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May 28, 2019, 10:52 a.m.

The Chinese “podcast” industry isn’t really podcasting as Americans think of it, but it is fascinating

Plus: Third Coast is getting a new leader, Vox Media ties podcasts into events, and Podtrac fiddles with its numbers.

Welcome to Hot Pod, a newsletter about podcasts. This is issue 211, published May 28, 2019.

We’re goin’ real deep on China this week, so the newsletter is going to be structured a little differently than usual. First, some news bites.

Johanna Zorn is leaving the Third Coast Festival. The executive director and co-founder of the Chicago-based audio documentary conference will be departing in the fall, and the search for her replacement will kick off later this week. The move was announced Wednesday through a letter published on the Third Coast website.

Obviously, this is a major development for the beloved conference, which has become one of the most, if not the most important gatherings for radio and podcast producers since its founding almost two decades ago. Third Coast grew particularly quickly over the past few years — tracking the growth spurt in the audio world around it — the biggest expression of which was the decision to shift the festival towards an annualized schedule in 2016. (It was previously held every two years.)

When asked about the reason behind her departure, Zorn sent this over:

There’s not one reason, but a multitude of reasons why this feels like a good time to leave. Here are 2 big ones:

When Julie Shapiro and I co-founded Third Coast back in 2000, This American Life was a new show and ATC aired radio docs by a handful of amazing producers now and again. Hearing this great work, we wanted to help build a rich, diverse and popular field of audio storytelling. And we committed ourselves to the dream. The advent of podcasting helped immeasurably. While the work is never done, I feel like our original vision is mostly fulfilled and I’m excited to see an evolved vision by the next ED plus staff in this age of podcasting.

Personally, I’m ready to flex my creative muscles away from the demands of running an arts nonprofit. It’s pretty exhausting work and leaves me very little time to think, play, or perhaps even document the transformation that I’ve both been a part of and witnessed. I look forward to a new set of possibilities for me.

She will take the stage at the next Third Coast Conference in November to bid adieu.

Vox Media’s Codecast. Now that Recode is officially part of Vox.com, Vox Media is adapting the Code Conference, the live events gem at the center of the Recode brand, to more broadly integrate the rest of its digital media properties. As such, attendees at the next Code Conference, due to take place in Arizona in a few weeks, will also be treated to on-stage programming driven by journalists from The Verge and so on, in addition to the usual Kara Swisher/Peter Kafka-driven stuff.

But that’s not the only expansion Code Conference will see this year. The event will now involve an additional day of live podcasts, called CodeCast, that’ll feature programming from Vox Media — and, notably, a string of outside partners, including Gimlet Media, WNYC Studios, and Girlboss.

Out east. I am, naturally, interested in China. Partly because I’m always going to be curious about what folks who look like me are up to, but mostly because when it comes to China — by some measures the largest economy in the world — you’re never quite unaffected by its machinations.

Podcasting (and on-demand audio more broadly) is no exception. The past few months have seen increased interest in some corners of the podcast industry (and the VC world) about what lessons podcasting in China can bring to the American market — specifically as it pertains to business models.

Much of this, it seems, was catalyzed by a Marketplace story last September about the country’s robust “FOMO” industry (think self-improvement economy), estimated to be worth around $7.3 billion last year. Crucial to this industry is a layer of paid subscription audio businesses that are mostly facilitated over massive audio platforms, the biggest of which is Ximalaya FM. (The name might be familiar to some readers for its position as the main investor in Himalaya Media, the podcast startup that drove some press earlier this year for raising $100 million without much of a preexisting presence to speak of.) Anyway, that Marketplace story used the word “podcast” to describe that healthy paid-subscription audio layer, and the nomenclature appears to have stuck. One prominent expression of this: Ximalaya FM factors heavily as a case study in a recent blog post by Andreessen Horowitz, the powerful VC firm, that lays out its investment thesis on the podcast industry.

I’ve mentioned this occasionally in the past, but the word “podcast” as used in that Marketplace piece is at its core a misnomer. Anyone trying to compare the U.S. podcast industry with a Ximalaya-centric view of the Chinese audio market should be wary about a category mismatch; the proper comparison would be to the U.S. podcast industry grouped together with the wider universe of audiobooks, meditation apps, and, at some future point, Spotify. This isn’t to dismiss efforts to draw lessons from the Chinese audio market for American players — there are definitely things to learn. I’m just saying that we should be crystal clear on what’s being invoked…and what’s being asked for.

Anyway, that’s been my view on the matter, and I’m just some schmuck blogging out in Connecticut. So I figured I’d reach out to someone who’s on the ground, which brings me to Yi Yang (杨一). Based in Shanghai, Yi Yang is the senior editor at a CNBC-esque Chinese TV business network, and on the side, he runs a few podcast-related projects in the country. They include a podcast called Left and Right (忽左忽右), an emerging industry event called PodFest China, and a Hot Pod-esque newsletter about Chinese podcasting called JustPod (播客一下). We’ve known each other for a bit, and I thought I’d send over some questions. He was kind enough to respond with in-depth answers.

A few things to note before we shift over to a Q&A:

  • A quick data point: Ximalaya FM self-reports that its app has been downloaded over 540 million times. I was also referred to this 2018 article on Wall Street CN in which a Ximalaya insider claims that the platform has nearly 40 million daily users. Take from that what you will.
  • While there are major differences between the two markets, there are many, many similarities in the underlying dynamics. Indeed, one gets the sense that the core differences stem from a historical divergence: one market has had a fully active, dominant platform for quite some time, while the other still does not.
  • Another thing you’ll also notice: the core tension around the word “podcast.” It’s tempting to consider this some sort of loss in translation, but you see this same conceptual squishiness here in the States, too. (See: Luminary.)
  • An editing note: I’ve condensed, edited, and streamlined Yi Yang’s responses for flow, and I also had to leave some stuff out for space, too. Also keep in mind that this Q&A represents the views of one person interpreting a complex system, and there’s a lot of load being placed on this single viewpoint. I’m confident there are many other facets of Chinese podcasting that aren’t expressed here, and hopefully we’ll have the opportunity to highlight those in the future.
  • Quick shoutout to my dad, who has always insisted that China would find its way to my work some day.

Okay, let’s jump into my Q&A with Yi Yang, editor of the Shanghai-based Just Pod.

Hot Pod: How do you think podcasting in China is viewed here in North America, and what do you think of those perceptions?

Yi Yang: When I talk to friends from the West about podcasts in China, my sense is that the first concept that comes to mind is the “Pay for Knowledge” model. I suspect this mostly comes from last year’s Marketplace story, which introduced Westerners to a certain interpretation of the Chinese audio market, its market scale, and its social environment.

But I have to say that it would be a mistake to equate “Pay for Knowledge” with “podcasts” or to treat it as “popular podcasting” in China. In my opinion, “Pay for Knowledge” and “podcasts” are two very different things. I personally see the Pay for Knowledge model as part of online education — more similar to massive open online courses (MOOCs) than anything resembling “paid podcasting” or the “Netflix for podcasts” idea.

Of course, there are independent podcasts in China outside of the Pay for Knowledge ecosystem. I’ve seen some Western sources try to describe this, talking about how they are able to cover some “topics often revolving around those not covered by mainstream outlets” as “a result of the medium’s open nature.” To some extent, this phenomenon does exist, but it’s not the mainstream. It’s true that Chinese podcasts exhibit some “independent” nature, but I think it is different from the “independence” understood in Western values. It is not a “rebellion” in values, but of natural vitality due to the diversity of content and the amateur level of production.

I must also emphasize that language is often an obstacle to understanding the podcast world of other countries. So if you try to define “Chinese podcasting” after reading some English-language coverage — even if it reflects a panoramic view of Chinese podcasting — it would be obviously biased through the perspective of the English-language speaker. When the English media writes stories about Chinese podcasts, the people behind the story usually select the most special and interesting stories. These cases may be interesting, but they do not tell the entire story.

Hot Pod: Could you briefly walk me through the history of podcasts, or on-demand audio more generally, in China?

Yi Yang: If we see the article written by The Guardian’s Ben Hammersley in 2004 as some kind of starting point for a “podcast,” then its appearance in the Chinese world is quite early. The earliest batch of Chinese podcasts appeared around that time, and one of them, called Antiwave (反波), won the award for Best Podcasting Site of the 2005 Deutsche Welle International Weblog Awards. But there were very few people listening to podcasts back then. Nevertheless, it’s still interesting to note that Chinese podcasts started out at the same time as the English podcasts and that Chinese podcasters faced the same problems as English podcasters. They needed to find a server host themselves. They needed to make their own RSS feeds. Later, they also needed to submit to Apple in order to make their programs accessible on iTunes.

And then, around 2012, some big audio platforms like Ximalaya FM were established. In China, the role that audio platforms play is something that I don’t think is yet present in the Western world. In the U.S., hosting services, program distributors, and RSS subscriber applications for users are completely separated. But in China, audio platforms like Ximalaya FM have combined all the services together, which makes it more like an audio YouTube.

Of course, even in the presence of such a service, you can still choose to find your own server, make your own RSS feeds, and let your podcast appear online. But in practice, this still requires a certain technical knowledge. Not every podcaster can successfully complete this series of operations. More importantly, in China, one has to go through a cumbersome approval process in order to legally build websites and servers. It needs to be approved by the local public security organs and the Internet administration. If not, you have to use overseas servers, which always comes with the risk of being blocked by the Great Firewall, meaning that your audience can’t play any of your programs. So choosing an audio platform that is easy to use and provides a “one-stop” service is a good choice for most podcasters.

But a one-stop service still has unpleasantness. For example, these audio platforms will insert commercials in the programs you upload, but they may not share the profits with podcasters — like what YouTube does to their uploaders. And of course, your program may be deleted by the audio platforms due to censorship. Some podcasters endure all this for the sake of convenience, while some who are not able to compromise re-select their own server to host their own programs.

Chinese consumers are more used to listening to on-demand audio content on these big audio platforms, so if you don’t distribute through them, you are giving up an easy opportunity to reach a wider audience. Also, because the market is dominated by a few audio platforms, they naturally have a larger say in how the entire audio market is shaped. The most obvious example would be that audio platforms can decide what programs will be recommended. In fact, in China, the audio platforms also produce programs — and Pay for Knowledge content is one type of this — just like what Luminary is doing now.

Although there is a lot of third-party content on the app, most of the attention given by the platform will be on the exclusive content that it produces itself. The plight of Chinese podcasting is like what you might get if you’d had a successful Luminary since 2012. Which raises an interesting question: If Luminary has appeared then and Spotify has started to focus a lot on podcasting before Serial, what would the U.S. podcasting market look like today? In my opinion, many of the concerns from the U.S. podcast community on the power of the platform mentioned in Hot Pod have similarly plagued the Chinese podcast community for a long time. In this regard, U.S. podcasting at this moment may resonate with us.

In my understanding, the Western podcasting world has always inherited the spirit of “Web 2.0” — free, openness, shared cyberspace, etc. — which is often described as the “decentralization” of the Internet. That is to say, there is no powerful platform that controls the open podcasting environment. China’s audio market has been platform-centric since services like Ximalaya FM formed in 2012, meaning that the platforms’ preference decides what kind of programs can get recommended opportunities and their development strategy determines what kind of business model can get more support. Those development strategies have driven the market. A few years ago, these major audio platforms found that simply providing podcasters with hosting services — and then relying on user-generated content to draw traffic in exchange for advertising — would not work. (Generally speaking, audio is still far less popular than video here.) So they tried new business models, with the Pay for Knowledge model being one of the successes. But what is less well known is that, although Ximalaya FM is known for its Pay for Knowledge business built on subscriptions, it’s also China’s largest audiobook distributor. It has the authorization of 70 percent of China’s audiobook copyright holders and thus is close to a monopoly on audiobook sales. Which means that Ximalaya FM is not only the “YouTube of audio” here in China — it’s also China’s Audible.

In many people’s mind, the difference between “podcast” and “audio” is not clear. This is why when many people say “the Chinese audio market is booming,” they are likely to think of Pay for Knowledge, audiobook, or other kinds of audio content instead of podcasts. In the U.S., it has become a market consensus to treat “podcasts” alone as a medium. The mix-up in China, however, will also affect the development of podcasts. It will make the market here unable to see the value of podcasting.

Hot Pod: How would you describe the production culture in Chinese podcasting?

Yi Yang: If I were to describe it using one phrase, I’d probably say “amateur production.”

You may have just heard about Gushi FM (Story FM) from a New York Times story about Chinese podcasting, but programs like Gushi FM that are actually produced by professional production teams are rare among Chinese podcasts. In fact, most Chinese podcasters don’t have any experience in media or audio production before starting their own podcasts, and producers or hosts also regard podcasts as sideline or hobby. Most of them have a full-time job and only make podcasts in their spare time, such as the weekends, because podcasts can’t bring them stable income. These limitations make many Chinese podcasts still sound like the very early audio-blogging, and regular updates and sustainable operations remain challenging.

I think you can describe most amateur productions in China as follows: They are homogeneous in format — most are in the “ChatCast” format, which is the one-man show or talk show — and they are often diversified based on subject matter. Although many podcast producers lack media experience, they are often experts in a field, so their shows will be built around that expertise. Take Museelogue (博物志), a program I really like, for example. The theme of this podcast is museums; Wan Ying, its host and producer, graduated from a Canadian college with a degree in museology. She has been running this podcast with her partners since 2016. In the past three years, their consistent production has attracted a group of very loyal fans and formed a community. Currently, the show is relying on donations from listeners to maintain operations. In addition, there are podcasts such as Anyway.FM (设计杂谈), which is about the field of user interface design, and The Unemployable (无业游民), which is about the freelance crowd. Both target niche markets, or specific content verticals (内容垂直).

I think the dominance of the homogeneous chat format has a lot to do with that lack of experienced audio producers in the Chinese podcasting. And I think that may be related to the historical development of radio in China.

After the Cultural Revolution, China’s radio stations began to undergo reforms in the mid-1980s. Radio stations in south China, which are close to Hong Kong, took the lead on this. They learned live broadcasting from Hong Kong’s radio stations. The hosts no longer need to record the programs in accordance with the pre-approved manuscripts as before. Instead, there was an opportunity to freely combine content in a two- to three-hour slot — to play music, news bulletins, traffic information and weather forecasts, and to talk more like ordinary people. They also allowed listeners to participate in call-in programs.

Although China’s radio stations are state-owned, they turned to commercial advertising for funding instead of government funds during the mid-1980s to the mid-1990s. China has never built a public broadcasting system like the NPR or the BBC, so radio stations need to bear their own profits and losses. In that structure, commercial success is the top priority, and the talk show format has great commercial value for radio stations. It almost costs nothing on production, except the hosts’ salaries, but the income is very impressive. For example, a pop music radio channel in Shanghai, could earn over 100 million Renminbi yuan (about US$14 million) a year during early rush-hours.

In such an environment, radio stations have little incentive to make programs that cost more or require more manpower and time to produce. Of course, from a business perspective, there’s nothing wrong with this, but I think it’s led to where we are right now: producers from China’s radio stations have almost no experience in making storytelling programs at all.

Hot Pod: Where do you think Chinese podcasting is heading?

Yi Yang: It’s hard to do comprehensive podcast market research here in China. As I mentioned earlier, podcasts and other audio content are mostly concentrated on a few major audio platforms, and the competition between them is fierce, which makes the data in their hands a very valuable asset. Plus none of them are listed companies, so these platforms are not obligated to disclose data to the public. If a consulting firm wants to do a survey, it has to work with the audio platforms to get the data they need. This will make the research itself show a certain bias that fails to capture the holistic picture of the market.

Podcasts in China are far from mainstream. Most remain small, and the limited scale of the existing audience makes it hard to catch advertisers’ attention. What caused this situation are the problems I mentioned in the previous answers. For example, most of the existing podcasts are amateur productions, which makes the frequency of the program unstable and the quality of the program not as sophisticated as other media such as video. This makes advertisers hesitate when weighing the medium in which the ad is placed. On the other hand, in the absence of advertising revenue, podcasters can’t treat podcasting as a profession, since it can’t bring stable incomes, which in turn keeps it as a sideline. In the end, it’s impossible to bring the level of podcast production from amateur to professional. This has also caused the podcast industry to fall into a downward circle.

From the view of audio platforms, they rely on the revenue generated by Pay for Knowledge or subscribers, so they will continue to invest in the production of their own contents. The audio platform doesn’t seem to have a reason to generously share these revenues with podcasters in order to improve the quality of podcasts. Objectively, it is harder for podcasts to compete against Pay for Knowledge.

The current Chinese podcasting market is more like the situation of the U.S. podcasting market before the emergence of Serial: Podcast fans existed, but the industry failed to either attract widespread public attention or have the market notice its potential commercial value. The commercialization of Chinese podcasting is still in chaos.

When will Chinese podcasting have its Serial moment? Or if there is no hit show as a trigger, then what other opportunities will bring money or even investor interest into this market? There is still no clear answer.

From my point of view, one action that can be taken right now is to prepare podcasts for high-quality production. I believe only production quality improvement will usher in China’s Serial moment as soon as possible.

My outlook is still quite optimistic. On the one hand, the potential comes from China’s huge market, as well as the continuous increase in per capita income and consumption power of residents, which creates great possibilities for consumption for entertainment purposes. And, of course, more and more of them have started to listen. On the other hand, I see that more and more people are paying attention to Chinese podcasting, which will encourage various forces to tap into the commercial potential; the podcast industry itself is also taking action to change itself, specialized and industrialized.

Yi Yang can be found on Twitter here, and if you read the language, you can find the JustPod newsletter here. You can also reach out to him over email should you have any followups.

Tracking

Release notes

  • Crooked Media has a new narrative nonfiction series: This Land, hosted by Rebecca Nagle, about “two crimes nearly two centuries apart provide the backbone to an upcoming 2019 Supreme Court decision that will determine the fate of five tribes and nearly half the land in Oklahoma.”
  • Dan Weissman’s Arm and A Leg is coming back for a new season on June 4, with a brand new co-production partner, Kaiser Health News.
  • Pushkin Industries’ latest project, out June 5, is called Solvable. Worth noting: the show is being developed in collaboration with the Rockefeller Foundation.
  • I have another preview piece out for Vulture. Check it.

Photo of a woman with earbuds in on a Qingdao street by Gauthier Delecroix used under a Creative Commons license.

POSTED     May 28, 2019, 10:52 a.m.
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