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Aug. 18, 2015, 10:11 a.m.
Business Models
Mobile & Apps

Hot Pod: The Netflix-YouTube-Twitter-Starbucks of podcasting

Nick Quah’s terrific weekly email newsletter about the podcasting business has a new home here at Nieman Lab.

Editor’s note: Podcasting is one of the most interesting growth areas in media. (You do listen to our own Nieman Lab podcast, Press Publish, don’t you?) From the early days of docking your iPod to iTunes to today’s mobile, on-demand world, podcasting has been home to a lot of experimentation — both in content and in how to make money.

My favorite way to understand what’s going on in podcasting has been Nick Quah’s opinionated email newsletter Hot Pod. There aren’t many people smarter than Nick, who works at the Slate-founded podcast group Panoply, about how podcasting is changing and evolving. I’m happy to tell you that Nick has agreed to make Nieman Lab the online home of Hot Pod, where you’ll be seeing a new edition every Tuesday. (You can also subscribe to Hot Pod here.)

Welcome to Hot Pod, a newsletter about podcasts. This is Issue Thirty-Seven, circa August 18, 2015.

Hey folks!

If this is the first time you’re encountering Hot Pod, now that it’s on Nieman Lab and everything, hello and welcome and I’m glad you’re here! Before we begin, here’s a quick disclaimer which should also serve as a primer on how to read this: it’s crucial you should know I’m not an unbiased observer. I do audience development work for Panoply, the new podcasting company launched by the Slate Group, which is to say, I’m have both emotional and financial stake in the affairs covered here. That being said, I do work pretty hard to be as fair and clear as possible in my attempt to make sense of the space. But if my position bothers you, I recommend reading this newsletter less as a column and more as…field notes. Dispatches from the ground. Something like that. Or you can just roll with it, y’know what I’m sayin’?

Let’s do the news.

Three big things. It’s been a long ten days, folks. You’d think the summertime would be chill and everything with folks spending time with their families and whatever but no, not a chance, nuh-uh, that’s not happening. I haven’t seen my own children in weeks. Let’s get the major updates out right off the bat:

  • Midroll Media rolled out its premium streaming service for podcasts, dubbed “Howl Premium.” Financial Times (watch the paywall) and Fast Company with the sweet, sweet write-ups.
  • Panoply acquires Audiometric, a podcast publishing and advertising platform. RAIN News here with the brief.
  • ACast joined a programmatic advertising platform called a2x. The platform belongs to Triton Digital, a large media group that owns radio stations and operates audio advertising marketplaces. RAIN News, again, with the report.

So Midroll’s Howl Premium service, which is channeled through its Howl app released earlier this year, is so incredibly fascinating on a couple of levels:

  • The content offerings suggest a move to “flatten” — or “open up,” depending on the metaphor you’d like to use — the concept of a podcast as a spoken audio product. Where a podcast is typically associated with programming that are aesthetically/formally akin to radio shows, Howl Premium also includes whole standup comedy albums as part of its inventory. That might seem like a small inclusion, but things like these may go a long way in reconstructing perceptions of what one means when one talks about “podcasts,” especially at this point when the medium is still niche. Midroll’s placing of premium content behind a paywall would also give them more affordances to further pull apart the concept; free from the game of managing advertiser expectations, the company is now a better position to commission works that could drastically play with the format. Which is to say, they can really break the form without breaking their backbones; they could experiment more with audio fiction, anthologies, and different ways of cutting a limited-run series, and perhaps even go the distance and take advantage of the fact that audio is mainly consumed not as the focal point of one’s attention, but as an additional layer on one’s moving through the world.

    Midroll’s flattening of the podcast format with other kinds of spoken audio media is reminiscent to Spotify’s possible flattening of podcasts against music content. It remains to be seen how Spotify will ultimately choose to organize and present podcasts within its UI/UX, but given that Spotify’s home base lies in music content, it’s not a stretch to imagine that the company could choose to bundle podcasts along with music in one of its “Moments” playlists. Sure, that sounds absurd, but so does EDM, so what of it?

  • Midroll’s choice to play the premium subscription game — with content and a sizable amount of back catalogs placed behind the paywall — and the subsequent positioning of the product as the potential “Netflix for podcasts” exhibits a very specific hypothesis of podcasts as consumable media, one that posits podcasts will be valued by audiences enough where they would pay for it and that enough podcasts have back-catalogues that will be deemed “worth it.”

    This is difficult enough to internalize in the present tense. Unlike Netflix and television/movies or Tidal and music, podcast audiences have little-to-no experience with paying for shows in the past, and the hurdle of convincing users to go from an entire experiential history of enduring host-read ads, which they can skip fairly easily, to paying for an ad-free experience is tremendous. For color: The reaction among Midroll’s community base, represented here on their forums and this subreddit, has been fairly mixed.

    And on the point of back catalogs, that’s a tactic that would work for some genres and not others — WTF with Marc Maron makes sense given the evergreen nature of much that show’s content, but I have trouble imagining it would apply well for something like, say, the Political Gabfest, which is topical and pegged to the news cycle. I also have trouble imagining that it would apply well to looser content like, oh I don’t know, Idle Thumbs or something.

Now, why am I talking about the Political Gabfest and Idle Thumbs when we’re talking about Midroll, a company which has its own content properties strewn across two podcast networks that are anchored in the West Coast/comedy sensibility? Because their long game seems to be a play to become the biggest — perhaps the only — point of attention for podcast audiences, as suggested in the following quote off the Fast Company article:

For now, Howl will only include its own networks’ podcasts plus the licensed content from WTF and Comedy Central—but concrete plans are in the works to make the platform a true all-in-one listening app for content of all kinds. “We want to be the place where you go and listen to Freakonomics, if you like Freakonomics or you listen to Radiolab, if you like Radiolab, because the listener experience is that much better than any other player out there,” says [Midroll CEO Adam] Sachs.

Let’s assume that Midroll is actually planning to push forward with a play to become the one-stop-shop for all podcast audiences. In that case, the company will have to commit to the struggle of trying to convince other content providers — some possibly with their own consumer-facing competitors. That would be an incredibly hard fight, where it will win only on some fronts and lose others. “It’s a street fight,” a really smart person remarked to me when trying to make sense of where we’re all going. In such a situation, we’ll probably see a Balkanization of the landscape, leading to a state of affairs not unlike…oh I don’t know, the Netflix vs. Amazon Prime vs. Hulu conflict we see today. (And if we were so bold to think in the long, long run, we’ll probably see all podcasting firms under one giant corporate banner — because in the long run, we’re all dead in more ways than one anyway.)

And speaking of other content providers with their own consumer-facing competitors, let’s talk about Panoply and ACast. Panoply announced last week that it had acquired a publishing and advertising platform — essentially, a robust podcast CMS that seeks to be an end-to-end solution with ad-insertion capabilities to enable that an programmatic ad environment. It’s early days, and there’s so much potential to be tapped here.1 Where Midroll has tilled its soil in the premium streaming service model and Gimlet has gone full-out production company (with the added flourish of a Slate Plus-style insider membership model…for now), Panoply is in a relatively privileged position where it still has yet to fully define what it can and wants to be, which is both incredibly exciting and utterly terrifying (not unlike, say, one’s early twenties).

A similar story can be told about ACast, I believe. The Swedish podcasting company, which is manned by a couple of Spotify veterans and currently controls a sizable chunk of the European podcasting market, has so far made its name as being an all-in-one, one-size-fits-all solution in those foreign markets. Their principal offering is an end-to-end platform that hosts, manages, packages, and delivers podcasts through an app. It, too, strikes me as a company that’s aggressively feeling out its position and potential, and with its entry into a2x, I think we’re seeing ACast committing itself to a theory of the podcasting that’s parallel to Panoply’s.

Regardless of their pubescence, both companies are putting their faiths in platforms that support a vision of the podcast ecosystem that’s mostly ad-supported. This vision that’s supported by a parallel faith in programmatic audio advertising which, one would imagine, foretells future CPM standards that would possibly look a lot different from the ones we’re seeing today.

Midroll, Panoply, ACast — the way things are going suggests a pretty exciting narrative: one where these companies are racing to define and claim the center of the podcast universe, or even better, to flat out become the podcast universe.

Man. It’s all so dramatic. I love it.

About that NPR situation. Yikes. I tell ya, if I were writing this entry on Saturday, or if this whole Howl Premium thing was actually announced on Wednesday, this story would’ve taken up a whole two-thirds. But them’s the shakes, and these Nieman Lab folks have standards, so I’m going to keep the lukewarm take here fairly brief. First, some essential reading and listening for context:

  • “Can NPR seize its moment?” (Politico Media)
  • The Pub Podcast, #31: Adam Davidson on the economics of public radio in the podcasting era (Current)

If you’re one of those TL;DR folks (like me, I only read in tweet-length chunks, I’m such a ~~millennial~~), here are the main points on the specific thread I want to talk about:

  • During an informal meeting at NPR’s New York bureau back in December, NPR CEO Jarl Mohn — who had been at the job for half a year and is the institution’s eighth CEO in eight years — got into a heated exchange with a young Planet Money staffer who had raised questions about the organization’s perceived lack of urgency in terms of adopting digital formats, specifically podcasts.
  • The incident was largely interpreted as an expression of Mohn’s commitment to broadcast (a conservative stance, if ever there was one). The Politico Media piece underscored this commitment by highlighting a quote Mohn gave Current.org back in February: “Broadcast radio is the cockroach of media…You can’t kill it. You can’t make it go away, it just gets stronger and more resilient.”
  • On last week’s episode of The Pub, host Adam Ragusea argued that while we can choose to read Mohn’s outburst as a kind of technological backwardness, that would be ignoring a fundamental truth that lies at the heart of NPR’s organizational imperative: that its primary customers aren’t actually listeners, it’s broadcast-native and broadcast-dependent member stations. His guest, Planet Money cofounder and current New York Times Magazine columnist Adam Davidson, rounded this narrative out by describing Mohn as having a deeply unenviable position: of having to please member stations while preparing for the digital disruption that’s due to come.

Cool. Cool cool cool. Now here are a couple of more things to add to the mix, while you’re chewing on all that:

  • Using numbers from NPR’s 2014 financial statements, almost 40 percent of the organization’s revenues come from member stations that pay for the rights to air NPR-created programming, among other things. NPR also a satellite system (because, you know, broadcast), for which they charge member stations, and that make up for a little over 10 percent of revenues. The remaining revenues come from a mixture of corporate sponsorships, grants, investments, and, amusingly, “other sources” that includes NPR-branded consumer products — SO BUY THOSE TOTE BAGS, DAMMIT. This effectively means that NPR is dependent on member stations for roughly more than half of its revenue, which means it certainly can’t up and embrace a digital distribution model like podcasting because to do so would mean bypassing member stations and serving content to audience directly.
  • Ultimately, NPR is a victim of its big bundle of interests and commitments. When organizations get as big as NPR, they become less nimble, dynamic, and able to take on large-scale shifts in conditions — which is perfectly natural and totally something to be expected.
  • Worth asking, no matter how it pains me to do so: Is it really that bad to let NPR struggle? Is it really that bad that they take some revenue hits over time, pegged to whatever’s bound to happen to broadcast-dependent member stations, and that they can shrivel and shake off their commitments for a bit? Maybe…that could be a good thing in the long run?
  • One could suggest that a prudent strategy would involve pitting one rate of change against another: that Mohn could perhaps roll up his sleeves, grit his teeth, and rip up the floor boards and try to grow direct-to-consumer digital revenues at a rate that outpaces a falling of member station-generated revenue (if it all doesn’t get pulled in one fell swoop). Is it possible? Sure. Is it plausible? Probably not. Mohn is only human, and human beings are wont to be ground to dust by structures and organizational imperatives. One could also ask: Why don’t member stations just get off their broadcasting butts, go digital themselves, and back off from NPR’s case? Fair question. Probably because not all member stations are created equal, just as how not all cities, counties, districts, and states are not created equal.
  • Slightly unrelated but still worth mentioning: member stations are so much better positioned than NPR is to embrace podcasting. See WNYC.

An industry-wide upfront. It is typically the case that a young, outside entity must partake in the rituals and ceremonies of the older, more established entities to be fully accepted into — and perhaps trusted by — the community. That’s why we have proms. Debutante balls. Bar mitzvahs, even.

And so now we have a bar mitzvah for podcasting which, in seeking validation from the ad agencies of yore, will have its first industry-wide upfront showcase on September 10 in New York. It will involve both public radio players, like NPR and WNYC, and private players, like Panoply, Podtrac, Midroll, and AdLarge. (For a good write-up, hit up this Wall Street Journal piece). The upfront is organized by the IAB, or Interactive Advertising Bureau, which is a trade association that does swell things like push for cooperation among organizations around things like standards, ethics, and research. The upfront is an extension of their work with podcasts — which is to say, this isn’t coming out of nowhere — which has chiefly revolved around two working groups that they’ve been holding. (One business-related, one technology-related. Pretty fascinating list of players, and if you look super closely, you can see the fault lines of where the politics/struggles lie.)

Of course, this isn’t the first podcast upfront ever — in fact, it’s not even the first podcast upfront this year. (And, depending on your definition of summer, it’s not even the first podcast upfront this summer. When does summer begin, anyway? I tend to think of summer as beginning when it gets really hot. But then again, I sweat easily.) Back in April, New York’s (Le) Poisson Rouge saw a podcast upfront organized by a public radio coalition that includes NPR, WNYC, and WBEZ. That dog-and-pony show revolved around nonfiction narrative audio content, which the public radio players pushed as the defining edge of the medium, and as a result the showcase played out a narrative that largely served as an education of and an argument for that specific kind of spoken audio content.

With the IAB’s podcast upfront, we’re probably going to see an expansion of that narrative. Not just in terms of content-type — though, rest assured, we’re going to be seeing a lot more talk about conversationals and semi-/unscripted content — but also in terms of the non-content aspects of podcasting: technology, ad formats, and so on. Which would be refreshing, because the podcasting universe is a many splendid thing.

Anyway, I’m told that I’m going to be at this thing. So if you’re there, come say hi!

Makin’ moves. I recommend paying close attention to Audible over the next few weeks. Ever since former NPR VP of programming Eric Nuzum took up reigns as the company’s SVP of original content earlier this summer, you can bet that’s he been working the rolodex — and the first waves of those hires are coming very soon. Word on the street involves a long-time WNYC staffer for a powerful, managerial position. It’s all quite exciting, and I look forward to Audible moping the floor with our faces. I mean, we can run and fight all we want, but at the end of the day, the Bezos comes for us all.

In related news, I hear that Invisibilia team over at NPR has picked up a new producer, which means they’ve finally gotten the budget they’ve been pushing for — which was apparently being held up by management. The insanely successful podcast, which had the distinctions of being public radio’s biggest program launch ever and achieving 10 million downloads in under a month, is probably the centerpiece that anchors much of NPR’s internal struggle over what to do with this whole digital thing.

Fun fact: Did you know that the marketing dude at MailChimp responsible for propping up, like, the bulk of the podcast industry has the last name Shakespeare? Crazy. CRAZY.

Woof. Cool. That’s it from me this week. See you next Tuesday, I guess?

Nicholas Quah heads audience development at Panoply.

Notes
  1. Again, just as a reminder, I’m an employee at Panoply, and my uppers have been nice enough to let me run my mouth freely, and much of what I write is based on a personal attempt to understand and visualize the larger state of play. I swear, some day this is going to bite me in the…well, you know.
POSTED     Aug. 18, 2015, 10:11 a.m.
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