As anticipated, SiriusXM has acquired podcasting platform Stitcher. But it’s performed so for much more cash than predicted.
Last week, the Wall Street Journal bought the inside track that Sirius was set to purchase Stitcher from media firm E.W Scripps, for a value in the area of $300m.
Today (July 13), SiriusXM confirmed the deal. It has agreed to make a money cost of $265 million to Scripps, together with a possible $60 million in extra contingent funds based mostly on Stitcher reaching sure monetary metrics in 2020 and 2021.
The transaction is predicted to shut in the third quarter of 2020, topic to receipt of required regulatory approvals.
The Stitcher app aggregates over 350,000 exhibits and over 7 million episodes for podcast listeners. It’s free, with a $4.99-per-month Premium ad-free subscription providing.
Stitcher additionally commissions/producers its personal ‘Originals’ podcasts – equivalent to Freakonomics Radio – and acts as an advert gross sales associate to third-parties.
Sirius mentioned the buyout would “deepen [our] position in podcasting, the fastest-growing sector in the audio entertainment ecosystem”.
“With Stitcher, we will expand our digital audio advertising presence and look to generate new ways for creators to find and connect with their audiences.”
Jim Meyer, SiriusXM
It added: “With the acquisition, SiriusXM’s combined properties will contain the largest addressable audience in the U.S. across all categories of digital audio – music, sports, talk, and podcasts. The transaction will also further extend the substantial reach of SiriusXM in the digital audio ad marketplace. The SiriusXM and Pandora owned-and-operated digital platforms, combined with the company’s exclusive ad sales arrangement with SoundCloud for the U.S., and the Stitcher and Midroll networks that are subject to the agreement, will reach over 150 million listeners.
“Upon completion of the transaction, SiriusXM will be better positioned to advance the podcast ad market and help solve some of its critical challenges through precision targeting, ad efficiency, and improved measurement capabilities via a streamlined ad marketplace.”
Today’s information got here on the identical day that the IAB introduced that US-based podcast revenues reached $708.1m last year, and are anticipated to get shut to $1bn this yr.
“The addition of Stitcher is an important next step as we continue to develop and strengthen our offering in the fast-growing podcasting market,” mentioned Jim Meyer, Chief Executive Officer of SiriusXM. “With Stitcher, we will expand our digital audio advertising presence and look to generate new ways for creators to find and connect with their audiences. Stitcher has a talented team with deep experience in the podcast space, and we look forward to working with them to better meet the needs of creators, advertisers, and listeners.”
Through its Midroll Media promoting community, Stitcher acts as a gross sales and advertising and marketing consultant to join advertisers and podcasts based mostly on the advertiser’s desired audience.
Guggenheim Securities, LLC is serving as monetary advisor to SiriusXM and Weil, Gotshal & Manges LLP is serving as its authorized counsel.Music Business Worldwide