It’s Not a Bubble, It’s a Business

We all know the business cycle. A yogurt place is successful, so 5 more open up nearby. Procedural TV shows like CSI are popular, so there is one every night. Publishers have success on Facebook, so everyone piles on. Then the reckoning. 5 local yogurt places are not sustainable. So one by one they disappear. Facebook changes the algorithm, and you know that story.

The recent podcast related announcements from Buzzfeed, Panoply, iHeart, Vox and Audible feel similar. A few big hits and everyone spins up a bunch of podcasts. Then the hard part. Who is going to listen to all of this stuff? Can the content be sustained? How will it be found? How will it be monetized?

Doing great content is hard. Finding an audience is hard.

Audible seemed to have trouble finding an audience. Content was difficult to locate buried in the “channels” section of their app. Curiously, they chose not call them podcasts. Even when the content was made available free to Prime customers, it didn’t appear to garner enough traction. Panoply has said they will now focus on technology and ad serving for the podcast community after a substantial investment in content: “Content is hard to scale.” True that. And significantly their parent company, Slate continues with a successful and active podcast portfolio. Podcasting felt like a side hustle at Buzzfeed amidst a lot of other fast moving initiatives. Much of the content never found an audience. With balance sheet shortfalls at Buzzfeed, so it goes. On the other side of the spectrum, Vox announced more titles and iHeart picked up a premium content creator and sales arm to augment their growing on-demand portfolio.

Is it a bubble, or the growing pains and natural order of a newish business?

Here are as few good reminders about where we are with podcasting:

Creating good content is hard - Anyone can start a podcast. Creating something unique and sustainable with a fresh voice is far more challenging. We ran a blog post a few weeks ago pointing out that only about 25% of the 550,000 podcast titles are still in production. Some finished their runs, but most were abandoned. No matter the medium - TV, video, radio, movies - creating compelling and durable content is daunting.

Finding an audience is hard– Who’s got time to listen to all of this stuff? We did focus groups last year and not surprisingly, people reported that 70% of their downloaded content was never listened to. Great intentions, but life gets in the way. Podcasts are lean-forward. It’s not the type of audio (music) that plays in the background.

If the average podcast listener only listens to about 7 in a week, with so many titles and millions of episodes to choose from, consider the odds

If the average podcast listener only listens to about 7 in a week, with so many titles and millions of episodes to choose from, consider the odds. No wonder the mortality rate is so high.

Getting on to someone’s short list is challenging.

Finding podcasts is hard- We hear this over and over --- casual adopters, ardent fans and newbies just discovering they have a purple Podcasts app, all report the challenge of discovery.

Monetization is hard – Podcasting is a baby business. An 8 person show staff is far too ambitious for most. Certainly good content is not cheap but a big staff feels out of reach. Organic growth makes sense for most creators and underwriters.

No one has a firm grasp on the alchemy for creating a hit

There is a lot of poor quality content out there that will perish.

If that’s the bubble, so be it.

Nobody said this would be easy or without bumps. But the trajectory is still clear:

Audio listening is on the rise.
People like selecting the time and device of their choosing to listen to content.

That feels like a great formula for growth.

Having been involved with content development for a long time, I can tell you with surety that no one has a firm grasp on the alchemy for creating a hit. 60% of the TV shows created by the big 4 TV networks last year ended in cancellation (including one about podcasting). For podcast creators hoping not to get trapped in a “bubble,” as you plan your next project, keep in mind, there are an awful lot of crime podcasts out there right now.

Maybe that’s just another yogurt shop.