The keys to starting a podcast business in Latin America (Part 2)
One of the challenges we have as podcast producers is being able to sustain a project over time, therefore we have to figure out how to monetize it. Through four success stories in Mexico and Argentina, we’ll share three key aspects of podcast funding.
By Erick Yañez Navarro
In Part 2 of this article (you can read Part 1 in the previous newsletter), we review three more keys related to the possible financing methods for starting a podcasting project in Latin America. These keys are a qualitative evaluation in the voice of our industry leaders. To understand what their business models have in common, I interviewed the leaders of four major podcast networks: Dany Saadia of Dixo (Mexico), Carlos Puig of Así Como Suena (Mexico), Andrés Vargas “Ruzo” of Puentes (Mexico), and Luciano Banchero of Posta (Argentina).
4. LATIN AMERICA WANTS TO CONSUME PODCASTS… WE JUST HAVE TO MAKE THEM
In 2013, Mexico City became the number one Latin American market for Spotify. It has grown since then to transform itself into the most important market for the company on a global scale, according to the company’s newsroom. In a city full of bottlenecks where people spend almost a third of their day stuck in traffic, we’re just now getting a glimpse of the enormous growth potential of the medium of sound in Latin America. However, there is no study that compiles in detail the consumption habits of podcast listeners in Mexico.
Carlos Puig, of Así Como Suena, says: “What we need are listeners. Our primary task is to build an audience. All over Mexico City, people are listening to things — the challenge is to show them this new product. We have to make it easier to obtain data, or partner with people who can finance a study. The production quality is there: those who arrive, stay. It’s a problem of time, effort and advertising investment to tell people: ‘Hey, here we are!’”
Although projects like Posta have been working for four years, it’s not until now that they’re beginning to get some attention, according to what Banchero tells me. “First we capture the audience; this way, brands approach us and, finally, other big or small media outlets start talking about us. The fact that more media notice what we’re doing leads to others beginning to produce or partner with us. That, to me, is a healthy ecosystem. We don’t want to monopolize anything. The only way this can become an industry is to create competition, and I think if there’s something that characterizes us as a community, it’s that there are no podcast networks that are enemies of another.”
So, why isn’t the mainstream media interested in investing in podcasts? Why don’t magazines or newspapers with national circulation have a podcast production team? Carlos Puig, of Así Como Suena, gives his opinion: “It requires a certain level of specialization. Any media outlet would have to build a team that understands how things are done, like what’s happening in Spain, the United States, or France. Maybe it’s a question of resources, but I hope they do it soon because that’s going to create an audience. It’s a medium-term bet, and the first step is to form audiences.”
Andrés Vargas “Ruzo” imagines that the podcast industry will be somewhere between the publishing and film industries in Mexico in five years: “It’s still a hobby or a topic of conversation, but in five years it could be the best promotional and content tool for any media outlet, be it in print or video. There will be a lot of podcasts with high production value, with creative people continuously innovating.”
5. THE GRASS ISN’T ALWAYS GREENER ON THE OTHER SIDE
Or, in other words, you have to take with a grain of salt the consumption and investment data for podcasting in the United States and other countries. It’s always exciting to see what happens in foreign industries to replicate trends, but many of them don’t work because the markets are so different. According to Podcast Consumer 2018, conducted by Edison Research, 2018 ended with 48 million Americans listening to one podcast a week. And the most recent PwC report says $747 million was invested in podcast advertising in the United States, while Mexico finished the year with only $23 million — an amount 30 times smaller.
Without a doubt, while the market is much bigger in the United States, the demand could still be greater in Mexico and Latin America. In the opinion of Dany Saadia, there’s also a lot to learn from the content being produced by the giants of the American market: Wondery, Radiotopia, and Gimlet. For example, Así Como Suena has invested in contracts with documentarians who can teach storytelling techniques in order to distance themselves from conventional newsy formats.
Still, although production practices can translate to Latin America, brands need certainty of growth, which will be very hard to attain while the industry is still emerging. And while the stats from other countries are an invitation to place bets on the medium, a critical eye is necessary to reinvent them at home.
6. A CALL FOR PROFESSIONALIZATION
The livelihood of any business is its employees, and a successful business model is that which puts its collaborators first. Banchero says it best, alleging that he has “this crazy idea” that people should be paid for their work: “Making a podcast at Posta takes work. It’s necessary to formalize those aspects, even though we’ve started in an informal way. The fact that there are sponsors allows producers and scriptwriters to get paid. We want to guarantee that all of our collaborators feel like employees.”
2019 will be the first year that Posta will be profitable, and Luciano Banchero sounds optimistic: “For me and Diego, my partner, this is our job 24/7. I don’t think the salary defines a job; it has to do with a project and what you do to help it grow.”
Each of the four platforms whose leaders I interviewed is looking for monetary benefits for their creatives, with some exceptions according to the type of client or the partnership they’ve made. For “Ruzo,” this is especially important because he worked at the Instituto Mexicano de la Radio before starting Puentes. “I always felt like the hosts got the fewest benefits in public radio. One of the most difficult things was finding members who understood that the generator of the content must be the first one to get something, putting the company’s profit last. Today, thanks to sponsors, all of our collaborators are paid for their work.”
I also asked him how he’s able to balance his work as director of Puentes with his job as a producer and host: “For a long time I fought with the bland, administrative tasks of the whole thing. Until a year ago, I threw a tantrum every time I had to look at projections and invoices. But you’ll never find anyone who loves your project as much as you do, and sometimes, it’s your turn to do it. Especially now, we have to pay a lot of attention to the numbers. I listen to a lot of podcasts while reviewing pay tables or organizing the money. I feel lucky to do what I do.”
Of course, funding a single project is not the same as financing a company, but there are multiple alternatives for both purposes. For podcasters just starting out, it’s worth asking yourself if partnering with a podcast network offers more opportunities for growth, or if you can diversify your streams of income. Or you could try to offer consulting services, serving as producers or creating robust content — these are some paths toward starting to build a sustainable industry.
As long as these business models are replicated to improve the appeal of podcasts in Spanish, or small projects find a model appropriate for their scale, it is possible to make a living from podcast production. I’m convinced that now is the best time to give it a shot.
This text was translated and edited from it’s original publication in Spanish in the Podcaster@s bi-weekly newsletter, where we share the top news and diverse perspectives from fans and producers of podcasts in Spanish. Sign up for it here.
José Erick Yáñez Navarro // Podcaster@s Collaborator. Licensed in Communication and Digital Media. He has developed a variety of audiovisual and multimedia projects, including music videos, short films, documentaries, corporate videos, and animation for digital cinematography. He has become a host and producer of audio projects in digital media. He is a founding member, managing producer and scriptwriter for Psicofonías. @pateerick // psicofonias.com.mx