Once a breeding ground for experimentation, podcasting is becoming more professional and is benefiting from new distribution and monetization models. In 2019, extraordinary investments made the headlines. We also witnessed a proliferation of new platforms. How can creators benefit from this boom? Let’s take a look.
Since its inception, the podcasting economy has been an attention economy. According to a report by Edison Research, 81 per cent of Canadians who download podcasts listen to all or most of them.
Out of opportunity and necessity both, creators were quick to rely on methods of monetization that relied on their community ― for example by organizing public recordings or events, or by conducting crowdfunding campaigns.
At the same time ― and especially in the United States — the advertising market has been booming and has allowed various creators to monetize this new attention economy.
In that regard, 2019 has been a pivotal year. In the United States, revenues generated by audio advertising jumped 53 percent, whereas 7 per cent more Americans listen to podcasts than in 2018. This market is in full growth, and some even predict that podcast advertising will generate one billion in revenue this year.
While audiences are also growing at home, independent creators who monetize their content through advertising are still rare. On the one hand, audiences are smaller on this side of the border. On the other, existing platforms and technologies favour English-language content, whereas French-language content is slow to develop its own discoverability and monetization tools.
Canadian creators will therefore often prefer to gear their service offering for branded and sponsored content.
The arrival of subscription-based platforms
Major industry shifts took place in 2019. As a result, new revenue opportunities for creators are emerging.
One event stands out: the acquisition of Gimlet Media by Spotify in February 2019. This transaction has enabled Spotify to become the first subscription-based audio platform to offer quality podcasts, and has added one of the world’s best known and most respected production teams to its business.
A bona fide shockwave in the podcasting world, this acquisition injected a dose of confidence into its economy, especially among players who had long ignored it ― investors and advertisers, namely. Since then, Spotify has been quick to integrate podcasting into its core offering in a bid to become the most widely used audio platform in Europe, ahead of Apple Podcasts. In 2020, the platform completed yet another significant purchase by acquiring The Ringer at a US$250 million price tag.
Until now, subscription-based platforms were rather rare because they were difficult to make profitable. One thinks of France’s Boxsons which, launched by Pascale Clark, ceased operating a year and a half after its launch. Otherwise, networks like Radiotopia in the United States are organized around an advertising network. Here, collectives like BaladoQuébec resort to crowdfunding.
Since then, the subscription platform model has become a reality, and many players vie to take advantage of the podcast explosion and claim the Netflix title of audio.
The clash of hybrid platforms
Audio content’s “netflixization” is not without pitfalls for creators.
Because of podcasting’s traditionally open and freely distributed model, many platforms aggregate third-party intellectual property to build a diverse catalogue and attract users. What’s new is that these platforms not only give users access to content, but also use the latter as a premium product to monetize their premium subscriptions.
Case in point: Luminary, which launched last April in the United States. With an unprecedented, venture capital-fuelled US$100 million budget, it quickly became mired in controversy, as creators felt exploited. A tweet published by the platform a month before its launch set the ball rolling implying that with Luminary, “podcasts no longer needed to rely on advertising.”
It’s difficult to know how well the paid podcast platform is doing today. It has since replaced its CEO and raised new investment funds.
In France ― where the podcast market’s annual growth hits 25 per cent ― former Radio France president Mathieu Gallet launched Majelan. With a business model similar to Luminary’s (but a more modest budget of 5 million euros), the platform has been the subject of complaints from creators, and was momentarily taken down from Google’s app store. French podcast creators even published a manifesto to defend their intellectual property, despite that the format is, again, often an open one.
In Canada, the public broadcaster has recently revamped its offering by launching apps that centralize its audio content. CBC Listen and OHdio could have had a premium subscription offer, but instead are positioning themselves as free listening and discoverability destinations for in-house or partner productions.
What’s new for creators?
New investments in the audio industry are throwing the existing podcast economy off-balance. On the one hand, new platforms enable high-profile creators to generate new revenues to rely less on advertising, events, services and crowdfunding. On the other hand, the same platforms may index non-remunerated productions by smaller creators. This may increase their ratings, but it also opens a breach in the content’s intellectual property.
That is where the Netflix model is peculiar, in regards to the audio industry — one built on freely distributed content. Many refer to this phenomenon as the gentrification of the audio industry, and anticipate that the market will shift in favour of platforms, just as it did in the case of the television and music industries.
However, where there are new budgets, there are also new opportunities for creators who, more than ever, have platforms to pitch their projects to.