NYT buys The Athletic + 4 more stories on The Download for Jan 7, 2022
This is The Download from Sounds Profitable, the most important business news from the world of podcasting, I'm Bryan Barletta.
And I'm Evo Terra. Today, The New York Times Bets half a billion on sports, NPR doubles down on paid subscriptions, Spotify goes all-in on in-app digital ads, and I'm clearly making too many gambling references. Let's get started.
NYT buys The Athletic
The New York Times has agreed to purchase the sports news company, the Athletic, for $550m. The six-year-old company, which raised $50m in 2020 at a $500m valuation, was originally in talks to sell to the New York Times last summer, but the deal fell through due to disagreements on price. With the New York Times focusing heavily on subscription content and on audio with their new app, called obviously enough "New York Times Audio", acquiring the Athletic with their 1.2m paid subscribers, which is 1/8th the total subscriptions the New York Times has, puts them on track to easily exceed their goal of 10m subscribers.
Currently, the Athletic is hosted on Megaphone, part of Spotify, and participates in the Spotify Audience Network. The New York Times hosts on Simplecast, part of Adswizz, which also offers a competing monetization product. Whether we see The Athletic migrate to Simplecast or not likely depends on how integrated the two companies will be with each other.
AdvertiseCast has updated their Industry Average Podcast Advertising Rates page as of January 1st, 2022. AdvertiseCast has been tracking the average CPM rates for their client podcasts since the beginning of 2020, grouping the rates charged by podcasts into three buckets—shows getting less than 10,000 downloads per month, shows getting between 10,000 and 100,000, and those seeing more than 100,000 downloads per month.
And it's good news, with the average CPM of all groups at just under $24, up nearly 6% comparing December 2021 to December 2020. And the biggest shows saw an even higher increase, jumping up by more than 8% year over year.
The takeaway here is clear: The actual value—not just the perceived value, but the actual value paid by advertisers on 2,412 podcasts in this sample size, is going up for podcast advertising.
Reviewing the programmatic mergers and acquisitions that James Hercher of AdExchanger pointed out this week, there’s a lot of trends happening in channels outside of podcasting that bode well for our industry.
“Historically, DSPs and SSPs have been kept separate from ad server businesses. Ad servers are the source of reconciliation data, meaning they decide whether ads were served or visible and whether advertisers should pay for an impression. Although walled gardens can often get away with bundling an ad server and grading their own homework, open programmatic companies generally could not. But SSPs need an ad server for CTV.”
This need has been echoed in podcasting for quite some time. Companies like Triton Digital and Adswizz offer publishers both adserving and SSP capabilities in one package.
Similarly, verification vendors like DoubleVerify and Integral Ad Science, whose technology relies on client-side execution to verify ads, have each purchased contextual advertising companies to further their offering. Contextual verification is the easiest path for these vendors to enter the podcast space, enabling their clients to validate their purchased podcast inventory.
Axios reports that NPR is taking another run at monetizing their podcasting efforts, working with premium podcast provider Supporting Cast to launch NPR+. The broadcaster plans to add a slate of new shows as well as subscriber-only episodes, including "podcast bundles" as incentives to listeners who become members of local NPR affiliates.
Quoting from the article:
"Subscription podcasting offers a new digital business model for NPR and its member stations. But its long-standing mission to inform the public limits how much content the non-profit can put behind a paywall."
"NPR has been experimenting with podcasts for well over a decade, but it's pushing more aggressively to produce podcasts, particularly daily shows, that it can include in subscription efforts."
"Podcast subscriptions will be used to drive revenue from loyalists who want to support their favorite shows and hosts, similar to radio memberships."
"It's about the relationship that our journalists, our producers, our editors have with their audiences and their ability to create and craft new relationships," said Sarah Gilbert, vice president for news programming."
The new NPR+ service is already live, with nine shows available at the time of this recording, each going for $2.99 per month.
Spotify has released their take on a companion ad to accompany their streaming ad insertion offering, called CTA Cards. The unit works by providing a size-variable, banner-like ad, served only to listeners of Spotify's original and exclusive podcasts, and only to users of the Spotify mobile app.
What’s unique about this ad unit is its staying power. The ad—or "card"—will be visible to the listener on both the episode and show pages for seven days or until the end of the campaign, whichever is shorter. This feature isn’t yet available to publishers who use Spotify Audience Network through Megaphone or Anchor, nor is it available to any publisher directly selling their inventory.
Spotify is straddling the walled garden of advertising with their in-app streaming audio offering and their mainstream podcast advertising through dynamic ad insertion. But as they release more unique ad features solely to users of their mobile app, it will be interesting to see how Spotify responds to listener pushback for selling and running ads for their Spotify Premium customers who have paid for ad-free listening.
And that was The Download, from Sounds Profitable! I know we went through these fast, so be sure to check out the links to every article mentioned right in your podcast listening app. And thanks for sticking with us on this grand experiment to give you the best stories you migh have missed from this week. I'm Evo Terra.
I'm Bryan Barletta. Thanks for joining us. Robot?