The Podcast Market Solidifies

Nieman Labs recently reported that Audible, the audiobook giant owned by Amazon, is getting into podcast distribution. Shan Wang writes:

We appear to entering a phase of the market where podcasts — traditionally distributed via open RSS channels, available for download to any podcast app — are shifting into verticalized, producer-specific experiences. Think Earwolf’s Howl, Acast’s app, Gimlet’s membership, or now Audible’s Channels. Audible has a big advantage in that battle: It’s starting with a big base of dedicated paying users, rather than trying to build one from scratch.

In other words, it’s what happened in online video: Streaming services like Netflix and Amazon began by licensing content from producers, but, in the last few years, have invested greater sums into producing their own content.

Podcasting as an industry has been searching for sustainable, scalable revenue sources, but has run into fundamental technological challenges that preclude it from attracting more advertisers. Podcasting apps are basically just mp3 players, and since podcasts are — to their credit — so widely available on a variety of platforms, it’s impossible for producers to really see any data about their listeners. The best they can do now is ask users to enter promo codes at checkout, such that advertisers know where the traffic originates, but it’s obviously an imperfect system.

In contrast, Netflix (and I presume Amazon, Hulu, and others) have loads of data about their users ages and content preferences, and, as importantly, know exactly what scenes or situations withincontent their users enjoy. They own the platform, and so it’s easy for them to collect enormous troves of data and use it to sell ads, acquire new users, or create more attractive content.

Podcasting obviously can’t hold a candle to that sophistication of data collection. Yet. As noted above, the industry has begun a transition toward vertically integrated listening experiences — podcast producers both create and distribute content (namely by releasing an app), which will allow them to gather real data about users and their listening habits, and in turn, sell individuated ads against that data, while also tailoring content to fit listener preferences.

The result will be that consumers will eventually require a number of podcasting apps, much the same way a movie-lover probably has Netflix, Amazon, and Hulu subscriptions. Once podcast producers have a apps that live on users’ homescreens, it’s certainly possible that this sense of “ownership” for the consumer will allow producers to explore more aggressive monetization options. Since users are certainly conditioned to expect audio content for free, I wouldn’t be surprised to see podcast producers offer some sort of free-with-ads or $3/mo premium subscription option as a way to get listeners used to paying for audio content.

As long as there’s a tote bag on offer, they can count me in.

This post originally appeared on Silicon Spatula, where I write about tech, business and food, and the delicious times they coincide.

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