The news: SiriusXM has struck a podcast distribution deal with Fox-owned streaming service Tubi, the companies announced Tuesday. The deal will bring video episodes of SiriusXM-owned shows like “Conan O’Brien Needs A Friend” and “Rotten Mango”—both among the top 20 US podcasts, per Edison Research—to the free, ad-supported streaming (FAST) service. The deal is non-exclusive; video episodes will remain available on YouTube, and SiriusXM may still partner with other streamers.

Zooming out: As advertiser interest in video podcasts grows and video streaming services look to expand their content catalogs, audio streamers are pouncing on the opportunity to strike lucrative licensing deals.

• Netflix has been particularly aggressive, signing an exclusive partnership with iHeartMedia last year to bring popular podcasts to the service. Netflix began streaming daily episodes of “The Breakfast Club” this month in its first attempt at building daily, appointment viewing habits.
• Netflix also has a similar exclusivity deal with Spotify.
• Tubi announced a $150 million multi-year partnership with Audiochuck last October to bring a suite of true crime podcasts to its service.
• MS Now (formerly MSNBC) and Crooked Media, creator of shows like “Pod Save America,” partnered in February to create a weekly show that compiles clips from Crooked’s podcast catalog.

Why it matters: Video podcasts have rapidly become one of the most sought-after content formats among streamers and marketers. Video streamers regard them as a low-cost, high-output format. And their power to attract Gen Z consumers—30% of whom say they primarily consume podcasts via video, per Coleman Insights and Amplifi—makes them valuable ad inventory.

Streamers like Netflix and Amazon Prime Video have spent tens of billions securing rights to sports leagues like the NFL. While those deals have helped drive increased viewership and ad revenues, they are extremely high-cost—and some services haven’t delivered meaningful results.

Podcasts and creator content offer relatively low production and licensing costs. YouTube remains the preferred platform for viewing video podcasts, and its competitors are looking to replicate its video ad dominance; Netflix’s deals required that podcasts close their YouTube pages.

Implications for marketers: Podcasting is increasingly becoming a video-first format, and moves like Netflix’s daily episodes show it taking on a daytime TV-like role in the media ecosystem. Exclusivity deals will increase competition for inventory on streaming services like Netflix, allowing them to generate additional revenues at a relatively low cost.

But while buzzy, results from video podcast ads show they are filling a unique role. Research from Sounds Profitable found that YouTube video podcasts were 25% less effective at driving purchases than audio ads, signalling that they may serve better as a channel for awareness than performance.

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