“Radio is more like a Super Bowl commercial: phenomenal reach, but very shallow engagement. A podcast is the opposite of that: you might have only 1,000 listeners, but they will likely be really devoted and engaged. It’s analogous to music fans who buy every album and VIP tickets to every show for their favorite bands.” – Matt Carter, co-founder of music podcast network Jabberjaw Media.
The leading podcast publisher in the United States, National Public Radio (NPR), started 2017 with a unique monthly audience of 8.82 million. And according to data from Statista, an incredible 25% of surveyed Americans say they’ve listened to a podcast in the past month, up from less than 10% in 2008. Clearly, interest in podcasts is exploding. But does this medium pose a threat to traditional radio?
Although the podcast market has grown massively over the past ten years, it can be viewed as a complement to traditional radio, not a threat. And while its reach continues to expand, the average American still devotes 54% of their audio consumption time to radio and only 2% to podcasts, thereby illustrating the dominance of the traditional medium. However, interest in podcasts is rising substantially, which provides a new world of opportunities for advertisers, artists, and record labels to reach fans and consumers in highly targeted arenas.
According to Edison and Triton Digital’s annual Infinite Dial report, there were 67 million U.S. monthly podcast listeners in 2017, which is up a remarkable 21% from 57 million the previous year. As the popularity of podcasts rapidly increases, the industry’s advertising potential rises exponentially. Data from Statista indicates podcast ad spending in the U.S. growing from $43 million in 2010 to $207 million in 2017, with projections of reaching $318 million in 2019.
With numbers like these, it’s no surprise that the music industry is starting to take podcasts seriously, with many big players diving in. Spotify was one of the early entrants into programmatic audio, and the company is now setting its sights on becoming a popular destination for podcast listeners. One of the many advantages of programmatic audio is its data-enabled automation, which can help with transactions. Spotify is now starting to monetize some of its original podcasts and states that the interest from agencies and brands is snowballing.
Apple is making major waves by launching its live analytics functionality. In December of last year, the company rolled out its in-episode podcast analytics feature, which enables publishers to learn precisely what percentages of their episodes are being consumed via the Apple Podcast app. Although it’s still listed as being in its beta phase, this feature marks a major advancement in the podcast industry.
Subcast is another company working on innovative advancements with the aim to bridge podcast publishers and the smart speaker user base. The concept is to determine the point that exists between the on-demand nature of podcasts and the linear nature of traditional radio and to subsequently control the content for this voice-first environment. Although the company is in its early stages, it’s working diligently to carve out a place in this new market by developing a technically-complex playlist that becomes the atomic unit of the smart speaker audio experience.
Some marketing experts are comparing podcasting to the golden age of radio. And the statistics about this medium’s growth cannot be denied. Monetizing podcasts through data and intelligent analytics may be one of the most significant new frontiers facing the music industry, carrying the potential to expand reach and dramatically increase revenue.