SiriusXM to Acquire “Freakonomics Radio” Producer
New York-based SiriusXM is set to buy Stitcher, a major podcast network, as the rapidly growing industry continues to attract bigger players, sources said.
The satellite radio powerhouse is in advanced talks to buy Stitcher from EW Scripps Co. for around $ 300 million, though the amount may change as the deal has not been reached, according to two people familiar with the matter who do not were not allowed to comment.
If the $ 300 million price tag is hit, that would be considered the biggest deal to date in the podcast industry and a sign of how quickly the internet radio business has taken off in recent years.
SiriusXM is looking to strengthen its presence as competitors such as Spotify and iHeartRadio have stepped up their investments in the space. In 2018, iHeartRadio acquired Atlanta-based podcast publisher Stuff Media for $ 55 million, and last year Spotify bought several podcast-related companies, including New York-based Gimlet Media, for around $ 230 million. of dollars.
SiriusXM declined to comment. A spokeswoman for Stitcher did not return a request for comment.
Prior to the novel coronavirus outbreak, the podcast industry had seen strong growth as more and more consumers turned to digital radio for entertainment, news, and cultural discussions.
With its expected acquisition of Stitcher, SiriusXM will expand its total audience size to more than 150 million listeners, according to a person familiar with the matter.
SiriusXM, known for its subscription satellite radio programs like “The Howard Stern Show,” has extended its reach. In 2018, the company purchased the streaming music service Pandora in a stock transaction valued at approximately $ 3.5 billion.
Last year, Walt Disney Co.’s Marvel Entertainment agreed to provide exclusive podcasts for SiriusXM’s satellite radio and streaming services. And the company recently acquired the Simplecast podcast management platform.
The Stitcher deal, however, would give SiriusXM a much bigger footprint in podcasting and a bigger chunk of the lucrative advertising dollars it attracts.
“It’s just another indication that the bigger the better,” said Norman Pattiz, president of PodcastOne, a Beverly Hills podcast company. “It is important for SiriusXM to be able to enter into such an agreement to remain competitive with Spotify and other music platforms.”
Pattiz’s own company was recently acquired by LiveXLive Media Inc. in an all-stock transaction. Part of the reason for the acquisition was to add the video to the company’s offerings, Pattiz said.
“Now we can all go to advertisers and provide them with a larger audience and cross platforms,” he added.
Stitcher is based in New York City but has offices in Los Angeles and San Francisco, and was acquired by EW Scripps Co. in 2016 for $ 4.5 million. Scripps operates 60 TV channels that have been hit hard by declining advertising revenue due to the pandemic.
Stitcher is seen as a positive point for EW Scripps. The network creates original podcasts and is known for programs such as “Freakonomics Radio”, “How Did This Get Made?” and “Conan O’Brien needs a friend.” The company has its own app that offers free access to shows, as well as a subscription program for exclusive, ad-free content. Stitcher also operates the Midroll Media advertising network which connects podcasters with advertisers.
Last year, Stitcher achieved $ 72.5 million in revenue, up 42% from 2018, due to growth in advertising, EW Scripps Co. said in its report. annual.
News of the deal was first reported by the The Wall Street Journal.