed to work across platforms (iOS, Android, web) with better discovery & search. Acquisition Size Reportedly $100M (3/2019) undisclosed (10/2017) undisclosed (11/2018) undisclosed (5/2018) Acquirer Spotify G Google G Tiny Capital Collective Group (NPR, WNYC, WBEZ Chicago, This American Life) unfunded $3.5M from Khosla, Bloomberg Beta unfunded Total Funding unfunded 55#56Investments in podcasting companies have exploded in the past few years Podcasting Investments Over Time (Source: Pitchbook) 250 200 150 100 50 0 2 $7 1 2010 7 2011 $35 5 $33 $19 10 $92 2012 2013 2014 2015 Source: Pitchbook. Methodology: Filtered by "Podcasting" keyword, privately-held companies, accessed 5/15/19 © 2019 - Andreessen Horowitz 13 13 $40 2016 $161 23 2017 $203 29 $88 2018 2019 Deal Count (VC) Capital Raised ($ million) 56#57Market Map: Audio Companies Consumer Listening Apps for General Podcast Content a cast Breaker Brew Hi. Castbox Entale himalaya KIDS Note: Not comprehensive © 2019 - Andreessen Horowitz Luminary Overcast Player FM Pocket Casts The Podcast App Swoot Vertical Consumer Audio Apps Written Word (Books/Articles) audible Audm Blinkist Curio Serialized Fiction SERIAL BOX ASMR TINGLES Fitness ><Aaptiv CP GO IL FITRADIO MOVEWITH Meditation 10% Calm HEADSPACEⓇ SIMPLE HABIT Women's Wellness DIPSEA Podcast Production Companies Cadence13 Gimlet MMISSION.ORG STUFFED Wait, What? WESTERN SOUND WONDERY 57#58Table of Contents What is the state of the podcast market today? Listeners O Listening Apps O Podcasters / Publishers O Hosting O Monetization Biggest exits Startup market map Chinese audio apps Investment thesis © 2019 - Andreessen Horowitz 58#59Chinese Podcast Market Breakdown Why are users listening on audio platforms? (Apr 2018) Others (13%) To learn (15%) For entertainment (72%) Source: iiMedia, WalktheChat Analysis Age of Chinese audio app users (Jan 2018) 36-40 (9%) 31-35 (15%) >41 (12%) 25-30 (27%) Source: iiMedia, WalktheChat Analysis Source: https://walkthechat.com/ximalaya-dedao-boom-chinese-paid-audio-content/ © 2019 - Andreessen Horowitz <24 (38%) Douban Time (2%) Hetao Live (7%) Best selling audio content by platform (Nov 2017) Qingting (9%) ¡Get (15%) Others (8%) 36 Kr 36 (2%) Source: Analysys, Xinzhibang, WalktheChat Analysis Ximalaya 喜马拉雅 (57%) 59#60Ximalaya FM Fundraising: Total amount raised: ~$720M. Last round was a $580M Series E with a $3.6B valuation by Tencent, Goldman Sachs, General Atlantic in August 2018 Traction: 530M total users, 7M+ hosts (Q1 2019), 80M MAU (Q2 2018) Description: Price: O Ximalaya launched in March 2013 with the slogan of "Everything on earth with a sound" ( ). Their signature product is audio content in every form from podcasts, courses, audiobooks, live streams, spoken word, singing, to even film dubbing. While Ximalaya advertises over 100M pieces of free content, the number of pieces of paid audio content available has increased from 310,000 in 2017 to 1.38M in 2018. Ximalaya has hosted an annual 'Knowledge Carnival' since 2016 - a Black Friday for audio content. In 2018 the platform's one-day sales were US$64M, up from $7M in 2016. A monthly membership is 20 RMB ($3) and includes access to over 4000 audiobooks, 1000 book explanations, and 300 top influencer podcasts/courses. Paid courses are primarily 19 RMB ($2.80) / course to 199 RMB / course ($30). Members get a 5% discount on all paid courses that are not included with their membership. Free podcasts and live streams are supported by advertising and tipping. Ximalaya has stated that they earn more revenue from paid courses than advertising. © 2019 - Andreessen Horowitz 3:27M X 推荐 +FIR VIP 小说直播儿童 本地 Q 米小圈上学记一二三年级 世上的一切。 都与性有关 李银河敢说,你敢听吗? 立即收听 经典必听 每日必听 深夜助眠 猜你喜欢 檀 14.00 ►4556.875 檀谈「商业财经」 6 虎嗅 C 我听 新版个人征信报告将上线 拖欠水费也可能... | 听头条 > 8 精品 *Kr GAUDI . 8点1氪 85% 198 78.33 45 EXE BOTAS DE 18 23.90 33:21 1.0 34 +67.32 3.8 《李银河说爱情】 发现 + 8 小雅新品 选择兴趣 更多> 1618. ►2.512 雪球:聪明的投资完每天听见吴晓 者都在听 波 +76.33 账号 60#61Ximalaya Stats 45.00% 40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% 20.52% Children NANJING MARKETING GROUP 14% XIMALAYA PAID COURSES (NOV 2018) Education 5% 17.95% 33% 4% 38.46% 2017-2018 MONTHLY AVERAGE COST DISTRIBUTION OF ONLINE AUDIO USERS IN CHINA 10% History 15.38% 34% Business NANJING MARKETING GROUP 7.69% Language course Less than 10 CNY 11 to 20 CNY 21 to 30 CNY 31 to 40 CNY 41 to 50 CNY More than 50 CNY Source: https://www.nanjingmarketinggroup.com/blog/chinese-podcast-monetization © 2019 - Andreessen Horowitz 80.00 % 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Audiobook 12.59% Children PAID CATEGORIES ON XIMALAYA (NOV 2018) 22.21% 28.66% 4.17% Education 4.08% 5.43%, History XIMALAYA AGE DISTRIBUTION 14.75% Business 28.96 % 1.66% NANJING MARKETING GROUP 1.31% Language course Other 40 years old and above ■36 to 40 years old ■31 to 35 years old 25 to 30 years old 24 years old and below NANTING MARKETINU 61#62Ximalaya Leaderboards © 2019 - Andreessen Horowitz < Free — 免费榜 Hot 热门 Trending Audiobooks Stand-up (xiangsheng) Children Culture History Music Education Foreign languages Entertainment Lifestyle Business News 1:32. - 有声书 相声评书 儿童 人文 历史 音乐 教育培训 外语 娱乐 情感生活 商业财经 头条 飙升榜 1 3. 5 4 说地 6 他向、于谦 2018持续更新 排行榜 畅销榜 VIP 热听榜 读者 */ TE100% 郭| 官方正版|郭德纲21年相声, 慈 爆料不断 网 爆料不断的历年经典相声 5.6亿153集 鲜问 快报 订阅榜 “钢丝”必追!郭德纲高清相声 (每周更新) 郭德纲作品持续更新 | D 8147万 71集 读者 发掘人性中的真善美,每日分.... > 3.6亿 1658集 晓说2018 高晓松说历史人物、聊八卦文化 32.6亿+49集 鲜快报 全网热门资讯,第一时间为你... D 3.4亿 4412集 治愈千万人的《蕊希电台》 给深夜归家的人安抚和感动 治愈情感|最暖心主播陪你入睡 441集 Top by sales •VIP (membership) Top by subscribers Top by reviews(not visible) Top hosts (not visible) 62#63Ximalaya Categorized Tabs Sort by category (educational, songs, sleep, etc) Classic stories Andreessen Horowitz Kids Audio Feed 12:23MF ♥ . vie 小说 直播 儿童镇江广播精品 Q 故事 儿歌 ▽ 筛选 Q 白雪公主 排行榜 科普 银 育儿 嗨翻 校园 小学生人手一册 故事开智 装在口袋里的爸爸 首页 哄睡 我听 国学 精选 故事 动画 学科 29 84% 儿歌 小月姐姐 装在口袋里的爸爸..… 周锐 | 呼妹妹的弄堂 小月姐姐|儿童必听... 拇指大的爸爸和小学生 原创儿童文学大系 【爸妈必备】 宝宝情商 儿子的神奇遭遇 宝典大礼包 英语 发现 ▲ |鼠皮皮的小快乐 3 3~6岁 → Select baby age Sort by category (pronunciation, exams, speeches, etc) 账号 Daily English content English Learning Feed 12:15 听多· 1986% 教育培训 情感生活 英语 商业财经 | 好书精讲 .. Q 十宗罪 Q 听力 口语 筛选 百听不厌的美剧课 全新解读的《老友记》 这个版本有点野 排行榜 少儿 早安英语 实用口语 首页 口语 我听 入门 教材 演讲 Jenny 开出英语情始人 mpe百万TE 马上学习E 查看全部 > 【知识】母亲节是谁发明的? 【词汇】母亲节的由来和词根 【口语】那些可以对妈妈说的英文句子 【表达】如何用英文花式「拍妈屁」! 【歌曲】Beyond《真的爱你》,原来是唱给母亲的 考试 发现 精品 > 收听全部 更多> 账号 63#64Ximalaya Social Audio Features Talk Show Live Stream Host 8 guests Andreessen Horowitz 4:03 听 甜蜜派对ii FM 2242972 ·在线: 16 参与:620 喜爱值 11,023,177 甜蜜派398人> ACDC PH 408 Look静兮 Look苏萌 Look刘大仙 2 Look佳音 Look晴晴 @ 13 甜蜜派 0 @周文儒 今天要办事,不盘 关注 大西洋西的兔子 寅@13 ※ @Look_思蜜 开宝箱 1x230606m6261 @大西洋西的兔子 不对 还给你说 晚上好才对 说点什么... 送出招财猫 x1 Cook 上表 Look_恩蜜 ③0 LTE 78% 0 Look.咖啡 2贵族 话题 Look_依依 03 Look安心儿 520 爱神降Ÿ ·爱神CP 即护气场 萌新主持 82 T Sort by category (singing, games, poetry, etc) Content (sort by followed, suggested, or private groups Join live stream Send virtual gifts to host Dedicated Social Tab 11:57。听 11:87 看小说 全民朗读 |g #镜头下520瞬间# #拯救不懂抢答赛# 首页 . 凶? 04:06 | 4.8万次播放 我听 发现 K歌房 关注 推荐 JerryKowal我是郭杰瑞 你可能感兴趣的内容 街访美国铲屎官,宠物领养真的比购买更好吗? NJ林—— 你可能感兴趣的内容 11 1 BE 喜马土拨鼠 娱乐派对 #初夏福利季# #为爱发声,与爱同行 趣配音 越来越多人领养宠物 12 011 90% ]] 发现 圈子 +关注 听 喜马拉雅 凸 122 +关注 + 未登录 活 Trending hashtags 64#65Table of Contents What is the state of the podcast market today? Listeners O Listening Apps O Podcasters / Publishers O Hosting O Monetization Biggest exits Startup market map Chinese audio apps Investment thesis © 2019 - Andreessen Horowitz 65#66"If you think of audio as the way you think of, say, film, like we're still in the black-and-white period of podcasting. What's color going to look like? What's 3-D going to look like?" © 2019 - Andreessen Horowitz Today, Explained host Sean Rameswaram on Recode Decode 66#67What characteristics should we look for in an investment? Focus on audio content broadly, rather than exclusively podcasts Network effects Full-stack startups that own the consumer listening app, content, and monetization -- which creates a better feedback loop High-quality differentiated content vs. large incumbents which have broad, free libraries of shallower content Consumption experience that is fundamentally different and enhances the experience of the audio content: could be live, social audio or value-add features that support stickiness and engagement Alternative monetization beyond solely ads © 2019 - Andreessen Horowitz 67#68Request for Startups Full-Stack Platform for Paid, Exclusive Audio Content ● Platform creating premium, exclusive audio content in areas where there is high propensity to pay: Like standalone educational video platforms that have successfully monetized in the US, there's an opportunity to create in-depth audio content that users may be willing to pay for, that are more educational/ self-improvement-oriented ● Examples: O Aaptiv (fitness audio app) reached $20M revenue in 2 years O Calm (meditation & sleep audio) reached $150M revenue run rate in 2018 An Edison Research/Knight Foundation study of public radio consumers found that these listeners had "a stronger preference for fewer stories/greater depth (41%) than a wide variety of shorter segments (10%) Value-add features tailored to a specific vertical to enhance stickiness and engagement © 2019 - Andreessen Horowitz Social Audio Social audio platform with interactivity (user <--> user, creator) and UGC Social needs to be core to the experience rather than optional layer on top of existing free podcast content, which isn't enough to attract critical mass of users Known Brands Launching Own Platforms for Podcasts Opportunity for major podcast publishers & well-known brands to create owned platform for distributing their own content Influential podcast publishers with large follower bases could create a podcast platform with better monetization, given their brands and followings Startup opportunity for turnkey platform to help creators distribute and monetize content Existing examples of media brands who have created their own properties: Slate Plus, The Athletic (paywalled podcast product), BBC Sounds 68