100 years after the birth of radio, podcasting is one of the main innovations related to audio. Radio on demand, audio on demand or whatever you call it, the ability to listen to content on almost any topic, on any device and whenever you want, is the great revolution in radio content. Time and technology are changing, but listening to voice is still a rewarding experience.
Podcasting is the FM of 2020
The evolution of radio and its continued resistance to technological advances are closely linked to its artistic and thematic renewal to meet these challenges. This is what happened with television in the 1960s: radio became early-morning, informative and adapted to be a secondary means of support. The appearance of transistorised devices – such as the famous Spica- has also transformed the medium into an ubiquitous consumption, for any work or travel situation.
The consolidation of FM as a technology in the 1970s was the last great artistic renewal and also stemmed from technological developments: more segmented programmes, content for young people, other ways of communicating and creating content appeared. AM was and is generalist radio, FM was and is custom radio. Thirty years later, podcasting is emerging as the new FM, but even more personalised. Content that do not appear elsewhere, and which adapts to the new needs of listeners, and gives rise to new voices is broadcasted.
Year after year, more and more productions and listeners are joining a phenomenon that, in the world, began almost at the turn of the millennium. Between 2002 and 2004, different radio producers began to explore the possibility of combining RSS technology (content aggregation), MP3 as an audio compression format and the Internet as a content distribution platform to create the first podcasts. Initially, these were radio programmes that were converted into digital files to reach new audiences. Adam Curry, Christopher Lydon, Dave Winer and Ben Hammersley are some of the key names in this story. Since then, the podcast world has grown.
One of the main features of podcasting is that it puts the user/listener at the centre of the stage: it revolutionises the traditional model of linear radio to make it storable. With platforms such as Netflix, Amazon and Spotify, radio content can also be listened to on demand. You can find original or exclusive podcasts and also others that are versions of traditionally broadcast radio programmes.
The Golden Age of Podcasting in the USA
The Mecca of podcasting remains the United States. The advent of podcasting dates back to 2014 when This American Life and NPR’s public broadcaster WBEZ in Chicago produced the first mass success demonstrating the power of podcasting: Serial. This journalistic documentary podcast tells the story of various police cases over three seasons and has been listened to hundreds of millions of times. From then on, public radio played a transcendental role. As part of this process, within a few years, major successful production companies were created: Wondery, Panoply, Cadence 13, Gimlet, Parcast…
Traditional media have also been fundamental in publicising the format. The New York Times, the Guardian, the BBC, iHeartRadio, the Washington Post, ESPN are at the top of the list of those who have embarked on the production of podcasts. As a result, the audience has increased, the advertising market has developed and productions have become more professional. Until 2018, when everything has changed.
When you look now at the amount of time people spend consuming audio in the United States, it is the same amount of time they spend watching videos. But the audio industry gets one-tenth of the revenue from video.
2018, in the USA, was the year that podcasting became a real business. The hundreds of millions of dollars invested by Spotify (which has already spent nearly a billion dollars to position itself as the world’s leading audio platform), the emergence of Google’s exclusive platform, the 100 million dollars raised by Luminary for its launch and the more than a billion dollars invested by various companies in platform purchasing and production operations show the volume of business that has increased at a dizzying rate since 2018. This has led to the generation of podcasts for exclusive consumption on different platforms and the creation of small “closed islands” or “platforming”.
The situation of podcasting in Europe
The podcast sector in Europe is evolving in very different ways. The podcasting market in Europe evolves very differently from that of the United States. This is evidenced by the Danish-based start-up Podimo, which recently completed a €15 million financing round to expand its service in Europe. Podimo’s trajectory points to a market where paid subscriptions will play a much more important role in podcasting than advertising.
Podimo operates a paid subscription podcasting service – ‘a Netflix of podcasts’ – which is similar to that of Luminary in the United States. For €5 per month, Podimo provides access to exclusive podcasts as well as free podcasts. But while Luminary has spent tens of millions of dollars to offer exclusive podcasts from a few dozen major producers and celebrities, Podimo uses hundreds of lesser-known podcasters – more than 400 at present – and pays them a share of the revenue generated. None of these podcasts contain advertising.
The podcasting market in Europe is very different from that in the United States, and factors that contributed to Podimo’s promising start do not exist here.
American podcasters believe that they will be able to monetise their podcasts with advertising revenue if they wish. But this is not the case in Europe. The advertising market for podcasts in Europe is smaller, even though Europe’s population is about double that of the USA (even without the UK). Figures from a study carried out in 2019 by the Interactive Advertising Bureau and PwC show that advertising spending on podcasting in Europe amounted to $43 million, compared with more than $600 million in the United States; and the study predicts that it will only reach $232 million by 2023, compared with about $1.5 billion in the United States.
If advertising for podcasting is so low in Europe, it is because there is no infrastructure to deliver it. There is no European equivalent of iHeartRadio or NPR in the US. These two entities publish dozens of podcasts each, which collectively dominate listener ratings. Both rely primarily on advertising and sponsorship revenues, and both rely on their large existing advertising and sponsorship sales organisations to generate these revenues. The size and reach of both of these businesses means that popular podcasts are expected to carry advertising and, as a result, podcast advertising is the predominant monetization model.
One of the reasons for the lack of advertising infrastructure for podcasts is that Europe is made up of more than three dozen countries speaking as many different languages. All this could change as Google has announced an Audio Mixer, which offers audio advertising to help businesses take advantage of the growing consumption of podcasts, digital radio and other forms of digital audio. There is a demand for podcasts in local languages, but this limits the audience – and therefore advertising revenue – for podcasts It is therefore logical that the main European markets for podcasts, in terms of the percentage of the population that listens to them, should be countries whose languages are most widely spoken around the world: according to December 2018 figures from ARM and the Reuters Institute for the Study of Journalism, the main countries are Spain, Ireland, France and the Nordic countries (where English is highly proficient).
Podimo’s strategy is to focus on individual countries and on podcasts in their mother tongue and to this end it is setting up organisations in country after country. It has found that more than 80% of podcast consumption in Europe is in local languages, with the percentage being even higher in countries where English is less common.
The conventional wisdom in recent years is that Europe is lagging behind America in the adoption of podcasting and that monetisation models are therefore still highly variable. But penetration figures suggest otherwise, as several European countries have proportionally as many – or more – podcast listeners as the United States.
In the absence of large established media companies willing to adapt their models to podcasting across the continent, it seems that start-ups like Podimo may be more successful than their American counterparts, and thus paid subscription podcasting services have a bright future in Europe.
Podcasts are therefore extremely attractive because they are intimate and give listeners the illusion of having privileged access to the speaker.
Podcasts have been around for more than a decade, but in the last 24 months or so they have become very popular and have attracted the attention of market-savvy digital marketers.
As a result, demand for podcasts is growing strongly around the world, and new models are emerging. Take advantage of these new opportunities and reach new customers with Lenseup.