Podcast Market Deep Dive - BDMI - Jan 2020

January 2020 Podcast Market Deep Dive Brendan Brits

2 January 2020 · Bertelsmann Exploring the State of the
Podcast Market Executive Summary Section I: Growth in the Podcast Market Section II: The Podcast Listener Section III: The Podcast Creator Section IV: The Podcast Advertiser Section V: Podcasts & the Capital Markets Section VI: Representative Companies Across the US Podcast Value Chain Table of Contents This report presents BDMI’s perspective on the current state of the podcast market and outlines key trends and themes to watch as the industry continues along a path of rapid growth and technological advancement. The report sets the stage with an overview of growing global engagement, demonstrating podcasting’s emergence in public consciousness and fervent loyalty among avid listeners. Analyses of the three main constituents of the podcast industry (listener, creator, advertiser) follow, detailing the status quo with observations on emerging trends, the role of technology & platforms, and best practices for each. The report concludes with an overview of capital markets activity related to podcasting and a representative list of companies innovating across the podcast value chain. Both exemplify the growing focus on the space by creatives, entrepreneurs, and strategic & financial investors. The Podcast Listener The Podcast Advertiser The Podcast Creator Technology & Platforms

3 January 2020 · Bertelsmann Focused Investment Theses • Next
Gen Media • Consumer Brands Select Fund-of-Funds Investments • Enterprise Tech • Fintech Presented by BDMI, Seed Through Series B Corporate Venture Capital Fund BDMI will continue to be active investors in the audio & podcasting markets Active Early Stage Investors • Series A-B (check size $1m-$5m), leading or following; Seed ($100k – $300k) • Covering North America, Europe, and Israel • Currently investing out of $150m Fund III Financial & Strategic • Financially-motivated, single-LP venture investor • Provide strategic value to both portfolio companies & parent company (global media, services, and education company Bertelsmann) Collaborative • Syndicate friendly, co-investing with many traditional and strategic VCs Team Select Investments Urs Cete Managing Partner Keith Titan Partner Sim Blaustein Partner Carmen Rivera Assistant Brendan Brits Associate Avinash Satish Finance Manager Rachel Lauren Analyst Audio-focused investments Sold to Oracle Q4 2019 Sold to The Chernin Group Q4 2019

4 January 2020 · Bertelsmann BDMI’s Top Podcast Theses 1
The podcast market will continue on an accelerated growth trajectory with listener growth and tech innovation US market size estimates upwardly revised to be $679m in 2019; first time visibility to $1B market in 2021 51% of Americans have listened to a podcast – a meaningful milestone, with room to grow Technological innovation in advertising and non-advertising enablement will support investment in medium 2 Beginnings of internationalization in 2019 set stage for global podcast growth to be key theme of 2020 Top publishers (e.g. Wondery*, HowStuffWorks, Spotify/Gimlet) are actively expanding libraries in multiple languages, including translation of popular English-language podcasts Traditional media companies around the world are starting to invest in the medium 4 The podcast ecosystem remains an attractive area for venture capital investment Landmark acquisitions in 2019 (particularly by Spotify) confirm buyer appetite – arms race only to grow with growth of overall market Spotify’s splashy entrance into the market and an increased focus from traditional media are mounting a challenge to Apple’s de-facto hegemony, creating paths to continued innovation in technology and content – innovative entrepreneurs will continue to shape the future of the industry 3 Traditional media will accelerate investment, cross-pollinating podcasts with other mainstream media formats Of traditional media, a few early movers made significant investments in 2019, which should produce results in 2020 and put pressure on competitors Leveraging their existing infrastructure and competencies, traditional media companies are well-positioned to become leaders in the podcast market Successful podcast IP translates to other media (e.g. TV/film) & companion podcasts created around other content (e.g. HBO’s “The Chernobyl Podcast”) Notes: *indicates BDMI portfolio company

5 January 2020 · Bertelsmann Thank You to the Following
Industry Leaders BDMI leaned on expert perspectives and insights in formation of this report Notes: *indicates BDMI portfolio company Ad Results Media is a leading audio & podcast advertising agency working with numerous Fortune 500 and unicorn companies. Clients work with Ad Results to plan podcast campaigns, buy at scale, and optimize based on unique goals. ART19 enables publishers to manage all content and ad operations in one place and equips advertisers with services to target audiences through smart targeting and create customized audio messages. The company powers hundreds of millions of podcast downloads every month. * / Audio Alliance is a Bertelsmann division committed to the development and production of podcast programming, drawing on the IP base across Bertelsmann divisions. The six content divisions of Bertelsmann Germany together launched Audio Alliance and audio platform Audio Now in 2019. Podsights Analytics is the first product to connect podcast downloads with on-site activity, giving podcasters and advertisers unprecedented insights into the effectiveness of their campaigns and ability to retarget customers through best-in-class attribution technology. * Wondery is the largest independent podcast publisher in the world. Launched in 2016, and known for its immersive podcasts, Wondery became the fastest network to join the Top 10 ranker by Podtrac, propelled by hit shows such as Dr Death, Dirty John, American History Tellers, Business Wars, The Shrink Next Door and Gladiator. * Bertelsmann Asia Investments (BAI) has invested in more than 160 startups. BAI focuses on sectors including Urbanization and Retail, Finance, China Based Global Company, Social / Media / Content and Tech & Infrastructure.

6 January 2020 · Bertelsmann Section I Growth in the
Podcast Market

7 January 2020 · Bertelsmann Podcasts Emerging as Mainstream Content
Format Familiarity with podcasts in the US reached 70% in 2019 Podcast Familiarity Up Sharply Since 2015 “Serial” Builds on Groundwork Laid By Early Adopters Over half of the US population has listened to a podcast(1) Notes: (1) Percentage of the US population over 12 years old; source: Edison Research, “The Podcast Consumer 2019” (2) Indexed to 100% (peak popularity of both terms); example podcast content not represented chronologically % of US Population (Age 12+) That… Google Searches for “Serial” & “Podcast”(2) ▪ Before 2015, the podcast market was buoyed by strong network of early adopters with loyal followings (many had been around for nearly 10 years) ▪ True crime podcast “Serial,” developed by This American Life and launched in Oct 2014, is often credited for elevating podcasting into mainstream consciousness and as the first breakout hit in the medium, building on groundwork laid by early innovators 45% 49% 70% 23% 33% 51% 0% 20% 40% 60% 80% 100% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Are familiar with podcasts Have listened to a podcast More people searched for “Serial” in Dec 2014 than had searched for “Podcast” in any month prior. 0% 20% 40% 60% 80% 100% Jan '10 Jan '11 Jan '12 Jan '13 Jan '14 Jan '15 Jan '16 Jan '17 Jan '18 Jan '19 "Podcast" "Serial"

8 January 2020 · Bertelsmann Among Podcast Listeners, Engagement is
Active & Habitual Weekly podcast listeners average seven podcasts per week Steady Growth in Monthly & Weekly Listeners It’s Never Been Easier to Listen Notes: Source unless otherwise noted: Edison Research, “The Podcast Consumer 2019” (1) Counterpoint Research, Liz Lee 63% 43% 0% 10% 20% 30% 40% 50% 60% 70% 2013 2014 2015 2016 2017 2018 2019 Monthly Listeners as % of "Ever Listened" Weekly Listeners as % of "Ever Listened" ▪ An estimated 90 million Americans are monthly podcast listeners (63% of people who have ever listened to a podcast) ▪ 62 million are weekly podcast listeners (43%) ▪ Weekly listeners average seven podcasts per week; 84% listened to more than one Recent technological advances have made audio consumption possible in nearly all parts of a consumer’s day On average, podcast listeners spend 5 hours and 39 minutes per day listening to audio (including radio, digital radio, music, etc.) Growing install base of on-the-go audio listeners 59% 73% 76% 78% 80% 87% “You enjoy listening to podcasts because…” Can do other things while listening Portable Can listen wherever you are For particular hosts Can listen on a computer Make you feel smarter 0 10 20 30 40 50 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019e Global Wireless "Hearables" Sold (millions) Global AirPods Sold (millions) Global “Hearables” Sales by Quarter(1)

9 January 2020 · Bertelsmann US Advertising Growth Exceeding Expectations
Differentiated Advertising Channel ▪ The US podcast advertising revenue market is expected to be $679m in 2019, 42% growth over 2018 ▪ Market expected to cross the $1B mark in 2021 ▪ 2018 finished 19% higher than IAB’s midyear projections. IAB also recently increased projections for 2019 and 2020 by 32% and 31%, respectively(1) Notes: (1) “IAB FY 2018 Podcast Ad Revenue Study”, “Full Year 2017 Podcast Ad Revenue Study” (2) Nielsen ad effectiveness study. “Podcast Advertising Generates Up To 4.4x Better Brand Recall Than Other Digital Ads” (3) Edison Research, “The Podcast Consumer 2019”; Percentages are of monthly podcast consumers, unless otherwise stated (4) eMarketer 2018; Activate Tech and Media Outlook 2018 Podcast Advertising Growth is Exceeding Expectations For the first time, visibility to reaching $1B market size in 2021 $ 106 $ 169 $ 314 $ 479 $ 679 $ 863 $ 1,045 $ - $ 200 $ 400 $ 600 $ 800 $ 1,000 $ 1,200 2015 2016 2017 2018 2019 2020 2021 Industry Revenues (Actual) Estimates as of June 2019 Estimates as of June 2018 In ($millions) Podcast advertising is driving ROI for marketers 4.4x Better Brand Recall compared to scroll ads, static ads, and pop-up ads(2) Podcasts provide access to a desirable demographic(3): ▪ 39% age 18-34 (vs. 28% of US pop.) ▪ 29% HHI >$100k (vs. 19% of US pop.) ▪ 53% have at least a college degree (vs. 39% of US pop.) 54% of Listeners More Likely to Purchase 54% of respondents said they were “much more likely” or “somewhat more likely” to consider a brand when they hear an advertisement on a podcast(3) 61% of Listeners Have Purchased a product or service after hearing a podcast ad(4)

10 January 2020 · Bertelsmann Many Global Markets with Active
Podcast Engagement Numerous publishers investing in internationalization and translation of podcast content China – The largest market size, but apples-to-orange comparison ▪ Market dominated by Ximalaya FM ▪ Formats and content are unique to other global trends (overweighted in educational content, paid models) Latin America – Four fastest growing podcast markets are Hispanic ▪ Widely spoken languages → content relevant to large population without need for translation ▪ Spotify investing in the region – now more than 20% of MAUs from region Reuters Institute study surveying 40 countries on six continents found 36% of online respondents had listened to a podcast in the last month. In the under 35 years old demographic, this number was 50%(1). Notes: Source, unless otherwise identified: Reuters Institute Digital News Report 2019 (1) Surveys were conducted online. Per Reuters Institute, “online samples will tend to underrepresent the consumption habits of people who are not online (typically older, less affluent, and with limited formal education). In this sense it is better to think of results as representative of online populations.” Europe – Building blocks in place for hyper-growth ▪ Podcast usage outpacing revenue generation ▪ High adoption of programmatic digital audio advertising ▪ However, scaling challenges from language / translation South Korea – Nearly a decade of popularity generating loyal usage ▪ Higher % listenership than US (53% vs. 35%) ▪ Technologically advanced society → digital audio & streaming adoption ▪ Momentum behind digital advertising market, growing 14% YoY

11 January 2020 · Bertelsmann European Podcast Market Poised for
Rapid Development High levels of internet connectedness already bringing six countries with 14m+ listeners to the table Notes: (1) Reuters Institute Digital News Report 2019; these countries are Spain, Italy, Germany, France, Poland, and United Kingdom (2) “Audio Stream to Revenue Stream,” Xaxis & IAB Europe (3) “Podcasting in Europe: Is an American Trend Crossing the Atlantic?” European Journalism Observatory, Rachel Stern, Feb 23, 2018 (4) eMarketer, “Digital Ad Spending 2019” * indicates BDMI portfolio company ▪ Opportunities: ▪ High levels of internet connectedness, mobile usage, and existing engagement in audio (radio & digital)(1) ▪ 6 countries that each have 14m+ monthly podcast listeners(1) ▪ Robust adoption of audio advertising: 74% of advertisers spend on audio channels, and 59% do so programmatically, though typically as low percentages of total ad budget(2) ▪ 25-30% of population in major European economies are monthly listeners (Spain highest at 39%) ▪ Risks: ▪ Language barriers are a headwind for scalability ▪ Concentrated market of media creators and tighter regulation of media vs. US might lead to slower adoption by long-tail creators(3) ▪ European digital advertising market size trails US(4) …Though Market is Still Largely Localized “Wondery* Launches ‘Dr. Death’ Podcast in Seven Languages in Markets Worldwide” – Variety, Aug 2019 Early Movers Among Top US Publishers are Investing in European Market 2018 Digital Ad Market (billions) % of Advertising on Digital 2023e Digital Ad Market (billions) 5 Yr CAGR United States $ 108.6 48.6% $ 201.8 13.2% United Kingdom £ 13.2 63.8% £ 20.7 9.4% Germany € 6.6 34.3% € 9.9 8.4% France € 4.3 37.0% € 7.2 11.0%

12 January 2020 · Bertelsmann Significant Momentum in German Podcast
Market 33% of the German population has listened to a podcast, compared to 51% in the US Notes: Source: Edison Research & RTL Radio, “The Infinite Dial 2019 – Germany” Engagement Consumption Habits 51% 32% 22% 33% 17% 10% 0% 10% 20% 30% 40% 50% 60% % Ever Listened % Listen Monthly % Listen Weekly US Germany 11% 12% 29% 48% 11% 12% 31% 46% 0% 10% 20% 30% 40% 50% 60% 5+ Years 3-5 Years 1-3 Years <1 Year US Germany While behind US levels, German podcast consumption is showing strength in the early days % Population Podcast Engagement % Podcast Listeners That Have Listened For: 90% 64% 49% 43% 37% 37% 85% 32% 27% 11% 34% 21% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% At Home In a Car Walking Exercising Public Transit At Work US Germany US consumers are more likely to listen while on-the-move. Both markets experiencing swells of new listeners % That Have Ever Listened While: Despite prevalence of English-language content, German is the most listened-to language. Listener growth expected to accelerate following recent investments in German content. Languages to Listened To: German, 62% English, 11% Both Equally, 22% Other, 5% Select German Hits Gemischtes Hack Comedy Fest & Flauschig Comedy Paardiologie Relationships Verbrechen True Crime Stern Crime Spurensuche True Crime

13 January 2020 · Bertelsmann Podcast Market in South Korea
is Well-Established 27m monthly podcast listeners following nearly a decade of familiarity Notes: (1) Reuters Institute Digital News Report 2019 (2) “How South Korea became the world’s podcasting capital,” Ozy Media, Colin and Peleschuk, June 2019 (3) Musically – South Korea Market Profile (4) “Digital ad market overwhelms broadcasting ads in Korea in 2018,” Maeil Business News Korea ▪ Opportunities: ▪ 27m (53% of the population) are monthly podcast listeners – higher percent than US and any of the 10 largest European countries(1) ▪ 20% of the population identifies as “avid fans” (vs. 12% in the US) and the average listener listens for 2.5 hours per day(2) ▪ 8.5m South Korean citizens are paying subscribers to a music streaming service(3) ▪ Compared to tech-savvy neighbor Japan, monthly listenership is much higher (53% vs. 23%) ▪ Nearly a decade of familiarity: Naneun Ggomsuda, a political comedy podcast that aired around the 2012 election, was the first hit in South Korea ▪ Risks: ▪ Digital advertising market ($3.7B) is still small relative to US and Europe, but growing quickly (14% YoY), driven by spend on mobile(4) ▪ Local platform claims to have 50% of market share (by listenership) – platform concentration may be headwind to international companies trying to enter market Naneun Ggomsuda aired April 2011 – December 2012

14 January 2020 · Bertelsmann Chinese Podcast Market Dwarves All
Others, Though Key Differences $7.3B market size built on transactional revenue for educational courses, audiobooks Notes: (1) “FOMO in China is a $7 Billion Industry,” Marketplace, Jennifer Pak, Sep 13, 2018 (2) “The Chinese “podcast” industry isn’t really podcasting as Americans think of it…,“ Nieman Lab, Nicholas Quah, May 2019 (3) Lizhi FM F-1, filed Oct 28 ▪ Opportunities: ▪ Market size estimated at ~$7.3B though includes other audio content outside of US-like podcasts (e.g. “Pay for Learning”, audiobooks)(1) ▪ Market dominated by Ximalaya FM, combining hosting services, program distribution, and RSS subscriber applications in one platform – an “audio YouTube”(2) ▪ “Pan-audio Entertainment” market estimated at $28.6B (compared to $51.4B in the US), growing at 12.6% CAGR from 2018A-2023E (9.5% US over same period)(3) ▪ Transactional business models are the norm: subscription, pay per use, and tipping ▪ Diversity in top five podcast categories: 1) Culture, 2) Kids & Family, 3) Self-growth, 4) Finance, 5) Skills(1) ▪ Risks: ▪ Government regulation: unilateral ability to tinker with supply ▪ Dominance of few platforms can be unfavorable to creators(2) Top Players in Chinese Podcast Market

15 January 2020 · Bertelsmann Latin American Markets Still Small,
but Listenership Rapidly Expanding Four fastest growing podcast markets are Spanish speaking countries Notes: (1) “Top Growing Podcasting Countries – March 2019,” Voxnest, Apr 2019 (2) “Univision: The Data Reveals A Growing Opportunity For Spanish-Language Podcasts,” InsideRadio, Mar 2019 (3) Spotify Form 20-F, Feb 2019 ▪ Opportunities: ▪ Spanish is the fourth most-spoken language in the world – Spanish content maintains relevance across many countries ▪ The top four fastest growing countries for podcast listenership are Spanish speaking (Chile, Argentina, Peru, Mexico)(1) ▪ 4.8m US-based Hispanics listen to podcasts; 61% say they listen to more podcasts than they did a year ago(2) ▪ Spotify, armed with strong Spanish language content offerings, has built foothold in the region; Latin America was the company’s fastest growing geography in 2018 (22% of total MAUs, 35% growth YoY)(1)(3) ▪ In Brazil, monthly podcast consumption on Spotify has been growing by 21% on average since Jan 2018(4) and 51% of the “online” population listen to podcasts monthly(5) ▪ Risks: ▪ Digital advertising markets are still small, particularly in audio, and are among the lowest CPMs globally(1) ▪ Spotify acknowledges challenges monetizing their free-tier, ad-supported user base in Latin America(3) ▪ Limited monetization opportunities and funding sources constrict content supply relative to availability of creative talent(6) 4) “Podcast market booms in Brazil,” Angelica Mari, Nov 2019 5) Reuters Institute Digital News Report 2019 6) “The keys to starting a podcast business in Latin America,” Erick Yañez Navarro, Apr 2019

16 January 2020 · Bertelsmann Two Growth Vectors Expected to
Drive Progress in Podcast Market BDMI believes the podcast market will continue to grow because… Audio content consumption is nowhere near saturation and obvious gaps in consumer education exist Technological advancements in podcast advertising driving demand from marketers + untapped revenue streams in direct-to-consumer monetization provide upside

17 January 2020 · Bertelsmann Notes: Source unless otherwise noted:
Edison Research, “The Podcast Consumer 2019” (1) “Podcasts Are Getting Shorter”, Megaphone, July 15, 2019 Two Growth Vectors Expected to Drive Progress in Podcast Market Audio content consumption is nowhere near saturation and obvious gaps in consumer education exist 53 million Americans have heard of podcasts but never listened to one Among monthly podcast listeners, many are new to the format and consuming more now than ever Of monthly podcast listeners: 41% More 45% <1 Yr 46% Same 30% 1-3 Yrs 13% Less 25% 3+ Yrs 0% 20% 40% 60% 80% 100% Compared to One Year Ago, Consuming Podcasts Number of Years Listening to Podcasts Commonly cited reasons for not listening to podcasts reveal market opportunity and a need for consumer education Commonly Cited Reason “Listening to podcasts can use up a lot of data” 41% Most podcasts are downloaded at home “I don’t have a podcast app on my phone” 41% iOS and Android phones have native podcast apps “Podcasts are too long” 40% More availability of shorter podcasts: 34% of podcasts are <30 min vs. 16% in ’18(1) “You have to pay to subscribe to podcasts” 38% Paid podcast services are new and represent small percent of market “I don’t know how to find podcasts” 35% Solvable with market education / better discovery “I don’t know what a podcast is” 22% Solvable with market education “There aren’t any podcasts about music” 16% Many top publishers produce shows about music, including NPR, iHeartMedia, & Spotify % of Respondents Reality

18 January 2020 · Bertelsmann Notes: (1) Source: Nielsen &
Hackernoon, “State of Podcasts 2018” Two Growth Vectors Expected to Drive Progress in Podcast Market Upside available from adtech advancements + untapped revenue streams in D2C monetization Unscalability of podcast ad creative… Podcast adtech trails sophistication of established channels… Advertising-only models leave money on the table… Challenges: Current impediments to podcast market growth … dynamic creative, synthetic editing tools, & podcast best-practices … podcast technology enabling greater ROI for and thus demand from advertisers … major players and new entrants attempting to capitalize on trend (early results inconclusive) $ 0.72 $ 0.57 $ 0.24 $ 0.13 $ 0.11 $ 0.01 Newspapers Magazines Internet TV Radio Podcasts Average Revenue per Active User per Hour(1) Monetization Lags Other Ad Channels 1 2 3 1 2 3 Opportunity: Recent tech advancements / industry activity illuminate positive trends

19 January 2020 · Bertelsmann Notes: * indicates BDMI portfolio
company Two Growth Vectors Expected to Drive Progress in Podcast Market Upside available from adtech advancements + untapped revenue streams in D2C monetization (cont.) Opportunity: Recent tech advancements / industry activity illuminate positive trends ▪ Current ad model is high touch ▪ Over 50% of podcast ads are still edited-in / baked-in ▪ Two-thirds of ads are host-read, one-third are pre-produced Unscalability of podcast ad creative Challenges: Current impediments to podcast market growth Dynamic creative, synthetic editing tools, & podcast best-practices 1 1 ▪ Dynamic creative has potential to scale podcast advertising as it did for display ▪ Synthetic audio tools enabled scaled content creation ▪ With hindsight, podcasts can avoid Web 2.0 pitfalls e.g. oversaturation & non-nativeness – podcast advertising best-practices already emerging “The new standard for data- driven creative” *

Drive Progress in Podcast Market Upside available from adtech advancements + untapped revenue streams in D2C monetization (cont.) Opportunity: Recent tech advancements / industry activity illuminate positive trends Benefits of Web / Display ▪ Audience Analytics ▪ Attribution ▪ Dynamic Targeting ▪ Interactivity Podcast adtech trails sophistication of established channels Challenges: Current impediments to podcast market growth Podcast technology enabling greater ROI for advertisers 2 2 Example podcast adtech developments ▪ Dynamic ad insertion, unlocking inventory in catalogs – 49% of ad revenue came from dynamically inserted ads in 2018(1) ▪ programmatic offerings grow the advertising pie and reduce friction in ad sales ▪ cross-platform attribution for podcast advertising ▪ competitive intelligence ▪ interactive audio advertising Inherently difficult in audio formats * Notes: (1) Source: “IAB FY 2018 Podcast Ad Revenue Study” * indicates BDMI portfolio company *

Drive Progress in Podcast Market Upside available from adtech advancements + untapped revenue streams in D2C monetization (cont.) Opportunity: Recent tech advancements / industry activity illuminate positive trends Early indications of consumer willingness to pay: ▪ Membership Models ▪ Live / Events ▪ Merchandise Advertising-only models leave money on the table Challenges: Current impediments to podcast market growth Major players and new entrants attempting to capitalize on trend(1) 3 3 Notes: (1) Early results are inconclusive. Well-publicized challenges with Luminary launch in 2019 not thought to be indictment of market opportunity. * indicates BDMI portfolio company * Content: Non-Ad Revenue Enablement:

22 January 2020 · Bertelsmann Section II The Podcast Listener

23 January 2020 · Bertelsmann Podcast Listeners Are Disproportionately Young,
Wealthy, & Educated 71% 10% 11% 8% 59% 12% 17% 12% 0% 10% 20% 30% 40% 50% 60% 70% 80% < $75k $75k - $100k $100k - $150k $150k+ Demographics by Annual Income 32% 26% 19% 20% 20% 27% 25% 28% 0% 5% 10% 15% 20% 25% 30% 35% High School or Less Some College Four-Year College Degree Some Grad School or Advanced Degree Demographics by Education Level 9% 28% 32% 31% 10% 39% 35% 16% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Age 12 - 17 Age 18 - 34 Age 35 - 54 Age 55+ Demographics by Age Notes: Source, unless otherwise noted: Edison Research, “The Podcast Consumer 2019” (1) Source: Stitcher, as presented at the IAB 2019 Podcast Upfront, Oct 2019 Most over-indexed demographics 31% of new listeners (<1yr) are under 24 years old(1)

24 January 2020 · Bertelsmann Podcast Listeners are Curious &
Seeking Entertainment “Learn New Things” & “Be Entertained” are top two reasons given for podcast consumption % of Monthly Podcast Listeners That Have Listened In Order To: Notes: Source: Edison Research, “The Podcast Consumer 2019” 24% 37% 47% 51% 60% 71% 74% Have Companionship Escape Feel Inspired Relax Stay Up-To-Date With Latest Topics Be Entertained Learn New Things

25 January 2020 · Bertelsmann Listener Profiles Illuminate Advertising Value
and Market Growth Potential ▪ Despite previous challenges identifying unique listeners, early growth in the podcast advertising market was buoyed by the fact that the medium reaches a high ROI demographic ▪ Improvements in technology are making these general demographic observations less relevant for advertisers as high-value, hyper-targeted audience segments are reachable Takeaways Market Growth Advertising Value ▪ Early demographic trends in podcasting reflect usage by groups that are typically early adopters of new technologies ▪ Podcast discovery has been predominantly self- researched or word-of-mouth, effectively perpetuating these demographic trends until new discovery solutions arise(1) ▪ As the medium matures, particularly around content offerings and discovery mechanisms, podcasting will democratize and appeal to a larger base of potential listeners ▪ Growth is coming from non-core demographics (e.g. among new listeners, 65% female, 30% non-white(2)) Notes: (1) Source: Edison Research, “The Podcast Consumer 2019” (2) Source: Stitcher, as presented at the IAB 2019 Podcast Upfront, Oct 2019

26 January 2020 · Bertelsmann Section III The Podcast Creator

27 January 2020 · Bertelsmann Variety in the Podcast Content
Market Appeals to Wide Range of Listeners Listeners want a diversity of show types, and savvy publishers are supplying Over 700k Active Podcasts With a variety of genres(1) Genre % of Weekly Listeners Consuming / wk Comedy 36% News 23% Society & Culture 22% Sports 15% True Crime 12% Arts 11% Business 10% Religion & Spirituality 10% TV & Film 8% Science 6% Notes: (1) Source: Edison Research, “comedy, news, and society and culture podcasts most listened-to genres in podcasting”; (2) PodTrac; * indicates BDMI portfolio company The most popular shows are general interest / news… … and popular new shows are mix of true crime, comedy, and culture. Top 10 Podcasts by Total Audience – Nov 2019(2) Top 10 New Podcasts of 2019 by Avg Downloads / Episode(2) Podcast Publisher 1 The Daily NYT 2 Up First NPR 3 Stuff You Should Know iHeartRadio 4 This American Life This American Life 5 Ben Shapiro Show Daily Wire 6 Pardon My Take Barstool Sports 7 Call Her Daddy Barstool Sports 8 Wait Wait… Don’t Tell Me NPR 9 Planet Money NPR 10 NPR Politics Podcast NPR Podcast Publisher 1 The Shrink Next Door Wondery* 2 The Ron Burgundy Podcast iHeartRadio 3 Over My Dead Body Wondery* 4 Man in the Window Wondery* 5 The Thing About Pam NBC News 6 Bad Batch Wondery* 7 White Lies NPR 8 Dolly Parton's America WNYC 9 The Mysterious Mr. Epstein Wondery* 10 Chelsea Handler: Life Will… iHeartRadio Top publishers are a mix of radio, traditional, digital, and podcast- first publishers Top 10 Podcast Publishers – Nov 2019(2) Publisher Publisher Category US MAUs (millions) Active Shows 1 NPR Radio Publisher 22.2 67 2 iHeartRadio Radio Publisher 21.2 327 3 New York Times Traditional Media 10.5 10 4 Wondery Podcast-First 9.9 82 5 PRX Radio Publisher 9.1 81 6 Barstool Sports Digital Publisher 6.8 32 7 ESPN Traditional Media 5.8 62 8 WNYC Studios Radio Publisher 6.6 54 9 NBC News Traditional Media 5.5 27 10 This American Life / Serial Radio Publisher 4.7 2 *

28 January 2020 · Bertelsmann Opportunity for Traditional Media to
Establish Leadership in Podcasting Outside of a few key exceptions, traditional media investment in podcasts still exploratory To date, podcast content creation has been dominated by radio, podcast-first, and indie publishers. In general, traditional media companies have not converted existing audiences to audio audiences at scale, and investment has been mostly exploratory. However, with visibility to a market size above $1B, certain early movers are laying the ground work ahead of material revenue opportunities. Traditional media’s involvement in podcasting typically takes the form of either: 1) Repurposing existing content – news, talk show formats translate well across media formats; not always 1:1 copy, but demand and popularity are proven; 2) Companion podcasts – allows traditional media companies to own more of the conversation around their existing content with analysis, behind- the-scenes access, etc. (e.g. “The Good Place: The Podcast” by NBC) Some also employ podcasts for validating IP (e.g. The Weekly TV show by the New York Times) Notable exceptions to these trends in the US include The New York Times, ESPN, and NBC – each have successfully translated content into audio formats and created unique programming specifically for audio, and listeners have followed (all are among top ten publishers in the US).(4) Relatively little investment in the medium by peers presents an opportunity for a traditional media player to establish itself as a leader early in the market’s evolution. Recent announcements reveal a recognition of attractive trends and a doubling down by a few traditional players (e.g. NBC News in partnership with Wondery*(1), UCP gets into podcast creation(2), WarnerMedia building podcast ad sales team and stable of shows(3)). Notes: (1) “NBC News Plans to Double Original Podcasts in Deal with Wondery,” AdWeek, Kelsey Sutton, Oct 2019; (2) “UCP Gets Into Podcasting,” Deadline, Nellie Andreeva, Nov 2019; (3) “WarnerMedia sets up podast ad sales team,” TheDrum, Andrew Blustein, Oct 2019; (4) PodTrac; * indicates BDMI portfolio company * Example: NBC Podcast Strategy Audio replica of weekly TV show Mix of repurposed and original content Companion podcast to popular TV show

29 January 2020 · Bertelsmann Bertelsmann in Podcasting Market leadership
in Germany born from ability to leverage Bertelsmann IP and infrastructure Bertelsmann division, Audio Alliance, is a production company developing all podcasts and audio-on-demand offerings from the six Bertelsmann Content Alliance partners, Mediengruppe RTL Deutschland, RTL Radio Deutschland, UFA, Verlagsgruppe Random House, Gruner + Jahr, and BMG. Audio Alliance works with Bertelsmann divisions to leverage existing IP and network personalities into high quality audio programming. On the back of traditional media infrastructure, Audio Alliance is the largest content producer in Germany after launching in May 2019. In March 2019, RTL Radio Deutschland launched Audio Now, a consumer offering distributing the best podcasts and audio content from German radio / digital audio. Audio Now is among the top distributors of podcasts in Germany. An advantage in understanding consumer listening habits helps inform Audio Alliance’s data-driven content creation strategy.

30 January 2020 · Bertelsmann Clear Trends Emerging in Non-Advertising
Business Models Podcast creators already monetizing through Direct to Consumer and Licensing models 1 2 Direct To Consumer ▪ Premium content ▪ Donations / tips ▪ Products / merch ▪ Events Licensing ▪ Exclusive platforms ▪ Multimedia

31 January 2020 · Bertelsmann Devoted Audiences Enable Direct to
Consumer Monetization Each of four main direct to consumer monetization channels show early indications of traction Premium Content Donations / Tips ▪ Offer first-access or bonus content on either subscription or a la carte model ▪ Can be done either in partnership with platforms (e.g. Acast Access, Glow.fm) or with private RSS feeds via horizontal audience management software (e.g. Patreon, Pico) ▪ 31% of podcast listeners, and 46% of those that listen to at least one hour per week, have paid to access podcast content behind a paywall(1) Crime Junkie bonus episodes available for $5 / month ▪ Audiences directly donate to or tip their favorite creators via donation-focused channels (e.g. GoFundMe / Kickstarter, Patreon); precedence for this model historically (e.g. public radio) and in new digital channels (e.g. tipping streamers on Twitch) ▪ Podcasting is Patreon’s 2nd largest category(2) and 13k podcasters use Patreon for monetization(3) ▪ 33% of podcast listeners, and 48% of those that listen to at least one hour per week, have donated to a podcast or podcast host(1) Products / Merch ▪ Brand-building products and merchandise, e.g. clothing, drinkware, posters ▪ As audiences “identify” with podcast content, they have shown propensity to acquire merchandise as they do for favorite brands in other categories → organic marketing & publicity for creators ▪ Many podcasts offer merch through ecommerce platforms e.g. Shopify ▪ 37% of podcast listeners, and 53% of those that listen to at least one hour per week, have purchased podcast related merchandise(1) Notes: (1) BDMI survey powered by Suzy – see next page for detail; (2) “How Patreon is Bringing Podcasters Closers to Their Audience,” Forbes, Joshua Dudley, January 2019; (3) “Podcasting & Audio Market Map,” Andreessen Horowitz; (4) “Why live podcasts are becoming a big deal this year,” Digiday, Max Willens, March 2017 Events ▪ Formats include live podcast recordings, meet & greets, festivals, audience game shows, etc. ▪ Ex: Slate has hosted live Political Gabfests since 2009 and reliably sells up to 1,200 tickets/show(4) ▪ Large scale podcast festivals incl. LA Podfest, Midroll’s Now Hear This and WNYC’s Werk It ▪ 30% of podcast listeners, and 39% of those that listen to at least one hour per week, have attended an event related to a podcast or the podcast industry(1)

32 January 2020 · Bertelsmann Among Most Active Listeners, Strong
Signals of Willingness to Pay BDMI used Suzy to survey 5,000 respondents regarding podcast listening and spending habits Have you ever donated money to a podcast or podcast host? (For example, through platforms such as GoFundMe, Patreon, Kickstarter, etc.) Have you ever attended an event related to a podcast or the podcast industry? (For example, a live recording, an event with podcast personalities, a podcast industry festival/convention) Have you ever purchased merchandise related to a podcast? (For example, a t- shirt, mug, stickers, etc.) Have you ever paid money to access podcast content behind a paywall? (For example, as a subscription or through a one time payment) Notes: Survey respondents randomized, not a representative sample of US population n=2500 n=1434 n=793 Survey powered by… Suzy is a real-time consumer intelligence platform that connects you directly to your target audience to get instant feedback on any business decision, big or small. n=2500 n=1426 n=788 n=2500 n=985 n=550 n=2500 n=1415 n=779 Respondents Who Have Ever Listened to a Podcast Respondents Who Listen to >1 Hours per Week Respondents Who Listen to >2 Hours per Week 30.5% 33.3% 30.0% 37.4% 45.7% 48.2% 39.0% 53.3% 51.6% 54.6% 42.0% 58.2% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%

33 January 2020 · Bertelsmann Quality Podcast IP & Talent
Generating Demand from Platforms & Publishers Exclusive Platforms Multimedia Licensing Strong podcast IP generating demand from other media formats Takeaways: scripted, narrative programming and personality-driven shows are in highest demand Notes: (1) “The Podcast TV Check-in,” The Ringer, Alison Herman, November 2018 * indicates BDMI portfolio company First example in the podcast-to-television pipeline(1) – an absurdist comedy talk show, first aired in 2012, based on the cult-favorite podcast Podcast publisher, Wondery*, has had 10 shows ordered to series or in active development, including Dirty John (second season announced in May 2019) Other notable examples: TV / Film Books Audio platforms are paying creators for exclusivity “Apple Plans to Bankroll Original Podcasts to Fend Off Rivals,” Shaw and Gurman, Bloomberg, July 2019 “With Big Stars and Paid Subscriptions, Luminary Aims to Be the Netflix of Podcasts,” Brooks Barnes, New York Times, March 2019 Luminary has raised $100m to pursue deals for celebrity-driven programming; rumored to be paying some creators well north of $1m. “Amy Schumer Takes Her Raunchy Humor to Spotify in Podcast Deal” Lucas Shaw, Bloomberg, May 2018 Spotify reportedly offered the comic over $1m for rights to “3 Girls, 1 Keith”

34 January 2020 · Bertelsmann Best Practices for Podcast Creators
1 2 3 4 5 The podcast market is early, and as such there are few tried-and-true formulas for content creation. Therefore, be flexible: experiment, track, and adjust. There is room in the market for both high-production value (scripted, narrative, highly produced) and easy-to-produce (e.g. conversational / unscripted) content. Leverage your existing marketing muscle – social media is powerful, promote podcasts on other podcasts you are connected to, use traditional press channels. Leveraging the effects of a network (e.g. The Ringer, Stitcher/Midroll, Wondery*) or including influential talent on the podcast are good ways to grow marketing reach. Utilize third party data to select / develop content based on your audience and what others are listening to. First party data is a potential differentiator. Advertising is still the best channel for scaled monetization; ~25k downloads per episode to attract interest from national brands, but smaller scale advertisers and D2C channels often available from beginning. In pursuing D2C channels, maintain brand voice and / or use D2C channels as a brand extension and marketing channel. Intuitively, good, in-demand content remains the best way to grow a listener base. Biggest focus should be on creating content listeners want to hear – know your audience. * Indicates BDMI portfolio company

35 January 2020 · Bertelsmann Section IV The Podcast Advertiser

36 January 2020 · Bertelsmann Scalable Advertising Models are Growing
Year Over Year Host-read ads still dominate podcasting advertising with 63% of the market Notes: Source, unless otherwise noted: “IAB FY 2018 Podcast Ad Revenue Study” (1) “Why Listeners Respond to Podcast Ads,” Backyard Media, December 2017 1. Host-Read Ads ▪ Ads read by the podcast host natively within the podcast’s content – draws from old radio practices ▪ Host personality injected into the ad, sometimes comes with endorsement – drives strong ad performance(1) ▪ Despite scalability challenges, still most common ad format 2. Pre-Produced Ads ▪ Podcast publisher / host has some creative control ▪ Typically recorded in standard lengths (:30, :60, :90) and later edited into podcasts – scalable and unlocks library value 3. Supplied Ads ▪ Pre-recorded ads supplied by the advertiser / agency without creative / production input from podcast team ▪ May have been created for radio broadcast or intended solely for podcast ▪ A small portion of all ads, but growing quickly as advertisers and agencies focus on podcasts 32.7% 66.9% 0.5% 2017 35.0% 63.3% 1.7% 2018 Host-Read Pre-Produced Supplied Revenue Share by Ad Type

37 January 2020 · Bertelsmann Improvements in Analytics Create Less
Reliance on Direct Response Ads IAB survey indicates direct response ads make up a majority, though decreasing, share of campaigns 1. Direct Response ▪ Ads with call-to-actions (often a promo code or unique URL) as a mechanism for tracking and measuring engagement 2. Brand Awareness ▪ Principal goal to raise brand awareness – no specific call-to- action for tracking 3. Branded Content ▪ Podcast content paid for and generated by the advertiser ▪ Ex: “The Message” by GE, “#LIPSTORIES” by Sephora Notes: Source: “IAB FY 2018 Podcast Ad Revenue Study” Revenue Share by Campaign Type Advertisers tending towards brand awareness and branded content as understanding of audiences & reach improve 25.4% 73.0% 1.5% 29.2% 64.2% 6.5% 38.2% 51.6% 10.1% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% Brand Awareness Direct Response Branded Content 2016 2017 2018

38 January 2020 · Bertelsmann Enterprise-Scale Brands and Agencies Beginning
to Invest in Podcasts Market built on direct response advertising now expanded to include different types of marketers $ - $ 100 $ 200 $ 300 $ 400 $ 500 $ 600 $ 700 $ 800 2015 2016 2017 2018 2019 Phase I Early advertising market built nearly exclusively on unique URLs and promo codes from direct response / performance marketers Many early advertisers were well- capitalized / venture-backed digitally- native brands, though not exclusively Phase II Influx of advertisers seeking lift on brand recognition KPIs Larger brands (F500) paying more attention, following direct response advertisers’ “smart money” Deep pocketed marketers can afford to “explore” channel while still investing meaningful capital Podcasting a defense mechanism for incumbent brands versus upstarts Traditional advertising agencies feeling pressure to be involved Industry Market Size ($ in millions)

39 January 2020 · Bertelsmann Key Developments in Data Standardization
Have Brought Industry Forward December 2018 IAB Tech Lab rolls out podcast measurement compliance certification program December 2017 Apple releases analytics service for show creators after announcing at developer conference over the summer and years of “black box” secrecy – publishers finally able to report listener engagement, create new advertising products (postroll, longer ad slots proven viable), make editorial adjustments December 2018 NPR’s Remote Audio Data system launches as open source mobile SDK December 2017 IAB releases Podcast Measurement Guidelines 2.0, clarifying definitions of audience and downloads September 2016 IAB, in partnership with 23 industry players, creates the first standardized definition of industry terms re content delivery, ad delivery, ad tracking, and audience. Credited with leveling the playing field among advertisers and creators.

40 January 2020 · Bertelsmann Why Advertise in Audio? It
Works, and It Works Well Channel is Rich in Authenticity Active Consumption for Hard-to- Reach Audience In Nascent Stages, the Industry Will Continue to Optimize High Value Advertising Channel 4.4x better brand recall compared to scroll ads, static ads, and pop-up ads(1); 54% of listeners more likely to purchase(2); 61% of podcast listeners have purchased a product or service after hearing a podcast ad(3). Podcast listening is an active, opt-in experience. Result is attentive audience. Main demographics in podcasting are likely to be ad-free in other media. 78% of podcast listeners don’t mind ads because they know sponsors support the podcast(3). Lessons learned from Internet 2.0 advertising, with industry new enough to continue to refine and set best practices – e.g. keeping ad loads low generating more value. Opportunity for early-mover brands to take advantage of learnings. Personality driven medium = natural influencer advertising models and principles. Audio is “emotionally transparent”(4). Notes: (1) Nielsen ad effectiveness study. “Podcast Advertising Generates Up To 4.4x Better Brand Recall Than Other Digital Ads” (2) Edison Research, “The Podcast Consumer 2019” (3) Stitcher, as presented at the IAB 2019 Podcast Upfront, Oct 2019 (4) “Demystifying the Podcast Ecosystem,” panel discussion by AdResults Media, Sep 2019

41 January 2020 · Bertelsmann Best Practices for the Podcast
Advertiser 1 2 3 4 5 In direct response advertising, repetition and taking the time to drive messaging home can lead to better conversion. However, strike the right balance – long ads for the sake of length may annoy listeners. Commit enough resources to meaningfully learn from results – practice A/B testing, hone the message. The best campaigns are a mix of host-read ads and dynamically inserted ads – both can inform each other. When the brand and content align, a campaign has a better chance of performing. Know the audience – not all sports fans are comedy fans, not all business-news enthusiasts are entrepreneurs. Know your goals for an advertising campaign. What KPIs will you track? Do the benefits of host-read ads outweigh the potential risks of letting go of the messaging? For performance marketing, make sure the deals are compelling enough to drive conversion. Be smart about attribution measurement.

42 January 2020 · Bertelsmann Section V Podcasts & the
Capital Markets

43 January 2020 · Bertelsmann 0 5 10 15 20
25 30 35 $ - $ 20 $ 40 $ 60 $ 80 $ 100 $ 120 $ 140 $ 160 2013 2014 2015 2016 2017 2018 2019 Announced Aggregate Funding Amount Number of Deals Venture Funding Increasing, But Concentrated in a Few Bets In 2019, more podcasting companies raised venture or growth capital than any previous year Announced Funding Amount ($m) Number of Deals Podcast Venture Activity by Year(1) ▪ Venture activity in podcasting is growing, but still small relative to other categories ▪ Total venture investment limited by current market size – VCs interested in the category are making bets on accelerated market growth ▪ Following acquisitions such as Stitcher, Gimlet, and Anchor, few independent players with significant venture funding remain ▪ Total investment is concentrated and the landscape is still young – 67% of announced funding in 2019 went to Luminary and Acast; only 5 deals were over $10m Notes: (1) Source: CBInsights; includes global venture and growth capital investments made in podcast companies * indicates BDMI portfolio company * * * *

44 January 2020 · Bertelsmann Select Podcast / Audio M&A
Transactions In a podcast arms race, major audio platforms have been the biggest spenders Notes: (1) Source: CBInsights, press releases, public filings Acquirer Acquired Companies Transaction Details Commentary ▪ Gimlet acquired in Feb 2019 for $230m ▪ Anchor acquired in Feb 2019 for $170m ▪ Parcast acquired in Mar 2019 for $56m ▪ Spotify doubling down on podcasting and originals as way to lower average content cost ▪ Most aggressive acquirer in 2019, buying across whole value chain ▪ Publicly acknowledged big budget for more acquisitions ▪ HowStuffWorks acq. in Sep 2018 for $55m ▪ Jelli acquired in Nov 2018 ▪ RadioJar acquired in Feb 2019 ▪ HowStuffWorks was an early podcast content network → synergistic pairing with iHeart's digital audio assets ▪ Following bankruptcy in 2018, podcast capabilities in content and tech have helped lift iHeart’s top and bottom lines ▪ Remaining 55% of Cadence13 acquired in Aug 2019, representing EV of $50m ▪ Pineapple Street Media acquired in Aug 2019 for $18m ▪ Acquired capabilities in production (incl. partnerships with leading media brands) and services for creators (auddev, advertising) ▪ The three companies had more than 150m downloads in Q2 2019 ▪ AdsWizz acquired in Mar 2018 for $145m ▪ Pandora publicly confirmed commitment to programmatic audio adtech and podcasting at time of acquisition ▪ PRX and PRI merged in Aug 2018 ▪ Merger of two public radio networks in recognition of podcast tailwinds; no money changed hands, but $10m growth capital from WGBH ▪ Pocket Casts acquired in May 2018 ▪ Partnership among leading publishers to acquire podcast app – recognition of industry need for better discovery and UX Major Audio Platforms Spotify made biggest splashes in podcast M&A markets in 2019

Transactions (cont.) Traditional media companies have made limited number of acquisitions; EW Scripps the exception Notes: (1) Source: CBInsights, press releases, public filings Acquirer Acquired Companies Transaction Details Commentary ▪ Midroll acquired in Jul 2015 for $60m ▪ Stitcher acquired in Jun 2016 for $4.5m ▪ Triton acquired in Oct 2018 for $150m ▪ Omny Studio acquired in Jun 2019 ▪ Acquisitions across the value chain: content, technology (ad serving / analytics), ad sales, distribution ▪ Stitcher is primary podcast brand and parent to Midroll, others ▪ Acquisition of Midroll included Earwolf, which merged with The Mid Roll in 2014 to form Midroll Media ▪ Heartbeats acquired in Sep 2019 ▪ Danish magazine company acquired one of Denmark's leading producers of podcasts ▪ Pacific Content acquired in May 2019 ▪ An existing radio broadcaster, Rogers acknowledges emergence of podcast format in audio landscape and desire to be aggressive in trend ▪ AudioHQ acquired Oct 2017 ▪ UK-based media company acquired US-based digital audio advertising sales company Traditional Media As traditional media companies seek to grow podcast market share, additional acquisition activity should follow

Transactions (cont.) Podcast-first companies have made strategic acquisitions for product development or market share Notes: (1) Source: CBInsights, press releases, public filings * indicates BDMI portfolio company Acquirer Acquired Companies Transaction Notes Commentary ▪ BirchSound acquired in Dec 2019 ▪ Deal accelerates move into South Korean podcast ad sales market – BirchSound has significant share of country’s existing market today ▪ Lyrebird acquired in Sep 2019 ▪ Editing toolkit for podcasters with VC backing acquires AI capabilities through Lyrebird ▪ Early days for AI-enabled audio content, but likely to become important tech advancement in scaling creation ▪ Pippa acquired in Apr 2019 ▪ Supports Acast’s international expansion ▪ Opens platform up to consumers and small scale hosting – long-tail monetization had been on roadmap ▪ Spreaker acquired in Jan 2018 (Spreaker and BlogTalkRadio merged in Aug 2017) ▪ Monetization and long-tail publisher tool suite allowed for immediate market share growth; Voxnest has since leveraged Spreaker technology to move upstream and launch Enterprise services in Jan 2019 ▪ Cast Feed Validator acquired in Nov 2017 ▪ Acquired additional technology offering for podcast creators Podcast-First Companies Available capital from this buyer set is limited, but with growth, independent platforms will increasingly turn to M&A *

Transactions (cont.) Technology platforms have been largely uninvolved with podcast M&A markets Notes: (1) Source: CBInsights, press releases, public filings Technology Platforms Following Spotify’s aggressive moves in 2019, technology platforms like Google and Apple may be acquisitive in 2020 Acquirer Acquired Companies Transaction Notes Commentary ▪ 60db acquired in Oct 2017 ▪ Acquihire for digital audio tech talent ▪ Swell acquired in Feb 2019 for $30m ▪ Pop Up Archive acquired in Dec 2017 ▪ Two relevant digital audio technology acquisitions to date ▪ Digital radio app Swell acquired and promptly shuttered; likely acquihire for tech talent

48 January 2020 · Bertelsmann Category Transaction Notes Commentary Digital
Media Publishers ▪ HQ Education acquired HempSession in Mar 2019 ▪ Hacker Noon acquired CryptoDisrupted in Jun 2019 ▪ WagerTalk acquired in Aug 2018 ▪ Small digital media publishers have acquired podcast brands, which contribute audience and industry credibility to new parent companies ▪ Larger digital media publishers that have pursued podcasting have largely elected to build given low start-up costs, but as industry matures may look to acquire talent or market share Non-Media ▪ Robinhood acquired MarketSnacks in Mar 2019 ▪ Consumer fintech company growing media offering for customer engagement, including popular daily business podcast ▪ BDMI expects audio content will become more common in other products as a mechanism of customer acquisition/retention Corporate Investment ▪ Sony Music invested in Neon Hum in Dec 2019 ▪ Transaction terms unknown, but indicates music labels are paying attention to podcasts ▪ Strategic investment likely to become increasingly common way for corporates to get involved, particularly as independent podcast companies reach larger scale Other Notable Podcast / Audio Transactions Notes: (1) Source: CBInsights, press releases, public filings

49 January 2020 · Bertelsmann Section VI Representative Companies Across
the US Podcast Value Chain

50 January 2020 · Bertelsmann Representative Companies Across the US
Podcast Value Chain L i s t e n e r C r e a t o r Verticalized content or specialized UX Publishers Creator Software Monetization Enablement Listening UX Advertising Enablement Non-Ad Enablement Traditional Media / Radio Podcast-First Digital Publishers Indie audiochuck Generalist consumer apps ** Notes: includes select companies with estimated substantial portion of business based in US; excludes majority services businesses e.g. agencies and production houses; * indicates BDMI portfolio company; ** indicates retired brand (Exchanges, Networks, Creative, Analytics, Promotion, etc.) (Recording, Editing, DAWs, etc.) * * * * * *

51 January 2020 · Bertelsmann BDMI in Podcasting BDMI Portfolio
Companies… … advertising on podcasts … creating podcast content “New iHeart-Fatherly Podcast ‘Finding Fred’ Celebrates Kid TV Legend Fred Rogers,” Inside Radio, October 2019 “Wondery and The Athletic Launch The Lead,” September 2019 exited exited exited BDMI Podcast / Audio Investments Dynamic creative and personalization for digital audio; combines known data points about an audience member to automatically create and distribute unique, personalized ads. Clients include brands such as Nissan, Sky, and Bauer, and audio companies such as Pandora. End-to-end technology stack for podcast publishers, providing hosting, dynamic ad insertion, audience analytics, and advertising inventory (programmatic and direct sold). Delivers hundreds of millions of downloads for customers such as NBCU, Marvel, Viacom, Google, AMC, and The New York Times. Podcast publisher ranked fourth among all publishers by monthly audience and responsible for hit shows such as Dirty John, Dr. Death, Gladiator, American Scandal, Business Wars, and 8 of the Top 20 Shows of 2019 (Podtrac). Advertising analytics technology helping brands more acutely track ROI of podcast advertising investment. Matches listeners to purchasing behavior across platform and channel.

52 January 2020 · Bertelsmann January 2020 Thank You

Podcast Market Deep Dive - BDMI - Jan 2020

Podcast Market Deep Dive - BDMI - Jan 2020

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