Have podcasts sold out?
All you need to make it in podcasting is an idea, a laptop and a microphone. At least, that’s been the received wisdom since the medium began its current boom six or seven years ago: it’s an inherently amateur, democratised means of communication, with the vast majority available for free.
But is all that changing? Last week saw the launch of Luminary, a podcast platform with $100m of venture capital funding behind it, and deals already signed with Malcolm Gladwell, Lena Dunham, Trevor Noah and Conan O’Brien. The big boys have arrived, and their podcasts aren’t going to try and eke out profit by running ads for mattresses, beer clubs or build-your-own websites. “We want to become synonymous with podcasting in the same way Netflix has become synonymous with streaming,” Luminary chief executive Matt Sacks said, explaining that the service would paywall its best content and charge users an $8 monthly subscription to unlock it.
This follows Spotify’s decision to intensify its shift into speech-based audio by purchasing Gimlet Media, the studio responsible for Crimetown, Reply All, StartUp and various other hit podcasts, reportedly for more than $200m. The streaming giant has also signed the likes of Amy Schumer to produce exclusive podcast content.
Spotify has an advantage here that isn’t just about its spending power. Its customers are already over the hump of agreeing to pay for content, because they’ve done it to listen to music without adverts. Yet the people backing Luminary clearly think paid-for podcasts are the coming thing.
“The Chinese podcast market is driven by paid-for subscriptions, so we know it can work,” says James Cridland, editor of podcasting newsletter Podnews and a former BBC and Virgin Radio executive. “But it’s a big shift for Western podcast listeners, who have been used to free content, to have to start paying.”
“It’s a further indication of the Wild West nature of podcasting,” says Steve Ackerman, MD of radio and podcast production house Somethin’ Else. “There are lots of different models being tried out and you’d be a brave man to bet which one’s going to succeed.” Ackerman points out that one of his clients already operates on the paywall model: Audible, which was purchased for $300m by Amazon in 2008, is best known for audiobooks but increasingly focuses on podcasts, dramas and other subscriber-only content.
The longterm success of Luminary, Audible and other paywalled ventures will obviously depend on convincing consumers to pay. The flipside of that is whether the currently dominant business model, of podcasts available at no charge but which include adverts, can sustain itself.
There’s every indication it can. Whereas digital journalism has struggled to convince readers to click on ads or even to not use ad-blockers to avoid them altogether, podcast listeners are receptive to sponsor messages. Skipping ads is as easy as tapping the button in the app that springs the audio forward by 15 or 30 seconds, but research last month by Business Insider found that most listeners don’t do that; a 2017 Canadian survey by Statista put the figure for podcast fans who don’t skip ads as high as 77%.
Part of the explanation for that is the growing phenomenon of the “host read”, where a show’s presenter also voices the ads. “It’s also down to the way podcasts are consumed,” says Ackerman. “It tends to be in tandem with some other activity. If you’re running or cooking or commuting, are you going to get your phone out of your pocket and press the button when it’s only 30 seconds and, particularly for the host reads, those are in the style of the podcast? Lots are entertaining in their own right.” Anyone who subscribes to, for instance, The Adam Buxton Podcast will know what Ackerman means.Free, ad-supported podcasts offer their authors a creative freedom that has to be sacrificed if the content is paid for up front, and exclusively owned, by a big content provider. In that scenario “you’ve in effect got a commissioner”, explains Ackerman, although he adds that this compromise is well worth it if the podcast has high up-front costs: “Anything that’s scripted narrative or drama – those are expensive.”
Higher production values are where paid-for podcasts make sense. Oldschool, lo-fi podcasts will, Luminary hopes, not be in the same league as what might be the moneybags new platform’s key commission – Anthem: Homunculus, a 10-part musical by Hedwig and the Angry Inch creator John Cameron Mitchell, starring Glenn Close and Patti LuPone. “I’m very interested in pushing podcasts to a cinematic level of storytelling,” Mitchell told The New York Times.
Spotify’s new acquisition Gimlet, meanwhile, is perhaps best known for the original drama Homecoming, which started as a podcast before being adapted for TV. On Amazon Prime it had Julia Roberts and Bobby Cannavale in it, but the podcast version was scarcely less starry: Catherine Keener, Oscar Isaac and David Schwimmer were all in it.
Million-dollar productions bankrolled by big companies whose subscription cost listeners are willing to pay, and free podcasts funded by ads that listeners are happy to sit through, are both likely to have a place in this rapidly expanding arena. Research by the podcast ad agency Acast in March last year found that almost a quarter of Britons listen to some podcasts, and that a fifth of those had only started in the previous six months. PriceWaterhouseCoopers estimates, meanwhile, that ad revenue from podcasts will top $1bn globally next year.
It’s not a straight choice between two funding models, either. Another big new podcasting player, Himalaya, which matches Luminary’s $100m in startup capital and has links to Chinese podcasting giant Ximalaya FM, is a free app, but will give users an option to “tip” podcasts via small online payments. This echoes how smaller podcasts can already become going financial concerns, beyond selling ads: asking their fans to fund their favourite podcast directly, usually via the paymonthly content support service Patreon.
Football-banter podcast Top Flight Time Machine is one such show. “It was growing in popularity and we wanted to do more,” says Andy Dawson, who co-created the podcast with Sam Delaney and is also known for co-hosting Athletico Mince with Bob Mortimer. “We saw other people doing Patreons – you see people doing them for a Twitter account, which is a bit brazen – so we thought, let’s give it a whirl. We thought we might get 1,000 subscribers by the end of this year. But we’ve got 1,150 already.” Each of them pays $4 per month. “We’re making a reasonable living, almost, from a podcast we really love doing.”
Here, it’s not that listeners are paying to access a hallowed VIP content area, staffed by superstars: far from it. “Podcasts are by nature quite intimate,” says Dawson. “If it’s successful, the listener feels as if they’re part of a gang. We get lots of people on Twitter throwing the catchphrases and running gags back at us. That’s the secret to them wanting to do the Patreon thing. We’re all in it together.”
Does Dawson feel threatened by Luminary, Spotify and the rest? Can he see the end of the DIY podcast era? “I don’t think it’s the end. I think that’s [still] the crux of what podcasting is: anyone can do it, that’s the beauty of it.”