Audio Content — Challenges and Opportunities
I have been excited about audio content and researching on the space since some time. I wrote on Alexa / Google Home some time back (here) and on Short Mobile Video space (here). Lots of entrepreneurs reached out to me reading the posts and I got an opportunity to discuss with more people on the space. Happy to share deeper thoughts doing some top down thinking. Happy to discuss and brainstorm.
History and definition of podcast:
Source: Wikipedia, Stratechery:
A podcast is an episodic series of digital audio or video files which a user can download and listen to. It is often available for subscription, so that new episodes are automatically downloaded via web syndication to the user’s own local computer, mobile application, or portable media player.
The word arose as a portmanteau of “iPod” (a brand of media player) and “broadcast”. Thus, the files distributed are in audio format, but may sometimes include other file formats such as videos, pdfs, etc
Probably the first modern podcast was created by Dave Winer in 2003, although it wasn’t called a “podcast”: that was coined by Ben Hammersley in 2004, and the inspiration was Apple’s iPod. Still, while the media had a name, the “industry”, such that it was, was very much the wild west: a scattering of podcast creators, podcatchers (software for downloading the podcasts), and podcast listeners, finding each other by word-of-mouth.
In June 2005, Apple released iTunes 4.9 which added formal support for podcasts, thus negating the need to use a separate program in order to download and transfer them to a mobile device. While this made access to podcasts more convenient and widespread, it also effectively ended advancement of podcatchers by independent developers. Within a year, many podcasts from public radio networks like the BBC, CBC Radio One, National Public Radio, and Public Radio International placed many of their radio shows on the iTunes platform.
Podcasting versus Blogging or Video Creation:
Relevant links:
There are three major differences between audio publishing and text/video publishing:
- Creation of audio is much more difficult that creation of text content. Compared to video though, I believe creating audio content comes naturally to humans. We get intimidated on video but recorded edited audio, audio in the format of interviews, live streaming, etc come very naturally to most people. Interestingly, consuming audio content is easier compared to both text and video — its fast, it does not require visual attention, and its low cost.
- Discovery of text and video happens through search, social media and subscription while discovery of audio happens primarily through subscription over Apple products (iTunes, Apple Music, etc) primarily. Consecutively distribution is also a challenge for podcasters.
- Monetisation on text blogs is easier through google adsense, on videos is easy because advertisers understand TV well anyways, but it is very difficult in podcasts.
Challenges:
While the market is large from consumption side, the challenge though for publishers is that a) its difficult to be discovered, and b) its difficult to monetise.
Discovery:
1 — Search traffic is difficult and the only way to get it on SEO is through tags.
2 — Social media (Facebook / twitter) is not very easy as feed is not the best form to consume audio content as it required call to action during the scroll
3 — The Youtube for Audio companies like “SoundCloud” are good publishing tools but do not enable good discovery / social features.
4 — iTunes or Apple Music lacks universality. It does not run on website — needs Apple Music app on Android. Content aggregation happens through iTunes. Not every publisher wants to be on iTunes. The listing criteria are stringent. But because its the largest distribution platform, most people have to stick to the platform. Estimated 60–70% of all listening happens on Apple technology (iPhone, iPad, iTunes) and 20% directly on the iOS native Podcasts app (reference)
Relevant posts on the topic from other people:
In my mind, this problem might be solved on Alexa / Google Home. Alexa and Google Home could provide the distribution platform needed for podcasts to scale. We have to think strategically though on how to provide best customer experience here. It cannot be feed based distribution because Alexa/Google Home would not offer choice functionality. It has to be smarter than that. The search capability can be drastically improved now as speech to text technology has improved significantly in last 12 months. Think like a consumer. How do you discover audio content today? How would you want it to be discovered on Alexa?
Monetisation:
A major challenge in podcast monetisation is the complete lack of data: listeners still download MP3s and that’s the end of it; podcasters can measure downloads, but have no idea if the episode is actually listened to, for how long, or whether or not the ads are skipped.
It also won’t scale. Total podcast advertising market a couple of years back was between $34m to $200m depending on who you ask. This is too small for most large advertisers.
Startup opportunities:
I might be wrong here, but I am not sure building another podcatcher would work. Apple has killed that market. Its the large dirty gorilla because of which no innovative player in able to solve the problem, and Apple is not solving the problem itself either. The opportunities I see are around two verticals:
a) Creation Tools: Can you help people create content better? Something like contently for audio? or Instagram for audio? There are multiple companies doing interesting stuff here and have the potential to correct the market (eg: https://anchor.fm/ )
b) Distribution: Distribution on web is difficult to solve because of the way Apple has cornered the market. Would new platforms like Alexa/Google Home give opportunity to new companies? Is there a radically different way to solve the distribution problem on web circumventing Apple screw up? (Eg: Stitcher https://www.stitcher.com/ took an interesting approach to solve this problem by making podcasts un-downloadable. That way data problem is solved, which leads to easier monetisation, which leads to better supply, which leads to better consumer traction. Eventually Midroll acquired Stitcher.)
c) Publishing: You could of course be a high quality vernacular content publisher and get word of mouth adoption. I do not know if a large company can be created, but potentially a good business can be created for sure.
Super excited about the opportunities. The intent of the post is to start a dialogue. I am sure entrepreneurs will create the space is ways I cannot imagine — so the top down thinking is just like the rough last page of the copy scribbling. If you are an entrepreneur operating in audio content space, and would want to brainstorm, please feel free to reach out.
Disclaimer: Views expressed here are my personal reflections and not indicative of the views of my current or previous employers. No part of this post maybe reproduced or quoted without explicit permission.
