A new startup is looking to disrupt the podcast space by betting big on overseas content.
Kaleidoscope, a company founded by podcast veterans Oz Woloshyn and Mangesh Hattikudur, recently signed a distribution deal with iHeartMedia (IHRT) after securing backing from prominent investors like former MTV head Tom Freston and former Wall Street Journal and Washington Post editor-in-chief Marcus Brauchli.
"I think there's an enormous amount of room to run," Woloshyn told Yahoo Finance Live in an interview (video above). "You look at the growth in the advertising market, a lot of that is driven by new types of brands feeling more and more comfortable in podcasting."
Woloshyn noted that a lot of existing content is "somewhat homogenous" and that the current podcast market is saturated with traditional formats like true crime and the "expansion of talk radio, essentially, in podcast form."
"We saw this clear blue ocean to do international adventure stories, global stories, that you can listen to with the whole family, and bring the best of narrative podcasts from around the world [to] U.S. audiences," he added.
The executive shrugged off concerns about the pullback in corporate advertising spending.
"There is a flight to quality," Woloshyn maintained, suggesting that podcasts have the potential to build "a world of commerce" to offset potential losses. He noted that Kaleidoscope has been able to leverage strong intellectual property to create new revenue streams like merchandising partnerships, along with TV, film, and book adaptations.
Kaleidoscope’s partnership with iHeart Media includes an initial slate of six series. The first podcast, titled "Obsessions: Wild Chocolate," follows award-winning food journalist Rowan Jacobson on a trip into the Amazon to find the world’s rarest cacao beans.
"We're just looking for things that people want to evangelize," Hattikudur said. "Podcasting is such an intimate medium, and people wear their podcasts like their identity."
Hattikudur, who voices his own series centered on self-discovery through South Asian astrology and spirituality, noted that creating podcasts outside of the U.S. can be a lucrative opportunity that combats higher content costs since overseas production budgets are often cheaper.
"The economics are definitely easier," Hattikudur said, citing recent productions in Greece, India, and England, among others.
Kaleidoscope isn't the only platform looking to capitalize on the medium. Audio-only platforms have been investing heavily in podcasts as competition in the space intensifies.
The company's chief content and advertising business officer Dawn Ostroff told investors that the audio giant was still in "investment mode" and expects the podcast segment to be a "$20 billion opportunity" with continued improvements in both ad products and monetization.
Spotify CEO Daniel Ek also underscored the potential of the platform's podcast unit, estimating that it will eventually generate margins between 40% and 50%.
According to a study from the Interactive Advertising Bureau, U.S. podcast advertising revenues rose to $1.4 billion in 2021, surpassing the $1 billion mark for the first time. The bureau estimated that the market will exceed $2 billion in 2022 and $4 billion by 2024.
Alexandra is a Senior Entertainment and Media Reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at firstname.lastname@example.org