For the past several years, my job has been to essentially explain what a podcast is to friends, family, partners, and random people I meet when they ask me what I “do for a living.” This year, something changed; instead of the blank stare I mostly received in response, the far more common response was, “Oh, cool!”
Allow me to introduce Sowt and myself, and explain what my “job” is. Sowt is a leading audio production company specializing in high quality Arabic audio content. We make podcasts under Sowt Originals and Sowt Studios, produce and publish audio articles and soon-to-launch, audio books for subscription, and work with partners and clients to produce high-quality audio.
We started as a small group of freelancers producing just a few episodes in our first year. Since that humble beginning, we’ve expanded to reach millions of listeners, publish thousands of episodes, and produce the best content possible. We generate revenue from production services, advertising, subscription and grants.
Audio land is a specialized community and economy that is growing quickly. While a few big tech companies dominate music - such as Apple, Spotify and more locally Anghami - spoken audio is growing quickly with space for many successful stories. Our goal is for Sowt to continue to play a leading role in developing digital Arabic audio content.
When the global event industry lurched back to life earlier this year, I had the opportunity of attending and speaking at The Podcast Show in London, England in May 2022. The line for entry was out the door and the venue was absolutely abuzz. Big podcast companies like Spotify, Amazon/Wondery, Apple, Acast among others had elaborate booths setup.
Anecdotes aside, we’re in the middle of a big moment for digital audio globally and in the MENA region as adoption has increased globally. In the United States, 41% of the population had listened to a podcast in the last month, up from 26% in 2018. Globally, the number of listeners is expected to grow from 383.7M listeners in 2021 to 504.9M listeners in 2024.
Podcast ad spend has also increased in the past few years, as advertisers and brands get on board. 2021 digital ad spend in the US was 1.3B, in 2022 an estimated 1.7B and 2023 estimated at over 2B ad spend on podcasts. Compared to other ad channels, advertisers in the US will spend 25% of their digital ad budgets on podcasts.
Why are podcasts picking up more listeners, even with endless competition for consumers’ attention? Podcast listeners focus, and engage at higher levels than all other types of digital content. The industry average completion rate is around 70-75% of the episode, meaning audiences are listening attentively for 12-15 minutes of content, compared to 1-3 seconds on other social media.
Advertisers are hurrying to podcasts because listeners are younger, affluent and decision makers. Podcasts offer a screenless alternative to doom scrolling social media sites. Podcasts listeners spend more than the other consumers. Especially during the endless lockdowns during COVID-19, we saw many users convert to regular listeners. The available options for listening to podcasts has increased; while most listen on their mobile phones, more and more are listening on Apple Carplay, Android Auto, and on smart speakers in their homes.
More locally, we’ve seen the market and the industry change substantially. All the numbers and data points aside, the biggest difference between previous years in the podcast ecosystem and today, is the amount of incredible Arabic content being produced by local production companies. While there are only a handful of podcast production companies in MENA, with larger media brands only just now getting on board, the amount of excellent content has increased.
I recently published a Twitter thread and the response showed that people are hungry for local, quality content.
For the first several years, Sowt focused on producing high quality audio in Arabic. We created several award winning and chart-topping shows, including Eib, Manbet, Domtak among others. As the amount of content increases and more listeners seek more diversity, we continue to launch new shows including one of the only travel shows, Bar Bahr, and a poetry show, Maqsouda. We also launched an investigative serial-style show called Ahraz. In its first season, Ahraz focused on the murder/suicide of an Egyptian Coptic priest.
Mergers and acquisitions have increased as well, with signs of a more mature podcast ecology. For the past few years I’ve been saying that the MENA podcast ecosystem needs some structural changes. We got our first look with Saudi Research and Media Group’s 51% acquisition of Saudi Arabia’s leading podcast and media company, Thamanyah. More companies are joining as well, including production companies in Saudi as well as advertising and technology solutions.
Anghami has made bigger moves recently, launching original and branded podcasts. Spotify also is making moves, which are all good signs and point to the seriousness of the digital audio playing a bigger and bigger role. Beyond podcasts, audio books, audio articles and voice assistants will continue to play a bigger role in our lives.
As the industry matures, so does the opportunity. In 2021, the total amount spent on digital advertising in the MENA region was around 5B USD. That number is expected to increase to 8B USD by 2024. When podcasts account for 1% of those ad dollars, you’ve already created a 50M USD opportunity. In the US, around 20-25% of ad spend is going to podcasts.
Being a data-driven organization, we are also seeing the opportunity in emerging geography markets, including North Africa. While Saudi, UAE and Egypt are the top three markets, Algeria, Morocco, Iraq, Jordan and Oman are lucrative and growing as well. Our audience insights show us that without much marketing, audiences in Algeria, Morocco and Iraq are growing.
While the opportunity is clear, there remain significant challenges. Minimal monetization or programmatic advertising creates a lack of incentive for producers and publishers to continue producing, unlike Youtube. Companies need to have a long runway to survive, and competition for advertising money is fierce.
In the past four years, the diversity and amount of content has increased, but there is much more room to grow. For example, how is DomTak essentially the only music podcast? Why are there only two investigative podcasts, Ahraz and Ehtial? And the list goes on.
So while there is much work to do, the opportunity for those who are willing to diligently, patiently and consistently build value for listeners and users persists. The path is a long one, but the past 12 months have provided the inspiration to continue.