Everything You Need to Know about the Podcast Industry
“AUDIO IS HOT!” This is how iHeartMedia, a major media conglomerate, which is massively involved in the podcast industry, is presenting the current trend in its IPO filing released last April.
Indeed, this relatively new form of digital media, once reserved for amateur fans and techies, is one of the largest recurring topics in current business news. It is now impossible to ignore the boom this sector has experienced over the past few months.
Every week is marked by news of the launch of a new company, a major celebrity starting his/her own podcast, or significant investments/acquisitions of existing companies.
For example, Luminary, which seeks to become the “Netflix of podcasts”, was just launched a few weeks ago after receiving a $100 million venture capital investment before even acquiring a single user! Himalaya Media, another audio platform, also raised $100 million!
Earlier this year, the music streaming giant, Spotify, spent over $400 million to buy Gimlet Media and Parcast, two podcast producers based out of New York and Los Angeles, as well as Acast, a service helping producers launch their content. These acquisitions were part of a $500 million shopping spree, showing the public that this industry should be taken seriously.
To justify these acquisitions, Daniel Ek — the CEO of Spotify — wrote in a recent blog post: “while podcasting is still a relatively small business today, I see incredible growth potential for the space and for Spotify in particular.”
Indeed, the market is still limited, and some companies have already failed to generate serious revenues or listenership from podcasts, but despite some missteps, the market seems stronger than ever and customers are definitely listening. Shows ranging from The Daily (from the New York Times) to the Joe Rogan Experience, Stuff you should know (from HowStuffWorks), Planet Money (from NPR) or Sword and Scale (from Wondery) garner several million listeners for each episode.
Before getting into more detail about the industry, let’s start by defining exactly what a podcast is and why they are so popular right now.
Put simply, a podcast is a professional or nonprofessional, downloadable, audio show divided into episodes (sometimes seasons) that one can listen to anytime, anywhere, over the internet (regardless of their device). Formats and genres vary from fiction to conversations. Episodes can last for a few minutes to a few hours. Some are serialized, while others are made up of individual episodes that are independent from one another. Finally, the production value varies a lot from one show to another. Most podcasts are put together by a single creator, while others require production teams of up to five to six people. They usually use a subscription model, allowing new episodes to be automatically downloaded through different platforms. For now, most of them can be consumed for free.
In a media world saturated by images, podcast listenership and interest have skyrocketed over the last few years for a few reasons:
1. Podcasts do not fully compete with other forms of media. Unlike TV or movies, podcasts can be consumed while one is performing other mundane tasks, such as driving, running errands, cleaning, or working out. In a society obsessed with productivity, our ability to use our downtime to do something useful or entertaining is seducing more people than ever.
2. With a low barrier to entry, the industry is able to serve some extremely niche markets, which had been underrepresented in traditional medias until now.
3. The recent professionalization of the industry makes it even more appealing to a larger public, offering more diverse content with higher production standards.
4. Shows are easily accessible and mostly free.
5. The development of new technologies, in particular smartphones and smart speakers as well as connected cars, make it easier to consume podcasts.
6. For producers, there are more options to monetize their content.
For all these reasons and more, the end of the current decade appears to be a defining moment for this audio medium.
So, let’s take a deeper dive into this industry, starting with its historical beginnings (I), followed by the key players of the industry (II), the key metrics to understand (III), and the possible future for this promising ecosystem (IV).
1. A BIT OF HISTORY
While the podcast industry has exploded in recent years, the story of this medium started almost 20 years ago!
Podcasts are actually relatively old (for the digital age). As its name indicates, it started around the time the “iPod” was launched (late 2001). The word itself was invented in 2004 by the British journalist Ben Hammersley.
In the beginning, the industry was a very niche market, mostly used by people gravitating toward new technologies. Some companies started early, such as the French-German broadcaster Arte with Arte Radio, but listenership and engagement remained low as the technology wasn’t yet ready to allow for massive consumption.
A few dates that changed the industry and made podcasts the mainstream medium we know now:
· In 2005, podcasts become compatible with iTunes. Apple became the main distribution platform, everyone can easily listen to podcasts on their laptop or iPod.
· In 2008, Apple launched its first iPhone, allowing users everywhere to connect to the Internet and use their devise to download their favorite shows.
· 2009 marked a new wave of content production. Edgy standup comedians like Joe Rogan, Marc Maron, and Adam Carolla took advantage of the platform’s lack of regulation and censorship. This is also around that time that large radio conglomerates started to be interested in podcasting.
· 2014 marked another massive change. The true crime investigative journalist podcast, Serial, became a huge success in only three months. Its twelve episodes reached 40 million downloads and led to a larger portion of the public becoming interested in podcasts. Advertisers and new content creators started to invest more time and money into podcasting. For example, Gimlet Media was founded in 2014.
· In 2015, Barack Obama appeared on Marc Maron’s WTF podcast.
· During the last few months in 2018–2019, we have witnessed a real surge in the funding and M&A field. Gimlet, Parcast, and Anchor (two podcast studios and one podcast creation service) have been acquired for several hundred million dollars. Prior to that, iHeartMedia paid $55 million to buy Stuff Media, the parent company of HowStuffWorks, which publishes shows like Stuff You Should Know. Luminary and Himalaya Media have both received $100 million in funding. Never before has the podcast industry received that much money or interest.
Now, let’s discuss the ecosystem in more depth.
2. THE PODCAST ECOSYSTEM
Even though the podcast industry within the US is still relatively small in terms of revenues, many companies have emerged riding that wave, while others have extended their business model to make use of this new medium. Putting aside microphone and gear companies, let’s have a closer look at the major players of this new ecosystem:
a. Content Creators:
Unlike many other forms of media, podcasts were, until recently, mostly produced by amateurs targeting extremely niche markets. Professionally organized production companies have only emerged in the past five years, but they have yet to fully replace the amateurs.
On one hand, independent podcasts make up for a vast majority of content creation. On the other hand, most of these indie podcasts have close to no listeners. Statistics show that only half of the podcasts produced get more than 200 downloads each. Out of this 50%, the top 5% receive 14,000 average downloads each and the top 1% get more than 80,000 downloads each.
Professional content creators (companies created exclusively to produce podcasts or companies that have extended their business model to cover this industry) account for most of these downloads. Some major players have been created within the past few years, such as Parcast (creator of shows like Cults, Serial Killers, and Conspiracy Theories) and Gimlet (creator of shows like Homecoming, Mogul, The Pitch, and Reply All). Both were recently acquired by Spotify even though they will continue to operate independently from the Swedish audio streaming giant.
Another example of a highly successful production company is Wondery, which was created by former Fox executive Hernan Lopez. The company has raised $5 million in venture capital and is now profitable with an “eight-figure” revenue that has doubled every year for the past two years! They produce popular shows like Business Wars, Dirty John, and Dr. Death.
These companies, along with many others, produce in house or help with the content production process in some other way.
Other producers have extended their business model to include podcasting. This is the case for some news companies, especially newspapers, now offering podcasts, such as The Daily produced by The New York Times or The Intelligence produced by The Economist. These programs complete the offer from these newspapers and bring in both new revenue and new consumers. Bill Simmons’ The Ringer has massively invested in podcasts, leading to the creation of a powerful network offering more than 30 great podcasts covering sports, pop culture, and interviews and generating more than $15 million in ad sales in 2018.
I cannot cover all the content producers here, but it is worth mentioning a few more, such as NPR, Megaphone (formerly Panoply Media), Barstools Sports, Stitcher, Cadence 13, HowStuffWorks (which claimed to be the largest for-profit podcasting company in the world in terms of streams and downloads), WaitWhat, Pineapple Street Media, Listened, or Millennial focused MarketSnacks (a smaller media outlet producing podcasts and newsletters focusing on finance, which was recently acquired by the trading app Robinhood.)
Abroad as well some production companies have emerged such as Sybel in France, which is offering paying subscriptions to access their exclusive content and already has over 100,000 users as of June 2019. They just raised $5 million to support their growth. Another example is Binge Audio, founded in 2015 by a former Radio France executive.
Finally, brands have also invested in the podcast industry, not only by advertising their products, but also by producing (mostly through third party companies) their own podcasts. It is definitely becoming a popular new way to advertise a product or brand. However, it is a subtle art to promote a brand while also providing a valuable experience to listeners who should not feel like they are listening to a long advertisement.
Many brands have been successful at this game, such as Jaguar with its award winning The Discovery Adventures, Zip Recruiter’s Rise and Grind, Deloitte’s Resilient, Lyft’s Pick Me Up, Tinder’s DTR, and Microsoft’s Future (the last three have been produced by Gimlet), just to name a few.
Across the Atlantic, brands have been keen on launching their podcasts too. In 2018, the famous champagne maker Veuve Clicquot created a 15-episodes series about the life of Madame Clicquot, the first woman to own and manage a Champagne house. French companies, such as Nouvelles Écoutes and Louie Media specialize in producing this type of content.
b. Platforms:
Platforms, sometimes called directories (even though I find this term a bit dated, as these companies are offering way more than they used to), have become an essential component of the podcast industry. Most producers use third party platforms to distribute their content.
However, the line between distributors and producers is becoming blurrier with the professionalization of the industry. Some producers, like Wondery, offer premium memberships (with Wondery+) that allow their super fans to access ad free and exclusive content. At the same time, many distributors are starting to produce or acquire content producers, sometimes by acquiring production companies (like Spotify with Gimlet) or by contracting with individual producers to offer their content exclusively on their platform (this is a strategy that Luminary has adopted).
However, the most important distributor, for now, is Apple. The company still remains the primary means by which listeners access their favorite shows. Despite this fact, Apple has not yet tried to monetize its position. Uploading or downloading content to the Podcast app is still free. Also, Apple has not shown any interest in producing its own original content or to offer membership packages to access their platform.
But other companies are trying to take advantage of this vacuum and want to offer customers a premium listening experience with better discoverability and some exclusive shows either for free or for a monthly membership fee (so far, under $10/month). A few examples should be noted:
· Spotify: The music-streaming giant invested in the podcast arena a few years ago and is clearly committed to becoming a leader in this industry. It has already spent a big share of his $500 million podcast company-acquisition budget. Spotify is currently the second biggest platform for podcast listening (far behind Apple), but the company has some competitive advantages. First and foremost being the money. As a powerful existing company, using its already working business model, Spotify can afford to take over the industry by using hundred of millions of dollars to get their hands on some of the top players. Second, the company already has 200 million users, half of which are paying for their membership, constituting a huge group of potential listeners willing to adopt Spotify as their go to platform for podcasting. As if that was not enough, Spotify has recently announced it was working with Barack and Michelle Obama’s production company (Higher Ground Productions) to produce some exclusive audio content.
· Luminary: The newly launched platform already has some impressive numbers to disclose. By receiving $100 million in venture capital funding before acquiring a single customer, Luminary demonstrated that the vision venture capital firms have of the podcast industry has totally shifted in just a few years. The New York based company will offer more than 40 original shows from well-known creators and production companies, but also contract with existing shows that will become exclusive on their platform, including Russell Brand’s Under the Skin or Corinne Fisher and Krystyna Hutchinson’s Guys We F****d, among many other great podcasts. These shows already have a solid following and will likely bring new customers to Luminary.
· Himalaya: The San Francisco based platform also matched the $100 million in funding received by Luminary. Himalaya is a free platform partly founded by the Chinese podcasting giant Ximalaya FM. It has chosen an original business model, allowing listeners to “tip” their favorite hosts. This is not a new way to monetize podcasts. Sites like Patreon offer tools allowing fans to financially support their favorite podcasts. But, this is the first time in the US that this feature has been fully integrated into a podcast platform. Like other new platforms, Himalaya offers personalization, themed collections, curated shareable playlists, and some social features as well. Finally, they are seducing content producers by offering improved marketing, ad sales support, and production assistance service to compete with other distributors. Himalaya takes the idea of a “winner take all” market very seriously!
· Stitcher: Created more than 10 years ago, the company that has already been acquired in 2016 and released an award-winning app. They also offer original shows that can be accessed through their premium subscription, which is slightly cheaper than Luminary, as well as all the major features of other platforms, such as playlists, recommendations, etc. The low price may be attractive for some customers. The company also bet on the ability of new technologies to improve the accessibility of their podcasts. Stitcher is integrated into many car models and works with Amazon Echo.
· Majelan: The growing podcast industry is not only present in the US and China. Majelan, a European company based out of Paris, was created in 2018 by Mathieu Gallet (ex CEO of the Giant radio conglomerate Radio France). The platform officially launched in 2019. They will operate in both English and French, offering all the services provided by other platforms. It will be interesting to see the edge they are going to take and how they are planning to distinguish themselves from their competitors. Majelan has received almost $5 million in funding as of this writing.
Many other great platforms are also worth mentioning. Overcast is trying, for free, to improve the overall podcast listening experience using its proprietary technologies, such as “Smart Speed”, which shortens the silences in the podcast you are listening and “Voice Boost”, which helps clarify the sound of every podcast. Castbox, which is another award-winning platform, was created by an ex-Google engineer and uses proprietary technology to customize the listening experience, including features like curated podcast recommendations and in-audio deep search. Pandora, another music streaming giant trying to make it in the podcast world, partnered with SiriusXM to offer some of their content exclusively. Pinna offers podcasts for young kids. While Castro, Breaker, and Podbean are other names to keep an eye on.
c. Hosting, Ads, and Monetization:
Aside from platforms and content producers, other (less visible to the public) business models have emerged to help podcasters distribute and monetize their content: hosting platforms and advertising networks. Hosting platforms are more technical, while, advertising networks are more business centered.
However, there is no strict boundary between these business models. Some hosting platforms offer services similar to advertising networks, and others are also platforms open to the public which makes the distinction between these services unclear.
Hosting companies like Libsyn, Blubrry, Art19, or Megaphone allow podcasters to make their audio files available to the public. An audio file located solely on a computer is of no use. A hosting service is required to distribute the audio file or at least to make it available for mass consumption. Let’s think of these hosting platforms as services enabling users to transform their “raw” podcasts into consumable products for listeners. More technically, these platforms host the podcasts’ RSS feed that users use to subscribe to podcasts.
The emergence of podcast-specific hosting companies shows how much the industry has grown and improved, as well as its ability to attract new users. Over time, they have extended their range of services to help monetize podcasts through advertisement, notably with ad insertion technology.
On the other hand, advertising networks connect potential advertisers with content creators. Advertisers love podcasts, as they usually get a great return from their campaigns, especially when the host reads the ad, which creates a high level of confidence in the product. This method allows for an opportunity to promote a product differently than the normal channels. Other ads are simply inserted during the podcast, which seem more effective than video pre-roll (ads that you see before watching a video online). Video is expensive to make, thus the CPMs are low.
Advertising on a podcast can be complicated for individual podcasters. This is why third-party companies have emerged to alleviate that burden.
A few major players are offering this service, sometimes at the edge between simple ad networking and full production. Companies like Midroll, PodGrid, and Advertisecast took on the role of middleman between advertisers and podcasters.
Connecting audio makers and advertisers is also the core business of the Stockholm-based company Acast, founded in 2014. Acast provides highly necessary analytics for content creators, but they remain an advertisement marketplace before all else, offering the means of providing the best possible ads for podcasts. But like many other companies, Acast also plays the role of platform, dealing with consumers like the ones we cited above. They have already raised $70 million from various investors.
This funding allowed them to make some acquisitions. In 2019, they acquired the NYC-based Pippa, which described itself as “the simplest, smartest way to share your podcast.” Their business model is basically the same: making podcasting easy via file hosting, analytics, and monetization.
Another very interesting company to follow is Anchor. They offer all the tools to make producing a podcast extremely easy. The service is designed to give anyone, with little to no technical background, the ability to produce, publish, and monetize their audio content in one app by enabling users to record and edit audio documents on their app, connecting produced podcasts to major platforms, and offering advertising services.
Anchor claims that 40% of existing podcasts utilize their platform. Their services lower the barrier to entry even further for any new potential podcasters. The New York based company was recently acquired by Spotify, showing the intent of the Swedish giant to control both professional and amateur production. Similarly to Acast, Anchor also offers hosting services.
3. NUMBERS TO UNDERSTAND THE INDUSTRY
As I have mentioned a few times throughout this article, the podcast industry has experienced impressive growth during the last four years at every single level: production, listenership, and, of course, revenues and investments.
Production: As of 2019, around 700,000 shows were available on the Apple Podcast app! If this movement does not slow down, it means that 8,000 new shows are created every week. This could seem excessive and even a bit overwhelming for any customer. Some “must listen” lists contain hundreds of titles, but not all podcasts are created equal and only around 1% generate revenue from ads. We can compare that phenomenon with content creators on YouTube. Billions of hours of videos are available to watch, but only a handful of producers actually generate significant revenues.
Listenership: Podcast listening has grown tremendously since the inception of the medium in the early 2000s. In 2013, 27% of the US population (over the age of 12) had listened to at least one podcast in the last week. By 2018, that number was up to 44%. All signs indicate that these numbers are continuing to grow. In 2019, 51% of Americans (around 144 million people) have reported listening to a podcast! This is the first time that more than half the population has consumed this type of audio content. 32% of Americans say they listen to podcasts monthly, up from 26% a year ago. If the younger Americans are the most enthusiastic, this trend applies to all ages.
Awareness of the new medium has grown as well. During the same time period, the number of Americans that claimed to know what a podcast was rose from 46% to 64%. That number is up to 70% in 2019.
This trend can be explained by the portability of podcasts. Half of the listeners are consuming podcasts “at home”, while “in their cars” comes in second and “at work” comes in third, followed by “on public transportation” and “while working out”.
this can also be verified across the world. In France, 90.4% of the adult population listens to the radio, but 6.6% listen to podcasts. While this number seems quite low, there is a caveat that needs to be mentioned. The study that provided these statistics is only concerned with independent podcasts, not those created by radio companies. If we were to include those additional podcasts, the number would grow close to 25%.
Also, the percentage of podcast listeners in France was close to zero just a few years ago, showing that the European market will likely follow the American one soon. For example, Radio France gets 70 million downloads per month. While there is an estimated 4 million regular podcast listeners in France, there are 6.9 million weekly listeners in the UK (which is up from 5.5 million in 2017).
Revenues: To understand the size of the market, we need to first distinguish between the two main business models that currently exist in the podcast world: the “American” model and the “Chinese” model.
The American business model is mostly ad fueled, while the Chinese one is mostly subscription based, and the gap between the revenues from both models is enormous.
Podcast advertisements represented around $400 million in 2018 in the US, showing a strong increase from previous years. This amount is expected to reach $650 million by 2020, even though some studies are expecting that number to be even higher. However, this is only a small fraction of the ad revenue of the radio industry, which generated $18 billion in 2018! Many podcasters hope to acquire a bigger slice of that cake soon, even though the lines are not always clear between both worlds.
However, there is another hope for the American podcast ecosystem to see its revenues soar in the near future: the subscription-based model. Extremely popular in China, this business model allows customers to access one specific podcast or series of podcasts through a network for a monthly fee. What is interesting is that the current Chinese market is estimated to be worth $7.3B and growing (roughly twenty times the worth of the US market)!
Many of the new platforms I mentioned above are betting on importing this model to the US. It will be interesting to see if customers, formerly accosted to free audio content, will start paying for their podcasts. I strongly believe they will, as long as platforms are not simply putting a paywall between customers and existing content but adding some extra value as well. This is something I have been working on personally.
It is quite interesting to note that both business models are growing, despite offering different opportunities for content producers. Even if it is a smaller market (at least for now), the ad-supported model is certainly sustainable for some producers. US media company The Ringer said it made more than $15 million on podcast ad sales in 2018, averaging 35 million monthly downloads. Another content producer, Barstool Sport, presented similar numbers.
Investments: The aforementioned information got many Venture Capitals more interested in the industry. At first reluctant to invest in podcasts, institutional investors have become more keen on betting on the industry, especially since 2017.
We should start by mentioning a few notable, recent investments. Acast, the Swedish hosting and ad placement company, raised $35 million in a Series C round (completing $35 million from previous rounds), while the New York based recording app Anchor raised a total of $14.4 million before being acquired by Spotify. The platform Art19, which also offers hosting and tools for podcast monetization, raised $7.5 million during a Series A round. Gimlet Media, also acquired by Spotify, raised a total of $28.5 million prior to this acquisition. Other production companies that raised venture founds are: HowStuffWorks and Wondery (with $5 million each).
On the platform side, Castbox raised almost $30 million during two venture rounds, while Luminary and Himalaya both raised $100 million. We should also mention Stitcher, Majelan, and Breaker, which all have received significant investments.
Even the famous startup accelerator Y Combinator is now betting on podcasts, having invested in The Podcast App and Brew.
As we have already mentioned, a shift in business model is merely one element of the future of podcasting, but we can also expect other transformations.
4. THE FUTURE OF THE PODCAST INDUSTRY
After starting around 20 years ago, the podcast industry is entering a new wave of development and professionalization. We can foresee a diversification in monetization, as well as technological improvements and better integration of podcasts among other forms of digital media.
The Diversification of Revenue Sources: The most recent trend we have observed in the podcast ecosystem is the “Netflixization” of the industry. Podcasting was, at first, the realm of independent creators who wanted total freedom from the mainstream media. Then some production companies came along to professionalize the industry. Now, we are seeing an increasing number of big players entering the market as platforms. All of them wanting to become the “Netflix of podcasts.”
Many reasons can account for this shift. From the customer’s point of view, the introduction of new algorithms can help improve the discoverability process, which has always been challenging for podcasts. Suggestions to discover new shows could definitely be helpful. The Apple rating system, which does not seem to be very reliable, is insufficient. Google, for instance, has invested heavily in its Android podcast platform when it comes to improving discoverability by integrating a podcast search feature into their search engine. You can also search by topics and not only by title, which seems to be more in line with the desires of customers.
From a content creator’s point of view, there are also financial reasons behind upcoming changes. The Chinese market is way bigger than the American one, partly because the two countries have embraced different business models, as we have explained — one being subscription-driven and the other ad-driven.
Therefore, it seems natural that the industry is moving in this direction. However, it will be a challenge to convince customers to begin paying for content they used to enjoy for free. But large investments in new content and technology, as we have seen lately, could convince customers to take this leap.
The true question is, who is going to be the “Netflix of podcasts”. Will the industry move to a winner-take-all situation or should we expect some competition between large players? Netflix came up with the video streaming business model and enjoyed a few years with little competition, but competition is rapidly arising. Of course, the podcast world is different and several platforms are emerging at the same time with no clear winner having distinguished itself from the rest of the flock thus far.
Spotify seems to have one big advantage over its competitors, having already a large group of paying customers. However, as with the music industry, content is king, regardless of your competitive advantage. The company that will showcase the best content will win, which is why Spotify has acquired two major podcast studios.
My take on this trend is that we have seen a lot of money being poured into these platforms, but we have yet to see a “purple cow” (referring to a term coined by master marketer Seth Godin to describe a truly unique business that distinguishes itself from its competition like a purple cow distinguishes itself from other cows). This may doom some of these companies, as podcasts have been built around communities of fans. Therefore, this “platformization” will need to happen without causing the industry to lose its soul. Independent producers and big companies don’t always get along, which is another challenge these companies will have to overcome.
This tendency demonstrates that companies are searching for a better monetization system for podcasts and trying different models. Platforming is definitely a frontrunner, but other options are also entertained, such as “tipping” producers through sites like Patreon or Tipeee. Himalaya, have actually included a built-in tipping feature in its own platform.
For the foreseeable future, we can expect ads to remain the cornerstone of the US podcast market. New technologies will definitely help increase revenues from ads. For example, dynamic ads are a new form of advertising that change overtime based on the geolocation of listeners.
But ads have their limitations too. Advertisers like the podcast model because, currently, most ads are read by the host, creating an exceptional level of trust in the product being advertised. For example, when listeners tune in to The Joe Rogan Experience, they expect Joe Rogan to personally endorse a product. This is why a study found that 77% of listeners do not skip the ads on podcasts, even though doing so would be simple (clicking one button to fast forward 15/30 seconds). Shifting this model will soon lead to a dilemma for everyone. Should the industry try to scale as much as possible by lowering the value of an ad or should the industry remain true to the current system, which could result in lowering both the scalability and sustainability of the marketplace?
2019 could mark the beginning of the pivot toward paying membership. Though whether this change will be implemented through platforms or tipping remains unknown for now.
As Stitcher CEO, Erik Diehn, recently said: “We’re all testing out to see what actually sticks, is it tipping, is it a publisher-by-publisher premium subscriber model, is it the Patreon single show, single creator support model, is it a Netflix-type model? There’s not going to be one thing.”
It could indeed be a combination of different models. With advertisements for the general public and subscriptions for super fans who want to get extra content. This is already what companies like Wondery are offering with Wondery+, which is expected to account for 20% of the company’s revenue in 2019.
Crossovers Between Podcasts and Other Creative Industries: With money pouring into podcasting, overall quality is increasing and other creative industries are becoming interested by what is happening in the world of podcasts.
Beyond subscriptions, ads, and tipping, podcasts can generate revenues using the IP they produce. One good example is the amazing audio series Homecoming, produced by Gimlet Media, which has been adapted as a video series by Amazon Video (starring Julia Roberts). The show Startup has also been adapted on video and others are coming. Parcast recently announced it was working on doing the same, while Sticher has acquired the rights to Marvel’s Wolverine. Recently, Wondery released Inside Star Wars, a deep dive into the creation of one of the most popular franchises ever produced.
It also works the other way around. In France, the extremely popular TV show Plus Belle la Vie, which has aired for more than 15 years and attracted up to 7 million viewers (roughly 10% of the entire French population), now has a podcast version for fans who want more content from their favorite show.
We can easily expect more movies and TV shows to be promoted through podcasts. I would personally love hearing an audio declination of the Handmaid’s tale or Silicon Valley. Can you imagine a startup pitching competition imagined by these writers? :-)
Other possible crossovers include live events. Recently, the debate between two intellectuals, Marxist Slavoj Zizek and Conservative Jordan Peterson, was advertised like a boxing fight and sold out 3000 seats with tickets selling for up to $1,500 a piece! Like other sporting events, the “match” was available for live streaming. Another interesting, recent event is the How I Built This Summit created by NPR and hosted by journalist and popular podcaster, Guy Raz.
We are at the border of podcasting and something else, but in my opinion these trends are all part of a broader form of intellectual and entertainment content that the public seems to enjoy tremendously, despite the alleged shortening of the collective attention span. Moreover, this type of content is perfectly suited for podcasting.
This leads to a broader question: are podcasts just podcasts, or are they part of a broader audio revolution we are currently witnessing?
The industry appears to be less and less homogenous. The new products that are being created show a real change from the original, somehow dull content. Series, fictions, high production value, everything seems to show that this form of media may be bigger that it appeared originally and that podcasting may very well be only a first step away from something greater. In my opinion, we are at the beginning of an audio revolution that will lead to the emergence of powerful new shows, series, audiobooks, and lectures (something else I have been working on). This shift may require a change in terminology, as podcasts can refer to free content and might become too limiting.
The Improvement of Data: One key component of the development and evolution of the podcast industry will be its ability to gather reliable data. One reason that could explain the relatively low figures when it comes to advertisement numbers is a lack of good data.
Advertisers in charge of promotional campaigns cannot just gamble on what type of listenership they are going to get. Yet, this has not stopped advertisers from using podcasts to promote what they are trying to sell. They actually seem to trust and like the podcast model, which is promising for the future of the industry. The more data the industry is able to release, the more likely it will be able to attract more advertisement money. There are other methods advertisers have used to analyze the success of a campaign, such as promo codes, but this can only work in a limited number of situations.
Recently, new projects intended to gather additional standardized data have emerged. A few months ago, National Public Radio unveiled an open source system named “Remote Audio Data” (RAD), which any podcast can use to track the number of listeners and how far into the show they listen. Information is anonymized and podcast apps will have to build in support for the reporting system.
This has become even more important, as Apple recently saw its podcast charts manipulated by click farms, which questions the company’s credibility as a reliable source of information for both advertisers and producers.
Data is key in the digital world. It allows companies and creators to create better products and generate more revenues. Hopefully, all the factors mentioned above will allow the different actors of the industry to access more transparent and precise information about podcasting.
Conclusion
Some may argue that we are facing a new type of blogging fade. A cool new medium that will survive, but that is close to reaching its ceiling in terms of potential revenues.
I strongly disagree and tend to believe we are rather experiencing a new Guttenberg-level revolution. The growth we have witnessed so far will probably not stop anytime soon.
Even if already half the population is listening to podcasts, a study has recently shown that among the other half of non-listeners, 48% disclosed that they just did not know where to find them, while 27% said they could find the same audio content elsewhere. In sum, very few people are patently uninterested in podcasts.
Let’s not forget that audio has always been the most natural way to communicate and transmit information. For thousands of years, only an extremely small fraction of the population was reading and writing. Writing became the most popular way to communicate information not because it was the most efficient means, but because it was the most convenient. With the digitization of the economy and media in particular, new ways to share information have emerged and podcasts are the tip of the audio iceberg.
You can now access a tremendous amount of informative and/or entertaining content at any place, at any time, without limitations, and with a low barrier to entry. It is important to note that several academic studies have shown that the retention of information is the same when reading and listening. In addition, listening to content is something that can done without losing any time, while commuting, working out, running errands, etc. Thus, adding more quality time to our lives! Happy listening!
If you want to talk about the Podcast industry in Los Angeles or Paris, or just want to chat, you can connect with me via LinkedIn.
