Everything is just booming and perfect in podcasting, right?
Audience and downloads for many leading podcasts and networks have grown 25–50% this year — again. The infusion of capital into the industry hit record highs. With creators entering the space every week, new exciting content is emerging. These are all great signs for the medium, aren’t they?
Things are certainly exciting and evolving quickly. But podcasting, as an industry, is starting to recognize and address some new emerging systemic problems that will become growing concerns over the next few years — problems that public radio has been working on with a decades-long head start. And public radio has a unique opportunity to lead, innovate and win — if it wants to.
Here are three key areas to focus on:
1. Need for diverse revenue
Podcasting is predicted to generate more than $650 million in advertising revenue this year, which is a staggering nearly 20-fold increase from when people started to track ad sales about six years ago. Some view this as thrilling; others grumble and compare it to radio’s nearly $19 billion in revenue. Regardless of how you see it, with this rapid growth the podcasting industry has become too reliant on advertising revenue.
Actually, I’m concerned that podcasting has become too reliant on one source of revenue. In addition to being foolishly imprudent, overdependence on one source of revenue also creates a risk-averse culture of sameness and an artificial ceiling for ambition.
Broadcast network TV is a great example of this. Its complete dependence on one source of revenue — ad dollars — sapped network TV of almost any sense of innovation and enterprise. Network TV competitors, including subscription video-on-demand services, basic cable and premium channels, run circles around the broadcast networks for new concepts and talent.
Public radio dealt with this problem decades ago and began developing multiple revenue streams simultaneously. Its early leaders realized that government and licensee revenues would never be enough to fuel the system’s growth. They looked elsewhere for other funding sources, namely listener support and underwriting revenues. These diverse revenue streams, which now include growing income from digital sponsorships, help ensure that public radio stations and producers can survive the inevitable ebbs and flows of any one source of revenue.
Having never experienced an economic downturn, podcasting hasn’t learned this lesson yet. At this early stage of its evolution, it’s not a question of if the podcast advertising market goes soft, but when it will go soft.
What will happen when the ad market softens? A lot of podcasters will scramble — and some won’t be able to scramble fast enough.
This summer author and podcaster Tim Ferriss announced a six-month test to develop listener support for his uber-successful podcast. He dropped all ads from his show and asked listeners to sign up for monthly donations.
The experiment lasted less than six weeks. In shutting it down, he claimed his audience was overwhelmingly against the ad-free/listener supported trial.
Ferris relied on blog comments and Twitter posts to reach this conclusion. Researchers tell us this is a very dangerous way to understand audience behavior — but that’s a different article for another day. With donation levels starting at $9.95 per month, it’s very likely that the price of entry-level subscriptions was too high. There was no way for a listener to commit to a lower monthly fee or make a smaller, one-time gift. This was a “lesson learned the hard way” that most public radio development experts would have known to avoid. Many YouTubers have figured this out already and built cottage-industry empires on monthly donations of $1 and $2.
Despite the destined-to-fail nature of Tim’s experiment, it was a praiseworthy attempt to try something different. Failure is often a productive exercise for determining what will work. Experimenting with revenue different sources is exactly what podcasters can and should be doing.
Yet even with such nascent attempts to raise funds directly from podcast listeners, the strategy and thought that has gone into these efforts to date have been thin.
Public radio is well suited to lead the way as an innovator and example for others. In good, healthy boom times, it’s important to experiment with building other revenue streams for income. It helps prepare for that day when one stream goes soft and you’ll need others to sustain you and fuel your growth. While many podcasters are feeling around in the dark on this, public radio has 50-plus years of scrounging for revenue wherever it can be found.
That experience gives you a head start against the rest of podcasting’s early attempts.
2. Lack of innovation in storytelling
There are more than 2,000 new podcasts every week. At this rate, by the time you finish reading this, there will be three new podcasts that weren’t available when you started reading. Despite the volume, frankly, a lot of it sounds the same.
Podcasting has two content problems. First, there are a lot of slight variations on form. Eventually the world will run out of unsolved murders to revisit or comedians to chat with each other on podcast roundtables. Producers will have to look for more enterprising formats.
Second, it has been too long since the podcasting industry had a major hit. There have been many successful podcasts, but think how much time has passed since any podcast captured mainstream attention in the way that Serial, Finding Richard Simmons or S-Town did. The Daily, arguably podcasting’s latest mega-hit, is almost three years old.
The constraints and ceiling created by single-revenue sourcing exacerbates sameness and a lack of risk-taking and innovation.
For years, many in public radio expected the recurrent industry theme of “haves” and “have-nots” to apply to podcasting as well — meaning that the “major players” (networks and major stations) would be very successful in podcasting while others struggled to claim a place at the table.
It surprises and delights me that some of the most enterprising public radio podcasting content is from unexpected players, including New Hampshire Public Radio’s Bear Brook, WABE’s Bottom of the Map and Michigan Radio’s Believed. There is no reason this trend can’t continue. But wouldn’t it be great to see networks and major stations take some new risks and innovate?
This isn’t a conversation about download counts. Public radio still dominates listings of “most downloaded” podcasts — but, come to think of it, how long have those titles been around? Most are at least four years old, and many are much older. Almost all the podcasts on that list that aren’t from public radio producers are younger. The success of these new titles indicates “health” in addition to “wealth” for the organizations that produce them.
Satisfying this hunger for surprising and new content poses a great opportunity for public radio. It has a nationwide corps of producers who have ideas and relationships with talent that won’t surface through traditional channels in New York, D.C. or Los Angeles. But public radio’s real secret strength is its long track record of creating content that’s focused on mission, rather than revenue potential. Its core programming has been built under the guiding principle of creating content that is exceptional by design, rather than simply attractive to advertisers.
Unquestionably, future growth in podcasting will come from new content forms and innovation. Beyond those who listen today, how many more listeners are there for true crime podcasts? Probably not all that many. But true crime stories sell ads, so those are what get a green light.
While podcasters will struggle with the downward spiral of revenue-centric content choices, public radio’s long history of audience-centric content provides the solution.
If you want inspiration on this, review Lyndon Johnson’s comments on the signing of the Public Broadcasting Act of 1967 or E.B. White’s vision for public broadcasting as expressed to the Carnegie Commission. Apply those same ideals to podcasting: eloquence over acceptability, or, as E.B. White said, content that “should arouse our dreams, satisfy our hunger for beauty, take us on journeys, enable us to participate in events, present great drama and music, explore the sea and the sky and the woods and the hills.”
3. Creating listener value
The biggest source of my professional frustration these days is when I hear talent and producers describe success in podcasting as creating really good-sounding audio files that people listen to. That’s actually wrong.
I felt the same frustration when I worked in public radio. On-air talent and staff would make similar observations.
The job isn’t to sound “good” or even to create good things — the job is to create value with content that listeners value and support, and would miss if it went away.
Public radio has spent decades honing its understanding of value economics. By creating value through programming that listeners care about, you are creating a mutually beneficial relationship with the audience. It is an authentic bond forged by supporting each other. You provide information, stories and entertainment that they value. They support you, financially and otherwise.
Many podcasters continue to believe the pathway to success is the act of doing the podcast, rather than making something of value. Ask every successful podcaster and they will tell you that their success doesn’t lie in the work itself, but in the community that grew around it. Successful podcasts become the hub of a community of people. They’re connected not only by the act of listening, but because they care about a certain issue, subject or perspective.
Historically, all radio broadcasters served this role. Over the past two decades, while most commercial broadcasters abandoned their roles as community hubs, public radio has grown and expanded on the idea of community connection. Remember when it used to be cool to wear a T-shirt or display a bumper sticker for your favorite commercial station? When was the last time you saw that? Public radio listeners still wear the shirts, they still apply the bumper sticker, and — yes — they still carry the tote bags. You will start to notice more and more of this “badging” occur with podcasts (if you haven’t already).
The point here isn’t about tote bags and T-shirts — it is about the relationships that create connections. Public radio leads this space now. Many podcasters who are trying to build relationships with communities of listeners have public radio roots or are quite open about taking inspiration from public radio’s connections to its audience.
With its decades-long understanding of how to nurture a relationship with listeners, public radio has an advantage to win this race while podcasters scramble to catch up.
The more things change…
One of my worries is that public radio will lose itself in the exciting evolution of podcasting. When I talk to many of the people involved in public radio’s podcasting efforts, I hear lots about CPM rates and dynamic ad insertion technology. I don’t hear much about mission and public service.
The explosion of podcasting over the last five years may seem like something new, but in more ways than not, it really isn’t. The core values of public radio’s programming and its relationship to the audience is completely unchanged, though the means of distribution has changed.
Lately, when I’m lucky enough to have a happy-hour conversation with former public radio colleagues, I’ve been asking them: If the Public Broadcasting Act expired after 50 years and needed to be completely rethought for today’s media landscape, how would it be different? What would continue? What would go away?
When I read the Carnegie Commission’s founding documents and the legislation that came from it, I see a lot of similarities to today’s media landscape. There are more media choices today than ever — but are they good? Do they serve the public interest? Do they allow us to, as E.B. White said, “climb the staircase”?
The great news is there is a massive opportunity — right now — for public radio to have its cake and eat it too. You can find ways to monetize the content you create, while also taking a fresh look at the ideals that forged the industry and applying them to the digital age.
In the exciting and increasingly commercialized podcast boom, public radio’s path won’t be forged by just following what everyone else does. Your essential role is to double down on mission. Stations don’t need a permission slip to do this. The only gatekeeper is a lack of ambition.
This is a moment to apply the industry’s core principles and strengths to the new medium, in the ways that only public radio can do.
Eric Nuzum is a former public radio programmer and strategist who spent more than 20 years working at stations and NPR. He is the co-founder of Magnificent Noise, a production and creative consulting company in New York City. His new book on podcasting and audio creation, Make Noise, is available now.