The podcast train has left the station. Are you on it?
Podcasting is at an all-time high right now, and we are seeing more publishers than ever jump on board. Both major legacy newspapers and their digital native counterparts are leaping head first into the fray, from The Washington Post and The New York Times to Slate and BuzzFeed. Where podcasting was once just sidelined to entertainment and storytelling, news seems to finally be making its debut into the sonic landscape.
It wasn’t without trying before. The New York Times bought into the podcasting hype early back in 2006 with the nowcancelled Front Page, a summary of the day’s news in five minutes. Since then they’ve launched plenty of human interest and cultural podcasts with varying degrees of success. But it’s only now that we’re seeing current-events-styled news podcasts gain success, largely spurred on by the addictive, endless coverage of the American election and the Trump administration.
It’s taken some time, but podcasting is poised to hit the mainstream with news outlets. Much like publishers had to learn that their websites need to be more than just a boring digital transcription of their print front page, the media had to learn how to adapt their content to take advantage of the unique features of the podcast medium.
A Slow Ascent
It’s taken a long time for podcasting to culminate into the popular platform it’s becoming today. Podcasting began in 1999 as an RSS feed that aggregated audio blogs. It only first gained prominence when Steve Jobs, sensing a possible new disruptive technology staring at him in the face, added a podcast directory into iTunes in 2005. From there, the medium slowly but steadily gained users, with Edison Research reporting in 2006 that 11% of Americans had listened to a podcast at least once. In 2016 that number rises to 36% of Americans having ever listened to a podcast, with 21% having listened to one in the past month. By comparison, in 2016 only 13% of Americans used Spotify monthly, 21% used Twitter and 28% used Instagram.
It wouldn’t be until 2014 that podcasting would experience its next breakthrough when Apple launched a native iOS podcast app on their phone. The sudden emergence of the app on more than 200 million iPhones around the world fueled the podcasting world’s first blockbuster hit, Serial, a true crime podcast that was the fastest podcast to reach five million downloads and streams in iTunes’ history and is still today the world’s most popular podcast at more than 80 million downloads in total.
So why should mainstream media get into podcasting?
Podcasting, as an on-demand audio mobile channel, offers so many opportunities that visual methods don’t. Podcasting’s distinct features as a mobile platform, relationshipbuilding medium, scalable channel and diverse revenue stream, provides key advantages over other mediums.
Podcasts are primarily listened to on mobile devices which makes this growing audience even more valuable to publishers. While podcasting in its earliest days started on the desktop computer, smartphone mass accessibility has enabled widespread mobile consumption with 64% of podcasts listened to on a mobile device in 2016. Which is not surprising given that mobile is now the top channel for content consumption at 2.8 hours per day.
On the digital side of news, growth in year-over-year news consumption on mobile far outpaces the growth in laptop/desktop consumption and mobile is once again proving to be the preferred device for news according to a Pew 2016 survey. Podcasting presents a mobile-first platform for media to reach their readers, new and old, on the device they use most.
As any regular podcast listener can tell you, one of the top advantages of podcasts is that they let you listen to content anywhere on the go. The mode of consumption, passive listening, combined with its mobile access allow for podcasts to reach people at times when written content cannot.
It’s a powerful proposition and opens up new ways for publishers to compete for reader attention that was never available before. People can listen to podcasts while driving, cooking, working, and exercising and more — new spaces that media and journalism in the written form would never be able to penetrate.
People already spend an average of four hours a day listening to audio, 54% of that time on AM/FM radio, according to Edison Research’s 2016 Share of Ear survey, and the opportunities are massive for media if podcasts can enter — and steal from — this market.
“From WBEZ Chicago, it’s This American Life. I’m Ira Glass. Stay with us.” Any regular listener of one of the most popular and longest running podcasts would recognize this friendly introduction delivered for more than a decade.
Podcasts rise and fall on the ability of their hosts to connect and develop a relationship with their audience. Podcasting is a distinctly intimate medium; episodes often feel like a story or a conversation and listeners really get to know the presenters.
The intimacy and relationship-building potential of podcasting is a powerful advantage the medium holds over other more traditional channels. Few journalists are as closely associated with their work the way podcast hosts are associated with their content. And this can inspire loyalty and engagement in listeners that provide value to the brand.
A stronger relationship with the audience means having a following who will consume more, engage more, and keep coming back, all of which has big revenue implications. This American Life has built up a loyal fan base over the years, millions strong, and they’ve monetized this audience sustainably through live events, advertising, and direct support. This just barely touches on the revenue opportunities of podcasting which will be in further detail later below.
Existing internal resources, like talent and brand at a media outlet, scale well into podcasting and can make for a smoother, more cost-effective transition. Podcasting at its heart, typically consists of the same kind of content produced by the news media — albeit in a very different medium and with a conversational bent. While audio content needs to be fundamentally produced and adapted differently than its written counterparts, the same journalistic skills, research, and reporting are involved in putting the stories together.
Media outlets already have the talent to scale existing editorial and digital expertise into podcasting. Journalists, researchers, reporters, editors and social media/digital producers all have skills well suited to adapt. From background investigative research to persistent interview chasing to simply knowing where and how to dig for a story, having these skills on hand means not having to start from scratch to build out a professional podcast. Scaling internal talent can significantly reduce the cost of production and lower the barrier of entry into the medium.
Production cost is also a major consideration. More so than online video, another buzzy frontier for media brands, podcasting production is relatively cheap, especially if you already have the reporting staff covered. Audio equipment is quite inexpensive and editing know-how is much easier to find or learn inhouse. A basic production set including recording equipment, editing programs and hosting service, will only cost a business $500 to $2,000 in initial startup costs, depending on desired quality. The bigger
recurring investment will be the time spent by the newly assigned staff to produce the content and eventually find potential advertisers.
We’re even seeing the early development of podcast-making apps, like Bumpers, that allow anyone with a decent smartphone to record, edit, add effects and publish a podcast from the comfort of their personal device.
The low cost of entry has given even amateurs a chance to enter audio, sometimes to amazing success, but more importantly, it gives media companies with comparatively much greater resources a low-risk opportunity to enter with a big splash.
Another important asset media outlets can leverage is their existing social networks. A significant barrier to podcasting is how difficult it is to be discovered in a crowded marketplace. Podcasting, or really any audio format, is not conducive to social media sharing despite being a digitally native platform. Unlike articles and other visual content, there is no easy way to share a snippet or highlight from a podcast on social media because of the audio format.
A receptive existing social audience will make it easier to overcome this challenge; a recognizable brand can draw listeners who recognize that its quality standards will translate to a podcast worth listening to.
The Daily by The New York Times is a great podcast example of a mainstream outlet scaling their brand and talent to great success. The newspaper reassigned one of its top political reporters, Michael Barbaro, to launch a news podcast under the Times’ distinguished name and umbrella. His first podcast, The Run-Up, covered the astonishing American election cycle and found such a massive captive audience that it spun out another news podcast post-election, called The Daily, which continues to regularly top the iTunes podcast charts.
At the end of the day, the biggest deciding factor for any media outlet going into podcasting will be the revenue opportunities. Let’s be up front, podcast monetization is still in very murky waters and as of now, will not come close to matching the revenue brought in by traditional channels. But it’s the future growth opportunities of this fresh medium and the vital imperative for publishers to diversify their income streams in an uncertain media environment that make podcasting worth the investment.
Revenue diversification is integral for publishers to survive an unpredictable industry that is seeing shrinking subscriber numbers and declining ad revenue in the face of digital disruption. We’re seeing long-time legacy publishers lean freshly on digital subscriptions, pulling away from the traditional advertisers they’ve heavily depended on before, in the hope that they’ll find a willing, paying audience.
Others yet are taking the shotgun approach, distributing their content anywhere and everywhere on global platforms like Facebook, Google, and other all-you-can-read platforms to monetize eyeballs, engagement, and innovative sponsored access models. Still others are pushing for even more novel, creative revenue streams like exclusive live events, subscriber communities, licensing out proprietary technology and even establishing donation programs. Most are doing a combination, and that’s where podcast monetization falls in.
According to Tow Center’s 2015 Guide to Podcasting, advertising and sponsorships are the most lucrative and fastest growing revenue sources for podcasts. The engaging audio format provides a compelling advertising alternative to display ads, especially when global click-through rates sit at 0.06 percent according to Google’s DoubleClick. Early surveys suggest podcast ads are not disliked as much as traditional ads because of their typically host-read format, which comes from a familiar, trusted voice and is integrated smoothly into the episode. Furthermore, the lack of established ad rate standards means CPM rates are flexible, especially if the podcast is promoting a particularly creative, high-value ad. Matt Lieber, president of Gimlet Media, a dominant player in the podcasting world, claims to have “the best mobile ad unit in existence.” Gimlet charges a premium CPM, among the highest for podcasts, for host-crafted stories about the sponsor. This creative approach shows the opportunity for innovative advertising in a world of ineffective display ads.
Another major revenue stream is direct support and subscriptions from the listeners themselves. Through sites like Patreon, podcasts can solicit their listeners to make monthly contributions to fund the content they love and gain access to exclusive features, like early access to episodes, direct input into the content they want to hear, and passes to live events.
Canadaland, a Canadian news and media criticism podcast, runs a yearly funding drive to boost subscribers and replenish churn from the prior year. They offer incentives like merchandise and their published book to encourage subscriptions, and try to keep their funding drive within a limited once-a-year timeframe to not annoy their loyal listeners.
Other revenue opportunities, though less consistent, include foundation support and live events. Organizations have donated significant sums of money to podcasts that align with their goals. The Knight Foundation donated $1 million to Radiotopia to fund new shows and push for media innovation and sustainability. Live events also provide a small revenue stream to podcasts, but their real value is in the brand exposure and listener engagement that drives hype for new initiatives.
There are still fundamental challenges to podcasting…
Podcasting has taken off, but is running into technical barriers that prevent it from reaching its full mainstream potential. Chief among the complaints is the lack of standardized and trackable metrics which scares risk-averse advertisers from diving into the platform. Available metrics often lack granular insight or demographics, can vary greatly from podcast-topodcast and rely sometimes on borderline self-reported data for smaller organizations—a less than ideal situation for advertisers who want trusted, independent data.
Downloads for example is the most widely used, basic metric, but it lacks much nuance, like the number of listens per download, the listening “drop-off” rate and the demographics of the listeners. Both are hard to detect without the right backend infrastructure that’s available to only the most well-funded networks. It’s also hard for advertisers to compare ad rates between podcasts because of these unstandardized metrics and different methods of reporting.
Behind much of these problems is the platform distribution dominance iTunes holds, at 70% of the podcast market, not unlike the distribution supremacy of Facebook and Google for digital news. iTunes provides little in terms of consumption data and metrics for the podcasts listed in its catalog, but producers cannot leave because most of their audience is on iTunes and the native iOS app. In a more striking parallel to Facebook and digital news, podcasts are at the mercy of the unclear algorithm of the iTunes chart, where many people first discover podcasts.
What’s next for podcasting?
Despite these challenges, podcasting still presents a significant growth opportunity for media outlets to reach readers where they are — and where they are going to be. Podcast consumption has steadily increased year after year and shows no sign of stopping as it starts reaching into the rich market share radio has long held a tight grip on. Radio has stubbornly emerged fairly unscathed from the digital disruption of the 2000s and as one of the last strongholds for traditional media, it’s now primed for breaking with the oncoming podcasting wave.
Advertising has reached a peak of sorts among publishers as well, where they find it increasingly difficult to financially sustain themselves on ad sales alone in our digital era. Podcasting may be the exact kind of creative medium needed to cut through the display-ad noise, and offer a new kind of compelling ad more valuable to advertisers and lucrative to publishers.
Publishers need to prepare for the next future of news and media now before it catches them off guard in the same way early digital distribution channels did, and podcasting looks to be a vital growing opportunity for media to weather the next waves of change.
Interested in doing a podcast with us or want to learn more? Let’s talk.