Sony Music discovered Alicia Keys, Lil Nas X and Beyoncé. Its next big hit may be a podcast.
The world’s second-largest music company plans to release nearly 40 podcasts this year and is developing more than 100 original programs, according to a statement Wednesday. Sony Music’s slate of upcoming shows includes two new programs from director Adam McKay, as well as a music podcast that analyzes hits from the 1990s.
Through five joint ventures, Sony Music has already released shows such as “Morally Indefensible,” a companion to FX’s docuseries “A Wilderness of Error,” as well as the true-crime program “Smokescreen: Fake Priest.”
That slate of shows represents the biggest investment in podcasting to-date by a major music label, according to Dennis Kooker, the global head of Sony Music’s digital business. Kooker is eager to cash in on a booming audio business that could siphon away listeners — and advertisers — from radio and streaming services.
“We have a broad strategy and we want to be in every genre,” Kooker said. “We feel like we have a great story and want to be attracting advertisers.”
Record labels have seldom strayed from their business of identifying and developing new musicians. But they have grown more interested in podcasting as listenership has soared. More than 100 million people in the U.S. listen to a podcast every month, according to Edison Research. Ad sales grew 48% last year, reaching $708.1 million, according to the Interactive Advertising Bureau.
Sony Corp.’s music division and its peers have become even more interested as Spotify Technology SA, their biggest partner, has invested hundreds of millions in the industry. Founded as a music streaming service, Spotify now identifies itself as an audio company and has argued that podcasting will grow into a multibillion-dollar advertising business.
In that sense, podcasting poses both a threat and an opportunity. The larger it gets, the less reliant Spotify is on music — meaning record companies have less leverage. Music companies currently collect more than 70% of Spotify sales.
But if podcasting does grow into a multibillion-dollar industry, Sony may be able to position itself to grab a substantial portion of those sales. “There is a tremendous opportunity for advertising in podcasts,” Kooker said.
Podcasting is comparable to a new genre of music, according to Tom MacKay, one of the Sony Music executives in charge of the podcasting business. The company needs to identify the best new talent — be they hosts and producers — and make investments accordingly.
“The skill set we see is needed in podcasting aligns with our historical skill set on the music side,” he said.
Sony Music has formed joint ventures with a handful of top partners, including Adam Davidson, the former host of “Planet Money,” and McKay, the Oscar-nominated director of “The Big Short.” McKay is doing a show with investigative journalist Tara Palmeri that debuts next week.
The company will unveil the full range of its investment in podcasting for the first time Wednesday during a presentation to advertisers.