There’s not a lot of good news to highlight in the media industry right now. Within just the last week, we’ve seen major layoffs announced at BuzzFeed, Verizon Media Group, and Gannett. With VC money drying up and a looming global recession on the horizon, many within the journalism profession are bracing for the worst.
But if there’s been one bright spot within the publishing space recently, it’s been podcasts. There have been a number of high-profile successes for the medium. The Daily, a podcast run by The New York Times, is reportedly booking “eight figures” in annual revenue, has secured a number of radio syndication deals, and is even being spun off into a TV series.
The Ringer, according to The Wall Street Journal, generated $15 million in 2018 from podcasts, which were its largest revenue driver. And The Economist claimed that its podcast revenue increased by 50 percent between 2017 and 2018. “I am not saying that people should do podcasts instead of videos,” Tom Standage, head of digital strategy and deputy editor at The Economist, told Digiday. “I just think there is a viable ad model for podcasts, and I’m not convinced there is one for ad-based videos.”
You’ve probably noticed lately that it seems like every publisher is launching a podcast, with several national news organizations rolling out daily podcasts. If you’re one of those that have yet to debut an audio product, you might be wondering: is it time to “pivot to podcasts”?
Before you start shopping for microphones, it’s important to understand a few stats about the podcast market. First, the listening audience size, at least compared to other mediums, is relatively small. Research from Edison found that only about one in four — 26 percent — of American adults listen to at least one podcast a month. On the one hand, that’s still 68 million people, a sizable number, but that still means that 74 percent of your publication’s current audience won’t easily convert into listeners.
Revenue for the industry is also low. Currently, podcasting only generates about $300 million in the U.S. and $650 million worldwide. Say what you will about the ill-fated “pivot to video,” but at least the digital video industry produces nearly $30 billion in ad revenue. For publishers, this means that many of the brands they work with will have little to no experience buying ads on podcasts, and convincing them it’s a worthwhile buy will be an uphill battle. To be fair, the podcast ad market is quickly growing; it’s consistently doubled year-over-year, and is expected to reach $1.6 billion by 2022.
The infamous “pivot to video” is roundly mocked today, but the potential revenue was always there for publishers. The problem was that many digital media companies underestimated how difficult it is to create video that users actually want to watch. They were tricked into thinking they knew what users wanted by Facebook’s analytics dashboard, which not only inflated view counts by measuring drive-by viewers, but also was overreporting how many people actually saw each video. Once Facebook fixed its analytics tools and took its foot off the gas for video, publishers faced the harsh realization that they actually had no idea how to build a loyal viewership.
Publishers face the same risk with podcasts. Building a sustained audience takes time and devotion, and those that dive in expecting an instant hit are bound to be disappointed. Though viral hits do exist in the podcast space, they’re fairly rare, and many shows take years to build up a large enough listenership to produce meaningful revenue.
That all being said, I do think that most publishers should experiment with podcasting. Unlike video, which requires expensive investments in equipment and staff, the barrier for entry is much lower for podcasts. Even a low-production show that involves two journalists discussing their beat can be entertaining, and some of the most popular podcasts on the iTunes charts fit this category.
While the revenue pie is still relatively small, it’s quickly growing. And, as I documented in my column about why so many publishers are launching daily podcasts, there are other benefits to producing a podcast. For one, it allows for passive consumption at times when your audience wouldn’t otherwise be able to engage with your content — when they’re commuting to work or completing household chores, for example. Second, podcasting, because it’s such an intimate medium, helps publishers engender audience loyalty. The Financial Times, for instance, leverages its free podcasts to help convert listeners into paying subscribers for its web content.
Podcasting probably won’t save your company, but the medium can help augment your offerings. And by getting in now, you’ll be launching your show in what most experts agree is still the early growth curve for the industry. Podcasts aren’t the silver bullet that will save digital media, but by now I hope most publishers have realized that no such silver bullet exists.