Have podcasts sold out?
They used to be the Wild West, DIY and free for all, but now the big boys have arrived and theyre pushing us to pay. Heres how podcasts went from punk to mega bucks
All you need to make it in podcasting is an idea, a laptop and a microphone. At least, thats been the received wisdom since the medium began its current boom six or seven years ago: its an inherently amateur, democratised means of communication, with the vast majority available for free.
But is all that changing? Last week saw the launch of Luminary, a podcast platform with $100m of venture capital funding behind it, and deals already signed with Malcolm Gladwell, Lena Dunham, Trevor Noah and Conan OBrien. The big boys have arrived, and their podcasts arent going to try and eke out profit by running ads for mattresses, beer clubs or build-your-own websites. We want to become synonymous with podcasting in the same way Netflix has become synonymous with streaming, Luminary chief executive Matt Sacks said, explaining that the service would paywall its best content and charge users an $8 monthly subscription to unlock it.
This follows Spotifys decision to intensify its shift into speech-based audio by purchasing Gimlet Media, the studio responsible for Crimetown, Reply All, StartUp and various other hit podcasts, reportedly for more than $200m. The streaming giant has also signed the likes of Amy Schumer to produce exclusive podcast content.
Spotify has an advantage here that isnt just about its spending power. Its customers are already over the hump of agreeing to pay for content, because theyve done it to listen to music without adverts. Yet the people backing Luminary clearly think paid-for podcasts are the coming thing.
The Chinese podcast market is driven by paid-for subscriptions, so we know it can work, says James Cridland, editor of podcasting newsletter Podnews and a former BBC and Virgin Radio executive. But its a big shift for Western podcast listeners, who have been used to free content, to have to start paying.
Its a further indication of the Wild West nature of podcasting, says Steve Ackerman, MD of radio and podcast production house Somethin Else. There are lots of different models being tried out and youd be a brave man to bet which ones going to succeed. Ackerman points out that one of his clients already operates on the paywall model: Audible, which was purchased for $300m by Amazon in 2008, is best known for audiobooks but increasingly focuses on podcasts, dramas and other subscriber-only content.
The longterm success of Luminary, Audible and other paywalled ventures will obviously depend on convincing consumers to pay. The flipside of that is whether the currently dominant business model, of podcasts available at no charge but which include adverts, can sustain itself.
Theres every indication it can. Whereas digital journalism has struggled to convince readers to click on ads or even to not use ad-blockers to avoid them altogether, podcast listeners are receptive to sponsor messages. Skipping ads is as easy as tapping the button in the app that springs the audio forward by 15 or 30 seconds, but research last month by Business Insider found that most listeners dont do that; a 2017 Canadian survey by Statista put the figure for podcast fans who dont skip ads as high as 77%.