Amazon Is in Negotiation to Buy Wondery, Quoting $300 Million to Gain a Foothold in Podcasting

It is reported that Amazon is in negotiation to buy Wondery, a well-known podcast production company, and the offering price is around $300 million. The negotiation is still in progress, but it may break down. Wondery’s last round of financing was in June 2019, when the company was valued at $100 million. In contrast, the big event in podcasting last year was Spotify’s acquisition of Gimlet Media for $230 million.

Wondery’s revenue this year is expected to exceed $40 million. Wondery has been one of the most popular podcast networks among Americans in recent years - two of its programs have been on the list of Apple’s year-end most popular podcasts. In 2019, Wondery launched its own subscription service Wondery+.

Outwardly, Amazon’s intention to participate more in podcasting may be puzzling. In fact, however, this acquisition belongs to one of the its reasonable expansion strategies. Amazon has been trying to further erode the market share of traditional media, and it has also expressed its interest in the audio field.

By virtue of Amazon Music Unlimited, Amazon became capable to compete with Spotify and other music streaming platforms. Spotify’s recent success is largely related to its decision to invest heavily in podcasting, and it is very possible that Amazon wants to follow suit.

Wondery is one of the last large podcast production companies in America that is still independent. With the growing competition in American podcast market, this is Amazon’s last chance to gain a foothold in podcasting through acquisition. In early November, Bloomberg reported that at least four companies, including Apple and Sony Music Entertainment, had negotiated to acquire Wondery, and Wondery asked a price of $300 ~ $400 million. But now, the “exclusive negotiation” between Amazon and Wondery seems to mean that Apple and Sony had given up because of the high price.