How We Listen Now: The Podcast Boom

As advertising brings in revenue, will listeners be left behind?

SOURCES: Apple, Edison Research and Libsyn

Ken Layne’s podcast streams from the High Desert, his gravelly baritone on tape loop reverb, gathering sand, heat, boulders, patient iguanas and petroglyphs from the lands of little rain to impart wisdom in the most intimate way, by speaking directly to listeners:

“Death Valley at 108 Fahrenheit is tolerable. You can walk around even if it’s mostly between the pool and the bar in your hotel room at Furnace Creek. People pose with the digital temperature display outside the National Park Visitor Center, and there are plenty of signs warning you not to attempt to midday hike, not to leave your dogs or kids or grandma in the car.”

Produced in Joshua Tree, “Desert Oracle Radio” entered its second season this past fall after joining with podcast behemoth PRX for distribution and with ad network Midroll for revenue. Layne also launched an offshoot called “Radio Sermon with Brother Layne,” which can be found on Popula, an ad-free journalistic site relying on blockchain and $4-a-month subscriptions for revenue.

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“Podcasts sound human, whatever the subject or production style, and there is an intimacy in having someone speak to you, right into your ears,” Layne says. “Pure sound and voice right to your ears doesn’t have all the business and fuzz of TV, of video. You can close your eyes. Radio is a magical thing when it’s done with a respect for the intimacy of the medium, and podcasts do that by default.”

And what could be more intimate than inserting a tiny pair of speakers into your ears and offering Brother Layne’s sermon a direct pathway to your brain?

It’s this moveable feast of podcasts coming through your earbuds that, according to consulting firm PwC, is expected to more than double the podcast industry’s advertising revenue to $659 million next year from $314 million in 2017. The number of available shows has likewise exploded to more than 550,000 on iTunes, the primary distributor. Not surprisingly, some 64 percent of Americans have become aware of podcasts, according to Edison Research. Yet only 17 percent of Americans — 48 million people — are weekly listeners, which means enormous growth could lie ahead.

Looking for recommendations? Check out Alta’s 10 Favorite California-Based Podcasts

But as podcasting grows from a cottage industry to big business, it’s not just the audience’s demographics that is getting monetized. Also for sale are listeners’ trust and the devoted communities that support the shows.

By wrapping itself in the primal practice of storytelling and pushing narrative traditions in new and unexpected directions, podcasting is creating an audio version of the web, where every interest and every audience, no matter how small, is represented. Communities of every size can be found gathered around an infinite number of podcast campfires listening to show hosts talk to them about the things that interest them — from beer-making to UFOs to the Tour de France. Top podcasts like “Serial,” “The Daily,” “Dear Sugars,” “This American Life” and “Stuff You Should Know” have become household names and multimillion-dollar businesses. The first two seasons of “Serial,” a breakout hit from 2014 chronicling a murder case, have been downloaded more than 250 million times, and its TV and film rights were picked up by HBO and Sky. Its third season kicked off this past fall after ZipRecruiter won a bidding war to be exclusive launch sponsor and Pandora paid handsomely to be the exclusive streaming platform. Meanwhile, “The Daily,” a news program from The New York Times, topped the Podtrac charts last summer and reportedly is generating tens of millions of dollars annually for the newspaper.

There also are terrific independently produced shows that follow a power curve of profitability. Near the top are titles like “Gastropod,” which looks at food through science and history and generates enough revenue to enable its hosts, Cynthia Graber and Nicola Twilley, to work full time on it. Then there are those making some money, like “Clothes Making Mavens,” a sewing podcast about handmade fashion that brings in a few hundred dollars a month. Following these is a long tail of often short-lived passion projects such as “Superkick!” a podcast by two friends who loved professional wrestling and talked about it for six months in 2017.

This sort of passion, and the resulting intimacy and trust that listeners have with their favorite show hosts, has proven very attractive to advertisers, making podcasting a bona fide media category. Podcast ad networks sell 15- to 60-second blocks of time, called pre-, mid-, and post-roll units, to corporate clients seeking to influence listeners of specific shows. The show hosts themselves typically voice the marketing messages, often ad-libbing to make them less jarring for listeners. Pricing is based on ad-unit duration, audience size and a show’s desirability.

“The value of engagement people feel with a show host translates to the advertising side,” says Brendan Monaghan, CEO of podcasting company Panoply. “People want to support the hosts of their favorite shows and the sponsors that support them. It’s the most loyal audience out there.” Earlier this year, Panoply shut down its content creation arm — which included Malcolm Gladwell’s “Revisionist History” and dozens of other smart programs — to focus on Megaphone, its advertising services division. The company, in other words, is going where the money is.

Yet the rising tide of good fortune may have come too fast, threatening to drown independent podcast creators. This past summer, PRX, which has 20 shows and $15 million in annual revenue, announced it would merge with PRI, a distributor of programming to 700 public radio stations. Also over the summer, No. 2-ranked publisher (and radio giant) iHeartRadio said it would buy the No. 5 publisher, HowStuffWorks, for $55 million. The combined organization would publish more than 680 shows, attracting more than 100 million monthly listens.

It’s unclear what these moves by podcast industry titans will mean for the vast majority of the half-million-plus shows out there, those not part of an ad network or of interest to distributors. But it doesn’t look good. Consider what happened with blogs during the 2000s. Journalists, professors, celebrities and aficionados of every stripe had one, but the phenomenon peaked in 2006. Big media companies moved in, creating their own blogs, buying others, co-opting audiences and ad dollars. Younger audiences drifted to social media. Today, few independent bloggers from that era remain.

“I do wonder if that will happen with podcasting,” says Gastropod’s Twilley. “We’re in a wait-and-see period to see if podcasting will go down that route.” If so, the pull of joining a network may be irresistible. “As an independent, you don’t want to get left out in the cold,” Twilley says.

Another potential problem: a glut of content. “Anyone can make a podcast,” says Gastropod’s Graber, “but that doesn’t mean you should, especially if you want anyone other than your parents to listen to it.”

Too much content would inevitably drive down the advertising dollars that shows can charge. Fears of an ad-pocalypse are fanned by rapidly increasing audiences and new ad delivery techniques. The next big thing in podcasting is dynamic ad insertion, a powerful feature that allows ad networks to serve audio commercials to podcasts on the fly. The 20-second pre-roll once sold to advertisers, in which a show host reads a commercial message, will be replaced by slick, third-party ads that get delivered into the podcast based on a real-time ad auction or perhaps by targeting a listener’s interests. It’s a far cry from the innocent methods so far used by shows large and small to connect advertisers to their listeners.

While it’s easy to bemoan how advertising dollars may push podcasting toward something resembling a mature media industry, the field may be able to remain large enough to accommodate professionally produced high-dollar operations as well as humble enthusiast efforts, while also providing for upward mobility. All successful podcasting depends on authenticity and intimacy, even if it leads you to buy something.

“Our sponsors are small businesses within the sewing community,” says Helena Ashbridge, co-founder and co-host of “Clothes Making Mavens.” “They support us, and our listeners support them.”

From the High Desert, Layne sees the podcast industry’s current blossoming as part of a spirited adolescence. “I love to see the wild new companies show up out of desire for making art or changing the world. That will always happen, and should always happen,” Layne says. “The inspiration is usually good and the end results are usually bad, but some art and other advances in civilization usually occurs before it all goes to the devil.”

Passion can lead to profit. Or it can just lead to more podcasts.

Blaise Zerega is Alta Journal’s managing editor.
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