Subscriptions And Advertising Take New Roles In Amazon’s Podcast Strategy Shift.

Despite Wondery’s reorganization and layoffs announced this week, Amazon VP of Audio, Twitch and Games Steve Boom says podcasting is “doing incredibly well.” He says the changes are more of a response to how the medium is pivoting toward video, rather than a retreat. He says in an interview with The Ankler that Amazon has concluded that narrative podcasts and creator-hosted shows are better monetized when they have a subscription revenue stream, rather than focusing on advertising sales.

That led Amazon to the conclusion that those shows would be better housed under its Audible banner, which has already built a sizable subscription business. “It made sense for them to become part of Audible, which is a premium business, versus trying to run them as a standalone ads-only business,” Boom explains.

For its high-profile video podcasts such as New Heights with Travis and Jason Kelce, Armchair Expert with Dax Shepard, and LeBron James’ Mind The Game, Boom tells The Ankler that he still believes there is a “very strong advertising business model, particularly around sponsorships” to support those series. He points out there are other potential extensions inside the Amazon ecosystem, including e-commerce. “That’s really interesting for us, but it’s also really interesting for the creators themselves,” Boom says. “In fact, for a lot of them, that’s one of the reasons they want to do business with Amazon in the first place.”

Boom also tells The Ankler he plans to be more hands-on when it comes to advertising going forward.

As part of this week’s restructuring, Angie More, who was previously Spotify’s Head of Global Podcast Sales before jumping to Amazon two years ago, will now lead ad sales for Wondery and Amazon Music. The Amazon Music sponsorships sales team, led by Amy Grabisch, will also be put under a new More-led team.

Boom says he still thinks advertising remains an “increasingly exciting and interesting” opportunity for Amazon, one that can become even bigger than what it has been with the previous Wondery structure. “I wanted personally to be closer to that part of the business,” he says in the interview.

Yet there is no denying that the real motivation behind the restructuring was what is happening with video. Boom tells Variety it was “really what prompted” making such a radical move for the nine-year-old company.

He says it became “pretty clear” during the past several months that Amazon needed to focus on where it has been seeing the most success in recent years. It means that the studio that once produced breakout audio series like Dr. Death and Dying For Sex will instead put more of its focus on video-centric shows that are quicker and cheaper to produce, while also having potentially bigger revenue potential.

“This was definitely a strategic decision,” Boom tells Variety. “Even though the overall audience for podcasting is growing, with that much growth in content, you have a very uneven environment where some shows are growing their audiences, others are flat and others are down.”