Podcasting is a tiny market compared with other media, but that just means the growth potential in the digital audio files that users download and listen to, usually for free, is substantial.
So says DCM Ventures General Partner Jason Krikorian, who oversaw the firm’s investment last August in ART19, the San Francisco provider of podcast hosting, distribution and ad serving technology.
Krikorian, who joined ART19’s board, notes that more than 67 million Americans, or 24 percent of the population over age 12, listen to podcasts monthly, according to Edison Research. That percentage is up from 21 percent the year before. Krikorian is convinced that the market will continue to mature.
“The number of listeners is small now, but they’re not insignificant,” says Krikorian, who notes that voice-focused interfaces like Amazon’s Alexa and other essential podcast technologies are improving. He also says podcasts are an ideal multitask medium that users can have playing while doing other things.
Krikorian knows a thing or two about media, having co-founded in 2004 Sling Media, maker of a box that connected to a TV and enabled users to stream shows to their mobile devices. The company sold to EchoStar, now called Dish Network, in 2007 for $380 million.
Krikorian and his brother Blake came up with the idea of Sling Media because they wanted to watch their hometown San Francisco Giants when they were traveling. Similarly, Jason Krikorian sees podcasting taking off based on his own personal experience. He says he noticed about two years ago how podcasts began to take up more of his media-consumption time.
For instance, instead of listening to sports talk on the AM dial of his radio alarm, Krikorian instead opts to listen to the sports podcasts he subscribes to, as well as a number of political shows, such as Crooked Media, David Axelrod’s The Axe Files and Nate Silver’s FiveThirtyEight, among others.
“Traditional broadcast radio seems senseless when podcasting is increasingly available and the technology is improving,” he says.
DCM is not the only firm to invest in a podcast deal. A sampling of deals in the past year include:
- ART19, which raised a $7.5 million Series A round co-led by DCM and Bertelsmann Digital Media Investments. Others in the round included United Talent Agency, Gallo Digital, Zach Coelius and Array Ventures.
- In August, Gimlet Media, the New York audio company responsible for producing hit podcasts, secured $15 million in Series B funding. Stripes Group led the round with participation from other investors, which included Refinery29, Blue Apron, Craftsy, Emerson Collective, Cross Culture Ventures, Betaworks and Graham Holdings.
- Anchor, a New York podcast app, raised $10 million in Series A funding. GV led the round with participation from investors including Accel Partners, Betaworks, Chernin Group, Eniac Ventures, Homebrew and Atlantic Records’ CEO, Craig Kallman. Concurrent with the funding, G. Siegler of GV and Brian O’Malley of Accel will join Anchor’s board.
- Raine Group and Temasek agreed last year to invest in the Berlin music and audio platform SoundCloud. Terms weren’t disclosed.
Krikorian notes that recent interest in podcasting startups may be the result of Serial, a weekly public radio program on This American Life. The investigative-journalism program looked into a 1999 murder case in Baltimore, and the show rocketed to fame after its 2014 launch as it resonated with listeners. It won a Peabody Award in April 2015 for storytelling. Season 3 on a new topic is expected to begin airing in early 2018.
“Serial was a big inflection point for podcasts,” Krikorian says. “And we expect to see usage across all podcasts continue to go up.”
Photo of podcast depicted on a mobile phone screen courtesy of Daviles/iStock/Getty Images.