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No, the podcast ‘gold rush’ isn’t over. Podcasting’s golden age is just beginning

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It’s a well-trodden hype cycle in the media industry. Some new technology comes along and starts to take off, publishers rush to invest, it falls dramatically short of expectations, and we all back off with renewed scepticism and a bruised bank balance.

Some have been saying for a while that podcasting is heading down this track. The concern is justified; after all, the fallout of the ‘pivot to video’ in 2018 could be seen coming a mile off.

The latest naysayer is Digiday’s Max Willens, who published a piece late last week on ‘Why the podcast gold rush is slowing down for some publishers’. It was shared widely, and with many saying that this is the inevitable crash from an overhyped format.

“Now more than ever, success in podcasting requires sustained editorial, marketing and promotion support, all for an increasingly uncertain payoff,” Willens wrote.

But the picture Willens paints of podcasting is not an entirely fair one. 

I will admit I’m biased on the subject. I co-host Media Voices, a weekly podcast on the media and publishing industry, and with that, we’ve also set up the first ever Publisher Podcast Awards, celebrating the work publishing and media companies are doing in this space.

But that work also means we keep frequently up to date with the podcasting industry, and particularly how publishers are developing in the space. From the evidence I’ve seen, podcasting’s golden age is just beginning.

The bottom of the growth curve

The difficulty in building audiences is frequently highlighted as a challenge for bringing in sustainable revenue for publishers, with advertiser expectations often far higher than is realistic. But this is an issue with discoverability, not that we’ve hit some ceiling with podcast and audience saturation.

Discoverability has been highlighted numerous times in studies as being a barrier to podcast adoption and discovery. Finding new shows is challenging, and only the blockbuster hits seem to manage to scrape into Apple’s charts.

According to Edison research, of the 68% of people who haven’t listened to a podcast in the past month, 65% of them said that the issue was there were so many podcasts they didn’t know where to start.

It’s an issue companies have put a lot of effort towards solving over the past 12 months, with Spotify at the forefront launching tools like ‘Your Daily Podcast’ and ‘Morning Drive,’ as well as redesigning to promote discovery. Many of these initiatives are still in the early stages, but with huge budgets behind them, these companies are invested in making it work for users.

Discoverability is not going to be solved overnight, but the audience trajectory can only grow from here. 37% of people in the UK now listen to podcasts on a monthly basis, and that rises to a whopping 51% of Americans. It’s also a format flying well with traditionally hard-to-reach younger people, with those aged 16-34 the most engaged with podcasting, according to DMA research.

The statistics about advertising are only just coming to fruition, and are helping convince brands that although numbers may be lower than the fly-by pageviews we’ve come to expect, engagement is far, far higher.

But even with the challenge of listener numbers, publishers have a huge advantage. “Yes there are lots of podcasts, but we’re a million miles away from anything like universal listenership,” explains Media Voices Podcast co-host Peter Houston. “Professional publishers will always be able to compete against enthusiastic amateurs by virtue of their established reach.”

With ready-made audiences to springboard from, and longstanding relationships with advertisers, publishers shouldn’t be too quick to discount the advantages they have over the vast majority of the 850,000 podcasts already out there.

The publisher perspective

Digiday’s Willens lists a number of publishers who have backed off podcasts to make his point; from Politico stopping three of its seven US podcasts to Business Insider’s struggle to secure sponsorship of episodes.

It’s always easy to find examples of publishers who have overstretched in their investment and had to cut back. But there are so many more examples of organisations taking a more cautious approach; getting the right resources in place and scaling as demand grows, that just don’t make headlines.

Tech and media analyst Simon Owens set out the problem succinctly in his tech and media newsletter last Friday. He argues that although there are benefits to publishers going into podcasting, that doesn’t mean bubbles can’t form when investment far outpaces industry growth.

“Think of the dot com bubble as a good example,” he writes. “The revenue potential for the internet was there – in fact, some of the most profitable and valuable companies in the world today are internet-based – but internet adoption in the late 90s was still low and there was no justification for the tens of billions of dollars of capital being dumped on businesses that had no near term path to profitability.”

Owens has previously written about why every publisher should have a podcast strategy, and is an advocate of publishers exploring the format, but carefully.

“I’ve been surprised by how many publishers dive head first into creating super expensive narrative podcasts – the kind that require six months to produce a single season of 10 or so episodes,” he explains. “The production cost for these run into the six figures…and guess what? Most won’t pull in a million downloads.”

“Some of the most popular podcasts in existence are conversational shows with relatively low production costs,” he concludes. “As much as you may want to create the next RadioLab or Reply All, I’d advise most publishers to walk before they run.”

Houston points out that some publishers may also be stumbling by seeing podcasting as a singular answer to revenue woes. “The gold rush analogy is so flawed,” he argues. “Podcasts should be another plank in publisher’s portfolios, not another ‘get rich quick’ pivot.”

Testing and learning

These early pullbacks illustrated by Willens actually demonstrate an evolution in approaches to audio. “The pivot to video would have been a lot less messy if publishers had adopted this kind of ‘test and learn’ approach at the start,” Houston said.

That’s not to say all publishers should expect to match VICE’s lofty ambitions to pull in $20 million from podcasting this year, or reach The New York Times’ 2 million listeners for The Daily. Podcasts should be approached carefully, with a clear idea of how it will benefit the brand, and what success looks like – even if that isn’t necessarily revenue.

Like the headline failures, there are lessons to be learned from the smashing successes. Publishers need to formulate a podcasting strategy that works for them and their brands, to take advantage of the upcoming golden age.

Useful reads from WNIP on podcasts and publishing: