2019 has already shaped up to be a huge year for podcasting. With the announcement of the $200M acquisition of Gimlet Media by Spotify, and the release of new subscription platforms like Luminary and Brew, the simple concept of the ability to stream content like talk radio on demand on any device over the internet is finally gaining mass market appeal, more than 10 years after its inception.
To understand what market conditions are now enabling the growth of this relatively new medium, and what trends we can expect to see in the coming years as podcasting as an industry matures, we went to the RAIN Podcast Summit this month and heard from some of the biggest names in the business, like NPR, iHeartRadio, and PRX.
Here are some of the biggest takeaways you should know.
How Discovery is Driving Consumption
Until recently, podcast content based on specific interests of the listener has been notoriously difficult to find. Even if you already consumed other podcasts, the only way to discover new shows, aside from the limited functionality of the recommendations on the iTunes podcast platform, was to hear about a show from one you were already listening to, or more likely from a friend or a co-worker who was a big fan.
While hearing about one business podcast from a trusted host of a show you love may be a great way to find another one, with the creation of completely new types of content in recent years beyond the typical interview show format, such as true crime, fictional story telling, and even children’s shows, it became increasingly more difficult to find new shows that you might not even know you’re looking for. In part, because new shows have low to no budget to spend on marketing, and rely heavily on word of mouth alone.
But with advertisers flocking to this growing medium, with total ad revenue growing to $600 million in 2018, the technology companies that are hosting and distributing podcasts, like Stitcher, Castbox, iTunes, and Google Podcasts, are paying attention to discovery like never before.
When Google Podcasts launched in June of 2018, it seemed like just another entrant into an already crowded podcast platform space, but according to their Head of Product, Zack Reneau-Wedeen, Google is taking a different approach. They’re not trying to compete with all the other platforms going after people who are already consuming podcasts regularly, but rather trying to reach the 56% of Americans who have never listened to a podcast. And that number is even higher in countries like India, Russia and Brazil where there’s still not a lot of podcast content in their native languages.
The way that Google Podcasts is approaching the discovery problem today is quite interesting. First of all, if you’re an Android user, you’re not even required to download their podcast app. You can search for content on your mobile phone right in their search engine which is preloaded with their discover tool that serves up news, weather and other relevant information, and it will also give you relevant podcast results that you can listen to right from the search results.
They also want to be the first platform that allows you to search for topics based on the content of the shows themselves, and not just the show name or episode titles, and they’re slowly rolling out this functionality now. The future, according to Mr. Reneau-Wedeen, is that all the podcast audio that exists will be converted into text, which will allow Google to index the content just like it currently indexes websites, and return relevant results to you based on exactly what is said during a show.
You can imagine asking your Google Home or Alexa device about how GDP is calculated, and instead of a monotone voice giving you a generic reply, you’ll get a mini podcast episode explaining the concept in detail.
All this is great news for consumers who just want to hear content that’s most relevant to them, and great for emerging shows that are not currently getting the attention they could, simply because they’re difficult to find.
The Future Of Podcast Monetization
The consistent year over year growth in aggregate advertising dollars flowing to podcasting is certainly exciting, but at its current levels, it’s not enough to sustain the production of great shows indefinitely.
That’s why podcast companies and creators are getting more creative with how they generate income from shows.
Smaller shows often rely on subscriptions from fans via tools like Patreon that allow you to ask your listeners to pay for things like additional, gated content, or merchandise. But not surprisingly, the shows that are generating sustainable levels of income that allow them to continue producing new content are the ones that are getting the most listeners. In the hundreds of thousands to millions of downloads per month.
With a bigger reach in audience comes more opportunity for revenue channels. One such channel is hosting live podcast shows, where the audience gets to sit in on a recording.
Ticket sales for popular shows can be substantial, much like live performing brings in a significant portion of any musician’s income, podcasting seems to be doing the same. It’s a big reason why NPR started their How I Built This Summit last year, which drew 600 attendees, and why even smaller, independent shows like the JTrain Podcast, hosted by comedian Jared Freid, record many of their shows live, selling out venues across the country wherever their listeners may be.
In fact, according to Kerri Hoffman, CEO of PRX, the company behind popular shows like This American Life, sold out live shows is a metric they track closely, because it is a big indicator to the company of the level of engagement a show is having from its audience. Something that advertisers definitely care about.
But there are even bigger revenue opportunities that are recently proving to work for successful podcasts. The President of the iHeartPodcast Network, Conal Byrne, says that derivative content such as television shows, film and books are driving additional revenue to podcast creators like his own, Stuff Media, which was acquired by iHeartMedia in September, 2018 for a reported $55 Million.
Shows like Lore, 2 Dope Queens, and Serial have struck deals worth millions with networks like Amazon Prime and HBO in recent years, and we’re likely to see many more popular podcasts turned into tv shows and movies in the years to come.
Hitting The Mainstream
With all the excitement around podcasting, the medium has a ways to go before it reaches the audience that radio currently enjoys. While about 26% of Americans listen to podcasts monthly, radio still reaches about 92% of Americans every week. But the recent growth is promising. And with the proliferation of voice devices, and natively integrated podcast applications in cars, we’re sure to see audience numbers grow exponentially from here.
At iHeartMedia, new podcast shows are now teased across their network of 110 radio stations every Wednesday, reaching even more people who have yet to download a podcast app on their phone. On the flip side, programs that traditionally relied on radio for distribution, such as NPR, who was also an early podcasting entrant, is now pulling in listeners in the 25-34 age range who traditionally have not been a big audience segment for them.
As the lines between old and new distribution channels for audio begin to blur, and as the podcasting industry begins to mature and overtake radio in the years to come, we will inevitably see more blockbuster podcast content deals happen as networks and producers vie for our attention. One thing we hope is that the barriers to entry for new creators remain low, so that we can continue to enjoy innovative new show formats to consume.
But regardless of where the industry goes in 2019, listeners like you still have a voice. So make sure to vote with your ears, and go subscribe to your favorite shows now, wherever you listen to podcasts today.
