In a crowded market, stars shine brightest.
This was Amazon’s guiding principle in the restructuring of its audio entertainment operations. The company’s decision to consolidate aspects of its Wondery podcasting division with its larger Audible audio book division surprised the podcasting sector when the news broke on Aug. 4.
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Audible has been part of Amazon since 2008. Wondery, launched in 2016 by entrepreneur Hernan Lopez, was acquired in late 2020. In the five years since, podcasting has exploded as a medium, seeing in particular a big boom in video-enhanced programming. That growth spurt spurred Amazon to make structural shifts at Wondery and Audible.
“This was definitely a strategic decision,” Steve Boom, Amazon’s VP of audio, Twitch and games, tells Variety. “As we’ve seen how the market has evolved and how we need to best organize to address the market opportunity where we’re seeing the most success, it became pretty apparent to us over the last several months. This acceleration of video podcasting is really what prompted this restructuring.”
Boom says the moves were spurred by the clear bifurcation that Amazon audio leaders began to see in Wondery’s output. Many of the platform’s most popular titles fell into one of two broad categories: narrative-driven and personality-centric. Narrative titles tend to be deeply reported productions focused on true crime, history, pop culture, investigative reports and, increasingly, kid-centric shows. Personality-focused shows include such high-profile titles as Dax Shepard’s “Armchair Expert,” Travis and Jason Kelce’s “New Heights” and LeBron James’ upcoming “Mind the Game” series.
Tom Webster, a partner in the podcast trade organization Sounds Profitable, says Amazon’s reorg is right in line with the larger trends in podcasting.
“So much of the current narrative in podcasting is really being driven by video, even though most consumers spent most of their time with audio only,” Webster says. “But for the biggest shows, they want to see LeBron. They want to see the Kelce brothers.”
Over time, Amazon brass realized that the two kinds of podcast required different approaches to development, marketing and audience retention support. With the restructuring, Wondery’s narrative titles will be added to the vast archive of programs available under Audible’s subscription platform. Wondery’s focus will turn to the care and feeding of its celebrity- and personality-fronted shows.
“We’ve learned over time that the business models for these two different types of content are actually quite different,” Boom tells Variety. “On the one hand, the video-creator podcasts are monetizing incredibly well through advertising. It’s a very, very strong advertising business. In contrast, with the narrative podcasts, we’ve come to the conclusion that those are best monetized through a premium business model. And it turns out that we have in Amazon the leading company in the world in premium spoken word modernization. So we decided that if the best business model [for narrative shows] is premium, then it makes sense to bring these two things into one place where we can actually monetize them appropriately.”
Wondery ranks high among the most popular podcast platforms in the country. But as the overall podcast marketplace became increasingly crowded in the post-pandemic years, Wondery looked to differentiate itself with both volume of production and starry names. More recently, ESPN and other networks are turning to video podcasts as low-cost content options that ideally become a daily or weekly habit with viewers.
“Video has grown much more quickly than audio-only over the last two or three years. And within the video segment, you have some that are really premium in terms of production values and the quality of the talent and the guests on the shows,” Boom says. “So there’s more and more content out there to consume. Even though the overall audience for podcasting is growing, with that much growth in [the volume of] content, you have a very uneven environment where some shows are growing their audiences, others are flat and others are down.”
Amazon’s audio tune-up will result in about 100 layoffs within Wondery. Many staffers will move to new positions within Amazon. Jen Sargent, who has been CEO of Wondery for the past four years, will exit the company after a transition period.
Boom stresses that Sargent has been “a phenomenal leader,” for Wondery. “Sometimes the market changes, and you have to respond to those changes,” he added.
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