Podcasting Grows Up

Photo credit: @jasonroswell https://unsplash.com/photos/ASKeuOZqhYU

Photo credit: @jasonroswell https://unsplash.com/photos/ASKeuOZqhYU

There’s no shortage of press coverage and glowing reviews these days, listing the 50, 100, even the 200 most essential podcasts. They aren’t wrong — fifteen years since the advent of the iPod, we’re now in the midst of A Golden Age of Podcasting. (There aren’t enough hours in the day for all these Golden Ages, btw.) Season 3 of “Serial” recently premiered to three million downloads in its first day of release, and “The Daily” from the New York Times continues its juggernaut ascent with over 200M downloads in just one year. Add to that, the influx of bold-faced-name-talent, plus several high-profile film and TV adaptations, and you’d think the industry is bathing in champagne and truffle-dusting everything in sight. But while there is a distinct Gold Rush moment afoot, there’s also a lot of consolidation, right-sizing, and uncertainty about the future of a more mature podcasting business.

Here’s what we know today (and you can refer to some of the snazzy infographics below for further stats):

  • The podcast audience continues to grow, and at a healthy clip — although the 73M total audience and 314M in annual revenue is still dwarfed by radio with 271M listeners and 17.6B revenue.

  • The demographic makeup of listeners is more upscale and better educated than other media. They’re also loyal, and they show high completion rates, even for 1 hour-plus shows.

  • Advertiser recall, intent, and conversion are all notably stronger than any other medium, which is largely attributed to the authenticity of host-read ads and the fact that listeners tend not to skip.

  • At the same time, a universal audience measurement remains elusive, despite efforts from NPR, Triton, Nielsen. (Downloads, not actual listens or impressions, are the dominant metric today.)

  • Dynamic ad insertion exists, but it’s still primitive; robust geo- and demo-targeting tools aren’t in place yet.

As a result, you have a relatively small cohort of sponsors (if you listen to podcasts, you know them — Squarespace, Zip Recruiter, MailChimp, Talkspace, Stamps.com, the Cash app, Casper — mostly direct response advertisers) reaping steady and quantifiable benefit from their media spends. Measurement issues aren’t a problem for those folks since their ads are accompanied by offer codes which listeners redeem online; sponsors are doing all the critical tracking and ROI on their end. Podcast distributors are decidedly mixed on touting these success stories. DR sponsors tend to buy a show ad nauseam, and once they’ve converted and/or exhausted that audience, they move on to another means of gaining new customers.

So to date, major advertisers have shied away from splashy brand campaigns and big spends. Some movie studios and TV networks, a few insurance companies, and a couple fast-food chains have dipped a toe in here and there. Whereas making a podcast might be cool, advertising on it is something of a backwater.

Scale and measurement remain the two biggest issues — for now. Ultimately, there is too much worthy, engaging, and timely content being released every day. (More than half a million podcasts exist in the ether, but only about a fifth of them have been active in the last three months.) What I know, based on what I’ve witnessed in media, is that technology races to bridge any gap between audience and content and revenue. It’s happened over and over, in every sector of the entertainment industry since the advent of the public internet.

Scale is a temporary obstacle; the growth of voice-input devices in the home — and more critically, in the car — will greatly expand on-demand listenership over the next several years, as will AI technology from Google and start-ups like Audioburst. The ability to search (pull) and recommend (push) comprehensively indexed content will ease the friction around audio discovery, especially as podcasts proliferate. The notion of a “podcast,” and an app for listening to it, will recede in the next few years as audio becomes more pervasive (much in the same way that “blog content” coalesced with online print media over the last decade), and that will also remove many of the current barriers to consumption. Today, only about 25% of the US audience listens to podcasts with any regularity. That other 75% is a big slice of pie that won’t sit on the table untouched for long.

Measurement is a trickier knot to untangle. Just this past week, controversy erupted over outside manipulation of the Apple iTunes Podcast Chart, reinforcing the industry’s reliance on a flawed and non-neutral party for measurement data. Revenue is compelling motivator, though, and between just the top two players, NPR and IHeartRadio (which recently acquired HowStuffWorks for $55M), there are an estimated 27M+ monthly podcast listeners to tally — that’s over 1/3 of the total audience right there. Granted, it will only get more complicated as listening habits fragment across platforms and podcasts start seeping out of the walled garden apps they live in today. Plus, the days of one, agreed-upon ratings referee are probably behind us. But logically, I have to believe that a digitally-distributed and consumed piece of media can be reliably measured in aggregate, and we’ll eventually figure that out.

Some podcast veterans have warned that if/when the medium scales and unifies, a lot of the magic will disappear. The smaller stories, the independent producers, the voices in the margins, the niche subjects — they won’t get access to the big audio revenue pie, and we’ll look back at where we are today in much the same way we wax nostalgic for a free-wheeling ‘90s internet, before it was consolidated in the iron grip of The Frightful Five. That fear is not unfounded, and I have no doubt that the blockbuster mindset which has overtaken most of the entertainment business will subsume spoken-word audio as well. Given the relatively low cost of production, my hope is that the whispering intimacy of well-crafted audio narratives, no matter how obscure or narrow, will continue to flourish.

Everyone agrees that the industry is evolving — and it’s happening quickly. Google, Spotify, Amazon/Alexa, and Apple are all making moves to expand out to new audiences with new technology, while radio incumbents work to adapt and upstart content brands try to gain a foothold. My feeling — as the stakes get higher and content continually evolves toward an on-demand universe — is that you have to know your brand, articulate it clearly and consistently, and through that conversation, forge a firm bond with your fans. That connection, that shared identity, is partly what makes podcasting a such a unique form unto itself.

Also, make nice with some machine learning algorithms; as the content universe continues its inexorable expansion, they’re the ones that will go out and find us most the stuff we’ll be listening to, watching, reading, and experiencing.