SiriusXM set to buy Stitcher (for a price that will make Deezer wince)

In September 2014, streaming platform Deezer acquired podcast platform Stitcher for an undisclosed price.

At the time, Deezer said the acquisition would bring 35,000 radio shows and podcasts to its service. Things didn’t work out.

Less than two years later, in June 2016, Deezer sold off Stitcher to US media company E.W Scripps. The deal plonked a reported $4.5m in cash into Deezer’s bank account.

Now, Stitcher’s being sold again – amid a very frothy commercial podcast market, largely driven by recent blockbuster acquisitions from Spotify.

This time, reports the Wall Street Journal, the buyer of Stitcher is satellite radio giant Sirius XM. The price? Approximately $300m… or around 67 times what Deezer sold it for four years ago.

To be fair to Deezer, Stitcher’s nine-figure modern price-tag has been significantly boosted by E.W Scripps’ decision, back in 2016, to merge it with podcast advertising network Midroll Media, which E.W Scripps acquired for $50 million in 2015.

Today, the Stitcher app aggregates over 350,000 shows and over 7 million episodes for podcast listeners. It’s free, with a $4.99-per-month Premium ad-free subscription offering.

Stitcher also commissions/producers its own ‘Originals’ podcasts – such as Freakonomics Radio – and acts as an ad sales partner to third-parties.

The Wall Street Journal reports that Sirius’s acquisition of the app is yet to be finalized.

The question for the music industry: how might Sirius blend Stitcher’s offering with Pandora – which Sirius acquired for a $3.5bn all-stock deal in 2019 – in addition to SoundCloud, in which Sirius acquired a minority stake for a $75m investment earlier this year.

According to B. Riley FBR analyst Zack Silver, a $300m pricetag for Stitcher would represent a 4.1X multiple on Stitcher’s 2019 revenue of $73m.

Spotify has spent approximately $700m on podcast-related acquisitions in the past 18 months, including its buys of Anchor FM ($154m), Gimlet Media ($195m) and Parcast ($55m) last year, plus Bill Simmons’ sports podcast The Ringer (up to $196m) in Q1 2020.

More recently, Spotify spent a reported $100m on locking in an exclusive deal with the Joe Rogan Experience, which was Apple’s biggest audio podcast on its platforms last year… and is currently No.1 on Stitcher.Music Business Worldwide

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