Reasons for optimism #10: Podcasts and profit
This format taps into the power of the human voice: the ‘Gutenberg Parenthesis’
You’re reading the My News Biz newsletter, which I send every Thursday. My goal is to help digital media entrepreneurs find viable business models.
Why write about “reasons for optimism” when so much is going wrong in our politics, economy, and environment? Optimism gives us confidence we can make things better. As I like to say, it’s another day of opportunity.
We have seen this before. Publishers desperate for new revenue streams pile into the latest fad in content or distribution. Huge investments are made. Big media buy up dazzling startups wielding some promising new technology. Disappointment follows, and in a year or two, everyone looks for the next Big Thing.
Will podcasts follow this trend? I think not, for several economic, technological, and journalistic reasons.
But another reason I don’t think podcasts are the latest fad is the theory of the “Gutenberg Parenthesis”. It proposes that the era of the printed word has been just a 500-year interruption in the more natural form of human communication: speech. Dean Starkman interviewed the Danish scholars who proposed the theory in an article in the Columbia Journalism Review in 2010.
The theory is that digital communication represents a new, networked version of the oral human culture that existed before there were printed media, such as books and newspapers. Digital media return us to the time when the voice was the main way people communicated with each other — in speeches, songs, stories, and the news. Oral communication, like today’s digital media, was fluid, ephemeral, uncontained, and “easily shared, manipulated, and changed by each person.”
This theory helps explain why broadcast journalism, which didn’t require you to be literate, became the dominant mass medium of the 20th century. So, podcasting is not a fad. Like pre-literate communication, it is less authoritative — anyone can engage in mass communication — and it is more individualistic, allowing limitless creativity.
But is podcasting a business?
The short answer is yes, and it’s a rapidly growing business. A study of US podcast advertising done for the Internet Advertising Bureau (IAB) showed revenue of $842 million in 2020, a nearly 20% increase over the previous year. At that rate, podcasting revenue was predicted to exceed $1 billion in 2021.
Part of the reason, the study said, was new advertising technology called “dynamic insertion”. It allows advertisers more flexibility to quickly switch out messages as needed at the point where the listener downloads the podcast. Dynamically inserted ads increased their share of podcast revenue from 48% to 67% year over year.
Enter the giants. There is no clearer sign of podcasting’s business potential than the jockeying among major tech platforms for a piece of the pie. What’s New in Publishing has reported that Apple, Spotify, and Substack have all been upgrading their technology to make it easier for podcasters to acquire paid podcast subscriptions.
Amazon reportedly paid $80 million for Wondery’s Smartless podcast, ranked 26 among the most popular by Edison Research, according to Ashley Carman of Hot Pod. Amazon also bought ad sales and distribution rights for Exactly Right Media’s podcast slate, which includes My Favorite Murder, among the top 10 most popular podcasts.
Cautionary tale: Five things I learned as a pandemic mom and podcast business lady
Impact of the pandemic
The coronavirus changed radio listening habits. Drive-time audiences plummeted everywhere because workers and students were staying home rather than commuting. But news publishers are benefiting because advertisers are choosing news podcasts first over all other types of content (22% market share), according to the IAB study mentioned above.
One example was NPR (National Public Radio), which lost a fourth of its audience for its live shows. However, for the first time, NPR was on track in 2020 to make more money from underwriting on podcasts than on its conventional radio shows.
NPR has four of the top podcasts as measured by weekly listeners, according to Edison Research: Planet Money (12), Fresh Air (13), Up First (14), and Wait Wait . . .Don’t Tell Me (15).
The online news magazine Slate reported that half of its ad revenue is now coming from podcast advertising.
The Reuters Institute for the Study of Journalism in 2020 published an extensive study of daily news podcasting in six countries — the US, UK, France, Denmark, Australia, and Sweden. Among the findings reported by Nic Newman and Nathan Gallo:
Daily news podcasts make up less than 1% of all those produced but account for more than 10% of the overall downloads in the US and 9% in France and Australia.
For publishers like the New York Times (The Daily) and the Guardian (Today in Focus) on-demand audio briefings are attracting large daily audiences, building habit and loyalty for their brands, and driving significant revenue.
Publishers see daily news podcasts as a crucial way to attract younger audiences and to engage them more deeply with their brands.
Podcast listening overall skews young, with under-35s in the UK four times more likely to consume a podcast when compared with over-55s.
Podcasting in Spain
Ismael Nafría’s newsletter, Tendenci@s, included coverage of the impact of podcasts on Spain’s media market.
In January, Spain’s largest commercial radio network, Cadena SER, launched a new design for its website which emphasized “audio first”. The broadcaster now makes its live broadcasts always available on the website’s player.
Audio-on-demand and podcasts, which were previously available separately, are now integrated into Cadena SER’s website. Downloads have increased 38% in the past year to 25 million a month, according to Nafría.
The economic possibilities of podcasting for news publishers seem promising at the moment. Audience and revenue growth have been rapid. The saturation point has not been reached yet.
Some of the technological advances of recent years have accelerated the growth: increased computing power of smartphones, 5G networks, audio production apps, dynamic ad insertion, and new distribution platforms.
Journalism organizations have recognized the opportunities for audience and revenue growth and jumped into the competition. Many have discovered that the podcasting format allows them to tell stories in new ways not replicable in text or video formats. It’s another arrow in their quiver.
In recent years, I have become an insatiable consumer of podcasts. It is like having a portable radio in my smartphone, with the difference that I can listen to whatever I want whenever I am exercising, relaxing on the couch, shopping, cooking, cleaning, or walking the family dog.
I find the Gutenberg Parenthesis theory compelling. I’ve rediscovered the power of the human voice in podcasts and audiobooks. I have found myself sympathetic to politicians I disagree with when I heard them explain their positions in a podcast interview. I find them more credible, more trustworthy. The podcast interview lends itself to a conversation rather than a confrontation interview or debate. It’s far more humane.
So, a year ago, I started producing some podcasts, most of them in the short format of 7 minutes or less. I saw it as another opportunity to share my knowledge with digital media entrepreneurs. Next week I’ll share them.
This newsletter is based on an article on my website, Entrepreneurial Journalism.
Reasons for optimism #1: Andrew Yang
Reasons for optimism #2: Edwy Plenel of Mediapart
Reasons for optimism #3: Journalists collaborating around the world
Reasons for optimism #4: José Luis Orihuela’s ‘Digital Cultures’
Reasons for optimism #5: SembraMedia’s discoveries
Reasons for optimism #6: Jared Diamond and other cautious optimists
Reasons for optimism #7: The movement for trustworthy information
Reasons for optimism #8: Journalists discover marketing (finally)
Reasons for optimism #9: Local news startups