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Amazon Music to acquire Art19

The move was announced on Thursday, further underlining the platform’s intent to match its peer competitors, most of which are variably deep into their respective efforts in building a podcast position.

For the unfamiliar, ART19 is primarily known for operating a podcast platform that’s meant to do all the things you’d want from the model of a modern major podcast platform: host content, generate trustworthy analytics, deliver targeted ads, optimize the delivery of those ads, and so on. The company was founded a decade ago, in 2011, by Sean Carr and the podcaster Matt Belknap, who, as the story goes, were trying to figure out how to help their LA comedy friends make money off all those comedy podcasts they were starting at the time. ART19 proceeded to live through multiple industry cycles over the course of its life as a startup: as a contemporary to the original founding of Midroll, through the Serial boom, through the entrance of Spotify, and, most recently, through this immediate consolidatory phrase. In 2017, it raised $7.5 million in a Series A round led by BDMI and DCM Ventures, with participation from UTA Ventures, among others, and last fall, as the dust seemed to settle around the podcast M&A market, the company launched an original content division as well as a podcast-production and direct-sales division. Those machinations suggested the beginning of an expansive diversification pivot, perhaps as a hedge against the possibility that there might be no meaningful buyers left for a startup that’s just specialized as a hosting and monetization platform. Good thing, then, there’s still Amazon Music belatedly trying to push its way into the podcast ecosystem, and now ART19 has a definitive end to its story.

The terms of the deal were not publicly disclosed, which I’m told is typical of Amazon, though the Wondery deal — Amazon Music’s last podcast-related acquisition that essentially served as its statement of entry — was said to be valued at around $300 million. The ART19 deal is expected to be smaller than that, mostly because $300 million is an excessively large number.

With ART19, Amazon Music will be getting a veteran team of podcast executives. There’s Carr, of course, who has served as CEO throughout the company’s entire existence. Its C-suite also includes Lex Friedman and Korri Kolesa, both former Stitcher execs who abruptly departed that company in early 2019 to become Chief Revenue Officer and Chief Operating Officer, respectively. (Though Kolesa appeared to have left the role in February and is now listed as an Advisor to ART19.) Also in the mix are EVP of Digital Technology Dan Jeselsohn, a former exec at WNYC; VP of Advertising Sales Josh Davidson, a former VP at Midroll; and President of Partnerships Roddy Swearngin, former EP of the now defunct Sideshow Network.

Now that it has a scaled-up content factory in Wondery and an underlying technology backbone for distribution, should Amazon Music be a platform of concern for podcast publishers? As always, the answer for a corny question like this is pretty much the same: maybe, probably, it depends on whether the platform will really move the needle for a strong enough constituency of podcast creators and publishers, and we’ll only truly know about that over time.

In the meantime, it’s worth remembering that all this is part of a broader audio-streaming competition between Amazon Music and other platforms. With that in mind, a quick landscape check: The last time Amazon Music disclosed user numbers publicly was in early 2020, when the service announced the 55-million user mark in an interview with the Financial Times. On a platform user level, Spotify remains in the clear lead, reporting 158 million premium subscribers and 345 million active users in its last earnings report. Though not the podcast-relevant platform when it comes to that company, Apple Music is thought to be in second place, last publicly disclosing more than 60 million subscribers in the summer of 2019, according to Music Business Worldwide. Meanwhile, SiriusXM reported around 34.5 million total users in its last earnings report, and claims that Pandora, its music streaming service, has about 55.9 million monthly active users. (There is, of course, a level of trickiness involved in comparing these numbers against each other. Audio-first companies like Spotify and SiriusXM do clearly demarcate their audio-user numbers, while bigger diversified tech corporations like Amazon and Apple tend to announce new public numbers only when prudent to do so from a marketing perspective, and, even then, there can be imprecision.)

Anyway, for what it’s worth, I continue to be tentative on Amazon Music’s relationship to the podcast world. Audible, its sister Amazon division specializing in audiobooks and subscription-based original audio programming whose machinations appear to be independent from and perhaps even competitive to Amazon Music, still strikes me as loads more interesting, and potentially loads more disruptive.