If you know me, you know I LOVE podcasts. I’m like a kid on Christmas just waiting to unwrap her presents when a new episode drops from one of my favorites each week. I started listening in early 2014 when a friend of mine launched a show centered around girl talk. Around the same time, Serial was becoming popular and I needed to understand how in the world Adnan managed to get himself in that entire predicament in the first place. From there, my appetite kept growing. I primarily subscribed to shows recommended by friends focused on subjects like hip-hop, media, tech, entrepreneurship, leadership, and the all-encompassing, nebulous, “life.”
Today, I subscribe to about 20 podcasts and I know at least four people in my extended network who have their own podcast or are in the process of launching one in the near future. Being the nerd that I am, the emergence of podcasts among my peers piqued my curiosity, and convinced me that if the medium was on the rise on a micro level, the same had to be true on a macro level as well. I went in search of the bigger picture and dug up some really interesting research that points to podcasts as a bubbling market opportunity for creators, entrepreneurs, advertisers, and investors. I summed up the trends and my thoughts below.
Who listens to podcasts (besides me and my cool friends)?
According to The Podcast Consumer 2016 published by Edison Research:
educated, affluent, millennial males.
- 56% are men
- 38% are 18-34 (34% are 35-54)
- 41% have a household income above $75k
- 51% have a four-year college degree, some grad school or an advanced degree
Growth is good, but how fast?
Growth in the awareness of podcasts jumped 12% in 2016, the largest jump since 2009 when awareness increased by 16% from the previous year. Additionally, monthly podcast listening increased 24% in 2016 and 75% since 2013. Weekly podcast listening increased 30% in 2016 and 86% since 2013. Of the people who listen to podcasts weekly, 79% of them listen to five or fewer per week. On top of that, podcast advertising revenue had been rising at annual rates of 20%, but in 2015, that rate more than doubled to 48%. To top it all off, ad sales totaled $167m in 2016 and are estimated to grow 24%, reaching $207m in 2017.
The devices being used to listen to podcasts are shifting quickly. In 2016, 71% of people listening to podcasts used a smartphone, tablet, or other portable device. In 2013, that number was only 42% and the rest accessed podcasts through computers. People mostly listen to podcasts at home (53%) and in the car (21%).
What it all means: The industry is expanding quickly, but there is still plenty of room to grow. We live in the age of on-demand binge consumption. Netflix, Hulu, Spotify, Apple Music et al. truly ushered in a new era of behavior and podcasts fit right in It makes perfect sense why more and more people are being drawn to the medium. Looking forward, three things stand in the way of mass adoption and consumption:
- Growth in mobile device ownership and adoption. We’re sure to see an increase in podcast listening well into the future as mobile phones and portable internet-enabled devices continue increasing in ubiquity. Gone are the days when people needed an iPod, or needed to be at a computer to listen. Additionally, with the impending rise of connected cars and smart devices like the Amazon Echo and Google Home, podcasts will become even easier for less tech savvy consumers to access at existing points of popular consumption, setting the stage for continued growth in podcast listeners and increased listening habits among current listeners. It’s simple: people tend to adopt things more quickly when they are easier to access.
- Discoverability, shareability and searchability. Distribution remains a challenge. In order for mass adoption to occur, and for the total audience to grow beyond the current 58m monthly listeners, not only do podcasts need to be even easier to access, but finding podcasts of interest also needs to be easier. 11% of podcast listeners are 12-17 years old and 17% are 55 and older. There is plenty room for adoption within these age groups, but tapping into them means access to a more comprehensive library and better recommendation tools for similar shows based on my listening habits and interests. Think Spotify Discover Playlists and Apple Music recommendations. Podcast networks like Gimlet, NPR and the Loud Speakers Network are trying to do just that, but there is still a long way to go. Additionally, in today’s social media driven society, a more integrated platform that allows listeners to interact with podcasts, react and share audio snippets or comments at specific moments, would also go a long way in cultivating loyalty, engagement and referrals. Cross-pollination is key. As a podcast listener, I can also say that being able to search audio the audio files for specific words would also go a long way in helping me digest the content and share specific pieces of conversation to friends. Luckily, Popup Archive and Clammr already seem to have a head start on addressing these needs.
- Efficient monetization, measurement and analysis tools. The podcasts I listen to sell native ads to brands targeting the show’s listener demographic. A marketplace that helps pair brands with relevant podcasts is imminent. Art19 already allow podcast hosts to insert ads at optimal points of the show. There is surely more innovation to come to streamline monetization. At one point, I convinced my team to experiment with podcast ads. The problem for us, was that as a very young startup that offers a service (as opposed to a product) we didn’t have the tools in place to measure the impact of said ads. On top of that, concrete dollars saved on a product is a whole lot more of an incentive for new users to “site their source.” Had we been able to digitally track referrals on our end and easily compare that against podcast engagement stats, we might have been more committed to the medium as an effective advertising channel. Anywhere from 60%-65% of podcasts are downloaded through Apple, but the company provides almost no data on engagement. For example, show hosts know how many downloads they get, but not how much of the episode people listen to. This has to change in order for companies large and small to continue cutting more checks and larger checks for ads. Apple is currently asleep at the wheel, but that leaves the door wide open for innovators.
That said, the future is bright for all parties involved: creators, entrepreneurs, investors, and advertisers. I’m so excited to see how the industry develops over the next few years. Now is definitely the time to dive in. Don’t let me say, “I told you so!”
P.S. – Check out a few of my favorite* podcasts below:
- How I Built This – “A podcast about innovators, entrepreneurs, and idealists, and the stories behind the movements they built.” Favorite Episode: Cathy Hughes on Radio One
- And Then You Graduate -“Discussions and interviews on what comes after following all the rules.” Favorite Episode: Marisa Mendez: How to make it in the Radio industry
- BE The Code -“Spotlights on the most influential blacks in technology – from celebrities to financiers – and how they are reshaping the industry, with their unique perspectives.” Favorite Episode: Marlon Nichols, General Partner, Cross Culture Ventures
- Black Girl Podcast – “From the POV of 5 black women in the entertainment industry. Candid, hilarious, painful & raw.” Favorite Episode: Pain
- The Combat Jack Show – “The undisputed #1 HipHop podcast, the Combat Jack Show features interviews with HipHop icons & the most in-depth conversations about music, news, culture & race.” Favorite Episode: The Foxy Brown Episode
- The Series B Show – “Brandon Jones highlights the journeys and ideas of top influencers in tech, business & culture via one-on-one in-depth conversations.” Favorite Episode: From Unpaid Intern to Fashion & Beauty Powerhouse – The Kahlana Barfield Brown Episode – Part 1 & Part 2
- Revisionist History -“Reinterpreting something from the past: an event, a person, an idea. Something overlooked. Something misunderstood.” Favorite Episode: Carlos Doesn’t Remember
- WSJ Media Mix – “Lively analysis, timely insights and in-depth interviews, the covering the fast-changing media and marketing business.” Favorite Episode: Snapchat’s Pre-IPO Ad Sales Offensive
- HBR IdeaCast – “A weekly podcast featuring the leading thinkers in business and management from Harvard Business Review.” Favorite Episode: Negotiating With A Liar
- The Casey Crew -“DJ and radio host DJ Envy and his wife Gia Casey will explore the good, bad, ugly and beauty of relationships and family.” Favorite Episode: Did Chrisette Michele’s Fiancé Agree With Her? A Conversation With Chrisette and Biggs
*Please reserve your judgement. I am dynamic and skilled in the art of code-switching. I frequently indulge in a variety of high and lowbrow interests. Lol.
Anastacia Gordon is a writer, backpacker, and investor interested in music x media x culture x tech. She is currently an MBA student at Columbia Business School and spent summer 2017 as a summer associate at Kapor Capital. Prior to that, she was a founding team member at Jopwell (YC S’15).
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