Why Netflix Needs Podcasts

Happy Sunday evening, and welcome back to another dive into the intersection of podcasting and investing.

First off, thanks for all the feedback on the last two editions - and shoutout to everyone who forwarded it or signed up this week. If you’re new here, you can subscribe for free here.

This week, I’m going to write about Netflix and why podcasts need to be part of their larger strategy. Not should. Need.

But first, some quick hits: 

• 1.8M views, streams, and downloads in 24 hours for emergency Iran episodes of 'The Rest is Politics' and' The Rest is Politics: US' [Podnews]. Killer numbers for Goalhanger, who is just absolutely crushing it across the board. One thing noted in the release was that many people watched these podcasts on their TV, which continues the blurring of podcasts, shows, video, and other formats, a trend we discussed previously. And while not apples to apples, it is worth noting that CNN just had its highest weekly ratings, with an average audience of 831,000 total viewers tuning into the network throughout the week of June 16th.

• Last week, we explored several global markets and examined how digital audio is steadily gaining market share from radio, and is on pace to surpass radio in the near future. More data was released this week in Germany, as podcast consumption has now surpassed radio among 18-29 year olds. Read the whole report here. (Thanks to Podnews for translating this.) 

• The All-In Podcast’s $1200 tequila sells out [TechCrunch]. I’ll withhold most of my commentary and simply note that this is another example of how to generate revenue from audio. Audio, video, social media, live events, cellular companies, tequila, creatin, Stanley Cup champions wearing t-shirts of their favorite podcast.. it goes on and on.

While I won’t be out of the office next week, I will be enjoying the fireworks from Compo Beach in Westport, CT (aka sneakily the podcast capital of the world – you never know who you’ll run into at the YMCA gym). But, being the fourth of July, I’ll likely skip sending out an email next week… but, ya never know. 

-Chris

Alright, now let’s talk about Netflix. 

Earlier this week, Wells Fargo’s Steven Cahall noted that Netflix should invest in high-value, short-form content and exclusive creator deals to compete with YouTube. He also made an appearance on one of my favorite podcasts, The Town with Matt Belloni, to discuss his analysis, which I’ll try not to repeat too much of what they covered (and of which I tend to agree).

But let’s focus on podcasts a bit. First, I believe Netflix will add podcasts to the platform. Especially if they continue to expand into live programming, they will likely need to do so. However, I also want to make it clear that I never expect Netflix to simply start adding podcasts and emulate YouTube. I think they will be targeted deals with existing podcasts, ones that have highly engaged audiences, and the final product on Netflix may not even look like a podcast at all (going back to the show vs. podcast debate). And do you know how I know that? Because they’ve already done it, back in 2020 when they released Song Exploder (which is one of the best podcasts ever, btw).