This morning the global #2 streaming music service Deezer announced that it is acquiring Stitcher, the audio platform focused on talk, entertainment and podcasts.
In an interview Deezer Chief Marketing Officer Beth Murphy explained that the deal is intended to help introduce more talk listeners to streaming music, while also provide music listeners with talk and entertainment options. She noted that 35% of terrestrial radio listening is to talk, explaining that “we think this segment is underserved by traditional music streaming services.”
Deezer introduced itself to the US market in September with an uncompressed audiophile-oriented service exclusively available with Sonos wireless audio systems, followed up by its Premium Plus service, tied to Bose SoundTouch systems. With these introductions Murphy said the company is trying to differentiate itself by focusing on the audiophile segment. The Stitcher acquisition will allow them to “further differentiate by serving talk and entertainment listeners.”
I asked Murphy if this move is a shot at broadcast radio. She said that “it’s both a competitor and an opportunity for terrestrial radio.” It’s a competitor in the sense that streaming music and podcasting are both newer categories where people spend their listening time. But it’s also an opportunity because Stitcher carries broadcast radio content. “That’s where we see mainstream consumers are still spending their time, in those channels,” Murphy said.
Because Deezer has a global reach to over 180 countries, she said that this is an opportunity for Stitcher and its content providers to expand their reach. The company anticipates expanding program offerings into less common “long tail languages and markets.”
Murphy also said that the company will look at ways to expand Stitcher’s content platform, such as streaming live content or adding premium content. She said Deezer offers more options for the latter, in particular, because it is already a paid, premium service.
As an observer and fan of podcasting, I wanted to know what effect the acquisition will have on current Stitcher users and content providers, especially small and independent podcasters.
“We think it’s great for content providers. We’re just going to offer them more reach, 16 million active users in a global audience,” Murphy said.
She assured me that, “Stitcher will remain intact, as a free service with ad support.” She also noted, “the ad supported model is working for podcasting,” and has also been successful for Stitcher.
For the future, “As we integrate the Deezer experience there likely will be a free and paid model.” That’s one place where premium content may come in. Murphy also said that the company will work with content providers who want to offer premium, subscription content. She pointed to SiriusXM as a “great example of a service with exclusive content,” saying “we want to do that as well.”
My take is that having a single smartphone or smart dashboard app to access both on-demand streaming music and talk programming has the potential to be a very strong competitor to SiriusXM, in particular, as well as terrestrial radio. In a way iHeartRadio offers a similar experience for live streaming music and talk, both broadcast and digital-first. It also offers access to custom music stations and a selection of on-demand shows, including podcasts.
What differentiates the Deezer-Stitcher combination is the sheer size of catalog–Stitcher has 35,000 shows from 12,000 providers, and Deezer has 35 million tracks.
At the moment there doesn’t seem to be a downside for podcasters, with the upside being the opportunity to reach a much wider audience. Murphy also told me that Deezer will use Stitcher’s listening data to fine tune its recommendation platform in order to offer both talk and music recommendations. These would be tailored to a listeners’ habits, like for a commuter who likes news and talk in the morning, but prefers music for the drive home.
A chance for podcasters–especially independent podcasters–to make money through premium and subscription content is also a real potential upside. Right now there really isn’t a good, widely-available third-party platform or aggregator for an audio producer to offer subscriptions. Most have to cobble together a number of tools and can only offer the subscriptions through their own site. Having a portal with a substantial user base to offer premium audio shows could make this a viable funding option for some podcasters.
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