Some are calling it the second golden age of audio.
Podcasting, once viewed as a niche industry that catered to public radio fans, got a major boost this month when Swedish streaming giant Spotify agreed to pay around $230 million for Gimlet Media, the New York producer of such audio dramas as “Homecoming” and the documentary series “Crimetown.”
The deal — the largest to date — comes during a period of rapid growth in podcasting and could transform the industry in much the same way that Netflix changed television, analysts and executives said.
Spotify’s venture into the business is expected to bolster the value of podcast businesses, generate higher licensing fees for producers and potentially create a more consumer-friendly model built around subscriptions rather than advertising revenue.
“It sends a signal that podcasting’s time has come in a big way,” said Kelli Richards, chief executive of All Access Group, a digital music and entertainment consultancy.
“You are going to see a frenzy of more podcasters entering the system.”
The surge probably will prompt a wave of consolidations in a crowded market that already boasts more than 550,000 podcasts worldwide on Apple’s Podcasts app, one of the most popular ways to discover programs.
Newer podcasts will need to work harder to get discovered, said Oren Rosenbaum, head of emerging platforms at United Talent Agency. The agency represents more than 50 podcast creators or companies.
“It is getting tougher and more challenging,” Rosenbaum said.
BuzzFeed fired members of its podcast team, while other companies, such as San Antonio-based iHeartMedia Inc. have expanded their footprint, purchasing Atlanta-based Stuff Media, one of the nation’s largest podcast publishers, for $55 million last year.
Podcasts are expected to take in $514.5 million in ad dollars this year, up 28 percent from 2018, according to Interactive Advertising Bureau and PwC.
That boost has helped fuel Southern California podcast companies such as Beverly Hills, Calif.-based PodcastOne, which will take in about $40 million in revenue this year, up 25 percent from 2018, said Executive Chairman Norm Pattiz.
“People listen to podcasts from start to finish,” Pattiz said. “If they can’t do it in one sitting, they hit the pause button. They can consume it whenever and wherever they want.”
Last year, about 73 million Americans tuned in to podcasts each month, with many concentrated in metropolitan areas such as New York and Los Angeles, according to Edison Research and podcast analytics firm Podtrac.
Part of the growth has been fueled by celebrities such as Remi Cruz and Alisha Marie, who last year launched an L.A.-based podcast about their lives called “Pretty Basic,” in which they discuss such topics as dating and fitness.
The podcast has helped them gain new fans beyond YouTube, generating more than five million downloads. It’s produced by Ramble, a joint venture of New York-based podcast company Cadence13 and United Talent Agency.
“It feels very intimate,” the 24-year-old Cruz said.
Fans have tweeted saying they felt as if they “were in the room with us,” she said.
Southern California hosts more than two dozen podcasting companies.
“We’re going to see a huge jump in 2019” in awareness and audience, said Pod People founder Rachael King. “It’s a combination of technology getting better and bigger players getting into the game.”
Podcasting took off in 2005, when Apple made more than 3,000 podcasts available for free on iTunes. Digital audio files became even more widespread seven years later when Apple launched its Podcasts app.
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Hollywood took notice in 2014 after the success of “Serial,” a popular podcast that investigates whether convicted murderer Adnan Syed really killed his high school ex-girlfriend.
Venture capital firms poured money into start-ups, including Gimlet Media and West Hollywood-based Wondery, that created narrative programs similar to “Serial” that could be licensed for TV shows.