Coming Contextualized Podcast Listening

By Rob Greenlee

Many have said, over the past 10 years that podcasts were just too difficult to find and know how to listen to them.  I would agree that was the past and that past perceptions like this create a delay in the realization that something new is about to be born that will revolutionize the podcasting or on-demand spoken-word audio market we know today.

“I believe that 2015 and 2016, will bring the most profound improvements to on-demand spoken-word podcast market since iTunes added a podcasts area.”

This next year or so will show us a synergy of some very important areas that in combination will be explosive to the podcasts market.

The opportunity areas are smartphone personal agent technology that we have been seeing slowly develop like Siri, Cortana and Google’s agent technology this is currently nameless.  The other areas of important improvement are around in-car dash listening and most importantly the focus on content and the businesses that support at a very high level.

This smart agent technology is deriving out of what is called “machine learning” and is a growing focus in the tech sector that is driving the convergence of inputs from mobile device sensors, location beacons, artificial intelligence and big database stores of personal data. These technology evolutions are driving a more contextualized experience on all of our mobile devices.

You are asking at this point, “What is contextualized mobile experiences and how is this going to impact my podcast listening?” 

The answer is fairly simple and when you hear it, that light bulb in your brain will go on and you will say that makes sense.

The answer is that our mobile devices will become more and more aware of what you are doing, where you are and what you like to do and when you like to do it.  Then based on all the sensor and personal data these smart agents have access to about you, then they will start to predict and suggest what, when and how we will live our daily lives.

In many ways we are already living this contextual world, but the difference is the predictive nature of the next generation of 8 processor cores and then 12 and 16 core mobile devices that are coming in the next few years.  I believe that we will see cloud connected devices with huge processor power that are connected to huge server farms being built by Google, Apple, Microsoft and Facebook.  These server farms and future devices will know you like you have never known yourself.

To give a little perspective and real world example of this trend, the recent Apple purchase of mobile app podcast playback platform called Swell had as much to do with machine learning and context as podcasting.  Swell was laser focused on obtaining data signals from app usage, social media and device location to help personalize the audio playback experience.

This contextual future in combination with the growing embrace of the broadcast radio side and the increasing quality and variety of content is setting the stage for a huge growth pattern for podcasting and on-demand audio.  We have the pending battle between generations of spoken-word audio listeners who mostly span local and national content. We are seeing a significant trend around in-car streaming audio versus broadcast radio listening.

“I believe that car in-dash streaming audio playback is going to be a major inflection point for podcasts with the coming deployment of Apple’s “CarPlay” with 3G and 4G internet connected app experience that will be driven by mobile device and direct to the car wireless data plans.”

Young people today don’t listen to much radio and mostly digital music platforms, but older people tend to listen to more spoken-word radio and on-demand podcasts. The good thing about the younger generation is that they become older and that will help drive the future in-car streaming audio platforms that will increasingly be connected with our devices smart contextual driven user agents like Siri and Cortana.

This means that your mobile device, car, home and office will be places that your device knows the spoken-word podcast content you like and delivers content listening and advertising suggestions that are relevant to your calendar, location, activity and most of all interests that have all been obtained though the world around you and the personal data you have put into your cloud enabled devices. This may or may not be a good development, but it will make listening to spoken-word podcast content much easier then today.

Originally distributed in Podertainment Magazine.

Podcast Content vs. Distribution: Is the battle just beginning?

By Rob Greenlee

Content and distribution have had a long-running relationship with each other over many decades, going back to the earliest days of print, TV and radio. Yet, this relationship has been growing more and more unstable since the beginning of the digital age. Think Napster, as the internet has taken over more and more of the distribution of content that can go directly from the creator to its audience.

The growth of the internet has meant that in general traditional aggregator distribution middlemen are, more and more, getting cut out of making shares of revenue from content that can cover costs associated with creating and maintaining distributing pathways for getting content to audiences. This audience pathway has often been expensive to create and operate. Think newspapers, radio, and television in an analog content delivery world.

Fast forward to 2004, the iPod was dominating portable audio and thus sparked the birth of a little on-demand radio medium called Podcasting that we thought of as the utopia of unbridled and open content creation and distribution. We all thought that this symbiotic relationship between podcasting content and distribution at places like iTunes would continue forever. Well, folks, those days may be coming to an end in the new age of podcast content monetization we are seeing develop today.

I believe that we are seeing the beginnings of a battle starting to happen between creators of high quality podcast content and on-demand audio distribution platforms.

This is happening now because the content in this relatively new medium is finally able to be monetized effectively.

Yes, it is a new day for podcasting and it only took 10 years of struggle for the medium to be taken seriously by the radio and advertising buying markets to get here. The old saying comes to mind: be careful what you wish for as many in the podcasting industry have wanted effective monetization of the medium for a long time now. The battle between content and distribution has arrived and so have a few other things that we all should have known were coming.

It is well known that many more podcasts these days are making serious money.

With that come new people and platforms that want to jump in on the opportunity. The other trend that is happening is increased attention and larger audiences are coming to the podcast medium. It has long been the dream of many early entrepreneurs to seek angel and venture capital to build on-demand radio / podcasting platforms on the promise of obtaining large user bases that would potentially lead to revenue in the future.

The brewing battle is centered on who has the contractual rights to sell advertising in the podcasting content and who has the rights to distribute the said podcast content.

The dirty little secret in the podcasting space is that some of the newer open aggregator distribution platforms are running advertising in front of podcasting content without always sharing revenue and or giving play count credit to the true owners of the podcast content.

The fallout from this battle is going to shape the future of on-demand audio and podcasting. The key issue is that podcast aggregator platforms that do not own or represent the advertising sales and license podcast content will have a difficult time surviving in this new on-demand radio/audio market. It is hard to see how these open content aggregator distribution platforms will make enough revenue to justify the continued investment in software infrastructure, let alone bring a strong return to investors.

These platforms will struggle to support operations without some source of revenue besides venture capital and ad revenue coming from running ads against content that they have not paid for rights or share advertising revenue. They will face legal challenges from the true rights holders that will put them in legal and financial troubles. We will see new aggregator app platforms struggle to find a foothold as the best content will not be available on those platforms.

I believe that serious content creators and content distribution platforms need to operate in ways that are more cooperative with each other.

The only alternative is that content owners will take more control and own the distribution and audience relationships.

It is very possible that open aggregator platforms may be in the process of fading from the on-demand and podcasting market.

Podcast content networks will create distribution platforms for reaching directly to audiences. In the future, larger content networks will be the ones to do the needed content distribution rights and revenue sharing deals.

Originally distributed in Podertainment Magazine and watch videos about the eMagazine here.

How On-Demand Audio will Make Money in the Future

Since the early days of podcasting, many have wished for and aspired to make a good living from producing and distributing podcasts. Many a podcaster has failed to achieve that goal and has hung up the towel on trying to earn a good living or build a small company around the fun and exciting podcasting space. I have seen many people and companies come and go since before podcasting really even started. Expectations for the scale and advertiser support just did not match reality. Podcasting certainly did not “Kill the Radio Star” like Wired Magazine proclaimed on its cover back in 2005.

The podcasting/on-demand audio industry will make hundreds of millions or even one day billions in revenue once advertisers and distribution platforms have a consistent third-party standard for understanding and reporting download’s, play duration, specific playback devices and geo-targeting abilities to do what is called in radio “copy splitting”. These are the elements that drove broadcast radio to the 16 billion dollar industry it still is today. This usage and audience measurement metric data needs to be verified by detailed user studies by trusted research firms like Arbitron and Nielsen Research, as the large media buying agencies still operate on those principles.

The specific parts of the industry positioned to generate the most revenue and profit the most are generally the same as now: content providers and networks providing high quality content with top talent with a strong existing audience following offline and online. We are also seeing a few top publishing, hosting and metrics tools providers that are trusted by content providers and advertisers getting solid and growing revenue streams. I think that those that can create a content network with talented hosts, who can build authentic audience trust, deep “friendship level” engagement and entertain, will make hundreds of millions of dollars from major Fortune 500 brand advertisers and sponsors. Many major brand advertisers are beginning to give on-demand audio podcasting a shot, as a radio advertising replacement strategy.

Monetization will happen from a variety of revenue streams, as outlined above, but mostly it will be the larger major content provider networks and shows will make the most revenue. The aggregator distribution (iTunes, Stitcher and others) will continue to struggle, but will grow revenue from getting into partnerships with content providers at a deeper level to get connected to advertiser revenue. The other ways these aggregator platforms can grow revenue is via offering in-app purchases, audience donation/fan loyalty shares and selling merchandise and/or offering live event ticket transactions. This part is the real weakness in the industry today and will be the key to creating the most user-friendly software experiences on mobile devices and in-cars. This is going to be the last place that is able to monetize in a way that will be healthy and really propel the industry to higher levels of revenue in the future.

I believe that Apple has been the company to profit most from Podcasting. Apple did not invent podcasting, but did make it what it is today with millions of daily users accessing podcasts through very expensive and highly profitable devices. Apple can make or break this industry right now and for the foreseeable future. It is rumored that Apple Podcasting could be moving to Android and, with a move like that; it could give the podcasting industry a big audience boost. It is true that Google has not put any effort into the podcasting market, because Google considers YouTube their podcast play. Android is clearly the biggest potential growth opportunity. It has lagged without a first-party podcast experience. Although Stitcher and others have made some in-roads into Android, it has remained a missed opportunity.

I believe that in the next 12 months, the on-demand and podcasting market will be quite different than today. The shift around consumption of audio content to mobile devices and beyond the desktop computer is a significant development. The entry of players that have big budgets will create a big impact and other dominant streaming internet audio players will jump into the on-demand talk audio market soon to drive the audience and revenue even higher.

We all need to start getting used to the phrases “on-demand audio” and “on-demand talk”, and the term “Podcasts” as important industry terms, as I am hearing them more and more. The term “Podcast” and “Podcasting” are not going away and never will, but these other terms will help this industry become the financial success we all want it to become.

2014 and Beyond for Podcasting

Since the earliest days of podcasting in 2004, the key points of change over the years have been around monetization, content quality, devices used for listening or watching and software distribution platforms.

Podcasting has seen a heavy amount of churn on the content and distribution platform sides for many years.  Tools platforms have enabled content providers and apps to be more usable and stable in recent years.  Most of the current companies have proven to be steadily improving and economically viable.

Although many of the podcasting tools providers have been successful, many of the early providers struggled to stay viable.  Companies that endured and found acceptance among content providers were those that worked hard to adapt their tools and platforms into what content providers needed. The common thread is they all had and continue to have a single point of contact that was reachable and respectful of podcaster community.

The podcast content community is very sensitive to platforms that are looking to take advantage of the community. In the past, podcasters have been burned by many early companies.  For this reason, it is very important for new companies coming into the podcasting space to build trust with the podcast content community and engage with them as deeply as one can to learn the pitfalls to avoid and opportunities to move towards.

Key Trends and Challenges:

The podcasting market growth continues to center on mobile device adoption that includes smartphones, phablets and tablets.  The market is dominated by audio content, with the vast majority of revenue for all major players in the market coming from host-read sponsor and inserted advertising in downloaded or progressively download play streams.  Pre-roll advertising in podcast content can be effective, if kept in the 30 to 60 second range or less.  Much longer host read sponsor messages can also have a significant value as well.

CPM revenue for podcasts and on-demand audio can vary wildly and range from just a few dollars to as high as forty to fifty dollars per thousand of reported downloads.  The reason for this wide range is because the advertising market for podcasting and on-demand audio shows is immature and advertising buyers are mainly funding direct response campaigns today. The ROI results of properly matched advertisers and shows can be very high.

The podcasting space is still in the process of establishing audience reporting standards around the exact method for how to count downloads; play duration and advertising message impressions are tracked and reported.   The other big issue is around having a credible third-party advertising agency recognize an audience research entity to verify reported metrics.

We are seeing advertisers tending to work with podcast brands and networks that have a strong awareness and reputation for delivering compelling content and advertiser ROI results.

Radio listeners are steadily increasing ownership of smartphones and tablets, thus will have the mobile data connection and device to get access to podcast and on-demand spoken-word audio content.  The podcast hosting platforms are showing strong growth in podcast usage across smartphones, but tablets are growing in usage as well.  Most of these devices have access to mobile wireless and Wi-Fi, thus making many tablets mobile devices as well.  All tablets and smartphones have integrated Bluetooth radios that can connect to car head units.

Over the next few years, this same tablet/smartphone technology and mobile wireless data connections are going to be integrated into the dashboards of higher end new cars that are purchased by the same age group and education level as current and future on-demand audio/ podcast users.  The other major impact on the podcast market is wearable mobile devices.  The next generation of mobile device processors will be able to predict our needs and desires, based on sensed usage and activities.

Mobile devices and software are headed towards more hands-free usage and thus access to wireless on-demand radio-like experiences via the wireless carrier data networks.  Every mobile device will be a radio replacement device that is with the user all day long versus just when in the car.  This has the potential to grow the consumption of audio and video content.  Smartphones are evolving to become PC replacements and, with phones getting larger screens, they also become tablet replacements or phablet devices.  These larger screen smartphones and phablets will help grow media consumption for both audio and video.

The other major enhancement to the on-demand radio and podcast market will be more content coming from the broadcast radio side.  I believe that more local radio stations will begin to utilize digital on-demand distribution of online only and some broadcasted content targeted at local, regional, national and global markets.  The radio stations and broadcast radio groups will need to do a much better job of selling a combination of local, regional, national and global sponsorship packages to advertisers or better utilize savvy digitally focused advertising agencies that truly understand the on-demand radio and podcast advertising market.

The advertising messages in podcasts will need to be uniquely targeted to the specific podcast listener.  Actual Ad placements will need to be heavy on the mid-roll side, but well integrated pre-rolls, mid-rolls and post-rolls can be 30 or 60 second spots or shorter.  Like always host story telling about his or her experiences with the product or service is always good to have after or before the spots.

The other opportunity is that show donations will require a different approach than has been done in the past. Individual show donations will need to be a very easy and convenient donation process that would be visible with every episode of an on-demand radio/podcast series.

Looking to the future, we will see more premium paid ad-free on-demand radio and podcast content enabled via in-app purchase wrapped by free content in a freemium model.  Podcasts or on-demand radio shows are a very personal medium and success is often measured on engagement that often leads to revenue coming from live events and selling related products like books, t-shirts, tickets, wine, hard alcohol and consulting services.

All mobile app distribution and ad sales platforms for podcasts will need to focus on generating revenue from offering services that meet the market needs to help generate revenue for the content providers.  The opportunity for technology tools, client app development, ad sales and metrics providers is to tap into the $17 billion radio advertising market to fuel the on-demand radio and podcasting market.

This all means that revenue in the future of on-demand radio and podcasts will come from a variety of cash flow streams and each show will need to be able to custom tailor their show or network platform to a combination of all or some of the outlined revenue strategies.