Amazon’s embrace of podcasts in recent months may be just the beginning. The company is said to be in exclusive talks to buy Wondery. The Wall Street Journal reports a $300 million price tag is being sought, with sources saying negotiations are still underway and it remains possible no deal will be struck.
Bloomberg had earlier reported that Apple and Sony Music Entertainment have also held discussions with Wondery, but they may no longer be first in line.
Not only has Amazon moved to capture a part of the growing podcast business by adding spoken word content to the Amazon Music app in recent months, but its streaming Prime Video service could also be attracted to Wondery. The podcast studio has had a higher share of its shows licensed for TV and film than any other company. CEO Hernan Lopez told Podcast News Daily in August that Wondery had 16 podcasts in TV development, with four ordered to series.
In September Wondery hired financial advisors to look at options for the company, including a possible sale. But a sale is not the only option on the table. The advisors will also look at whether Wondery should instead raise more money or bring on new controlling partners. Bloomberg reported earlier that might take the form of a special-purpose acquisition company, allowing a blank check company to be created and leverage the public markets to raise the capital needed to acquire the podcast company.
A quarter of Wondery’s expected $40 million in revenue this year is likely to come from licensing its intellectual property to television producers. The remaining three-quarters will come from advertising sales, per the Journal. Subscription revenue from its Wondery Plus feature remains small.
Amazon Music began featuring podcasts in September with a mix of established and new, original shows produced exclusively for Amazon Music. It also has an array of podcasts from other publishers. Then in October, Amazon-owned Audible did the same when it added roughly 100,000 podcasts with a similar list of publishers.
“Amazon will still be some way behind its competitors with its combined audio service, with the platform home to a much smaller content portfolio compared to other industry heavyweights,” said Omdia Tech analyst Georgina Howes. “But with deep pockets and a global presence, there are strong opportunities for a wider rollout and future investment into content rights and original productions.”
Hernan Lopez, a TV veteran who was CEO of Fox International Channel, launched Wondery in 2016 with the backing of Twentieth Century Fox, now part of Disney, and venture-capital firms such as Waverley Capital, Lerer Hippeau Ventures, Greycroft Partners and Advancit Capital. Wondery’s payroll has about 65 employees, all of whom either own company stock or options.
Podtrac reported Wondery was the fourth-biggest podcast publisher in November with a unique monthly audience of nine million in the U.S. and with nearly 59 million streams and downloads of its shows during November. That’s a jump from sixth place a month earlier. Only iHeartMedia, NPR and the New York Times were bigger among the publishers measured by Podtrac.