Last year, the Interactive Advertising Bureau released a report estimating that the podcast industry generated $479 million in 2018 and is projected to make $1 billion in 2021. Not only is this a tiny pittance compared to the money generated by other mediums like TV and search, but podcasting has also been limited by its over-reliance on advertising.
Unlike, say, Netflix or The New York Times, most podcast companies have struggled to gate their content behind paywalls, and most major podcast apps don’t provide a way for podcasters to directly collect money from their listeners.
But several companies, like Spotify and Luminary, are attempting to bundle exclusive podcasts and sell access to them behind a subscription paywall. Other platforms assist individual podcasters in converting their listeners into paying subscribers.
The company Glow fits into the latter category. Founded a little over a year ago, Glow developed technology that allows a podcast’s paying subscribers to listen to paywalled episodes on their podcast player of choice. I recently interviewed its co-founder Amira Valliani about how she’s solving the paywall problem and why she thinks paid podcast subscriptions will eventually scale.
To listen to the interview, subscribe to The Business of Content on your favorite podcast player, or you can play the YouTube video below. If you scroll down you’ll also find some transcribed highlights from the interview.
This transcript has been edited for clarity.
Before she founded Glow, Amira sold advertising for other podcasts. But she found this process frustrating, for both her and the podcasters she represented.
I would go out, I would build relationships with a bunch of different podcasts and say, ‘Hey, let me try to help you find advertisers. I’d go out and find potential advertisers and say, ‘this is a great fit for you,’ and then I’d broker the deal.’
You see a lot of podcasts out there with super engaged audiences of 10,000 to 15,000 downloads per episode, and you go out and sell ads for them and a couple of things happen. Selling that first ad is incredibly difficult because no one has any metrics to start with, right? Like all you have is the number of downloads per episode. There’s fairly limited demographic data. But in addition to that, maybe you saw that first ad and maybe the direct response campaign is good, but in reality, the amount the podcaster was making off that ad compared to how much time they put into making it, it just didn’t add up to much money.
So yeah, we’d have these podcasts with great in-depth audiences, but because they focused on topics that weren’t traditionally related to really lucrative industries, we’re having a really hard time getting those first ad dollars. But even when they got that first ad money, they look at the check at the end of the day and they’d say, yeah, I’ll make 250 bucks from this thing and I have to cut my show right in the middle. They want me to read a script for underwear. I don’t know if I really want to do that. And on top of that, they take six months to pay me. And so it’s a really difficult environment to really make sense for the podcasters . It was incredibly frustrating for the podcasters we worked with, and it’s not that they weren’t making some money, but the the work in and the output were just totally disproportionate, and you’d just get frustrated with the process.
She talked about how she pivoted to memberships and founded Glow.
So I’ll say very rarely did I hear podcasters say, ‘I don’t want any advertising.’ But what I found was that advertising is an insufficient revenue stream, and they’re all hacking their own ways together to make revenue by engaging their listeners directly. And what I found so interesting was that listeners wanted to support them. I met podcasters who developed membership programs where they literally hired these development teams offshore to build a membership program where they create their own app just to distribute their premium content, and then they spent all their time thinking about how to maintain this team overseas. How to update the app and make sure it was up to date with the latest iOS update instead of working on the thing that they’re really good at, which was the content creation.
So it wasn’t that people said ‘I’ve had it with ads.’ It’s that they said ‘I’m creating something with a lot of value and what I’m getting in return does not seem to be proportionate with the ad dollars I’m getting, so I’m going to figure this out myself.’ And I saw a lot of podcasters go out of their way and try to figure out a system to engage with their listeners directly and let their listeners pay them directly and that was the inspiration behind Glow. It was like people are already doing this, they’re finding success. It should not be as hard as it is.
So while I was doing the advertising side of the business, I also had my own podcast and it was a local news podcast about the town I was living in, which was Cambridge, Massachusetts. And I had an awesome time putting it together and reporting on the city council election. I got all these people who were listening to it who were excited about it. And at the end of the election I said, ‘you know, I wanna keep doing this. I want to figure out how to make money off of it. And I went out and I interviewed a bunch of my listeners and they were really pumped by it. And as I went back to the drawing board and thought about a business model, I knew advertising was going to be a tough road if I wanted to really make money, and then I thought a subscription model could work well.
And where I was going in my head was like, let me build a subscription podcast with access to a newsletter that comes out once a weekend and maybe add on guides where people got access to school news, the newest restaurant openings. I was thinking of basically like a multifaceted local media company where people would pay for value. And people told me they were willing to pay for this stuff. It was grounded in tons and tons of user interviews. And I turned around and tried to build the MVP version of this, and it was really, really, really difficult. And what I did is I hacked together a version of Squarespace where I collected contributions. I put information in Google Docs with restaurant recommendations and school recommendations. I have a MailChimp where I email out to them through regular email and then I tried a paywalled podcast, and there was no simple way to do that.
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Ok, back to our scheduled programming…
How Glow actually works
Let’s say your podcast is launching a weekly behind-the-scenes addition where listeners can pay $10 a month to get access to the latest pieces of content. They would hear a call to action that says, ‘today we’re launching the insiders program for $10 a month to have access to premium content that no one else has access to. You can click on this link in the show notes or go to a link online.’ When they click on that link, a web view appears. The listener sees the details of the program with your branding and they just have to tap a link that says ‘subscribe today.’They check out using Apple or Google Pay, and then they’re taken to a list of podcast apps and it might say Apple Podcasts, Overcast, Pocket Casts.
And so let’s say you listen through Apple Podcasts. After you click on the link then you’ll see the premium feed right next to all your free content and you’d see the paid content that’s only available to you. What’s happening behind the scenes is we’re actually creating a private RSS feed just for that subscriber that we can turn on and off depending on whether or not you’ve paid. And so that content doesn’t appear on the iTunes store. It’s just available for that specific listener.
How big is the market opportunity for this type of product?
If you think about podcasting versus terrestrial radio, about 20% of Americans listen to podcasts on a weekly basis. Today, 90% of Americans listen to terrestrial radio on a weekly basis. So there’s just so much growth to be had from a sheer market size capacity.
Subscription platforms like Glow don’t work on Spotify or Pandora, since they don’t pull from RSS feeds in the same way that other podcast apps do. I asked Amira if this limits Glow’s growth potential.
The short answer is no. I don’t think it poses a threat that’s novel. I think what we’ve seen happen over the past 10 years is content creators are getting increasingly savvy about what happens when platforms enter the game, and so a lot of people are excited that Spotify entered podcasting and has really grown the market size and is helping fund a lot of content. But when you talk to a lot of content creators, they’re quite wary, because they saw what happened with YouTube and they saw what happened with Facebook, and they know what happens when a platform starts entering a content creation market, they bring a lot of hope because they help with distribution and they can also help with monetization because of ad dollars, but ultimately you’re giving up control to an algorithm that the platform controls and monetization is a mechanism that the platform controls. And so what we’ve seen when we talk to content creators is they’re being really thoughtful about how they make money because they know that the best way for them to monetize is through a direct relationship with their listener.
What kind of content are podcasters placing behind the subscription paywall?
It varies completely with the podcast. Just like with any product, we really encourage our customers to think about what is the job to be done when your listeners are hearing your show and how can you help them double down on that. So we see a range of things — radio diaries, ad-free content, unedited interviews. It’s less choosing a particular piece of content from a categorical perspective and more about thinking about what your listeners’ goals are and how you can help serve them.
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