Podcasting is having a bit of a moment right now. Although video tends to dominate discussion about future media formats, audio has enjoyed a high-profile renaissance in the past 12 months.

In the wake of Serial, the fastest podcast ever to reach 5 million downloads on iTunes, NPR and fellow public radio stations WBEZ and WNYC hosted a “podcast upfront” event in New York earlier this year, where producers and show hosts mingled with fans – and potential advertisers.

The three stations were behind six of the 10 podcasts most downloaded from iTunes in 2014, including Serial, This American Life, Freakonomics Radio and Wait Wait… Don’t Tell Me.

The event aimed to capitalise on the surge of interest in podcasting and turn it into a viable additional revenue stream.

Serial and the audio revival

“Serial really captured public attention in a way that no podcast had done before,” says Bryan Moffett, vice president of National Public Media, which manages sponsorship sales for all NPR and PBS stations.

“It kind of put an exclamation point on a business and an audience that had been growing steadily for many years,” he told TheMediaBriefing. 

According to the latest Edison Research, 17 per cent of Americans surveyed at the start of the year said they had listened to a podcast in the last month, up from nine per cent in 2008.

In the UK, Ofcom does not offer a breakdown of listeners by podcast only, but according to its 2014 Communications Market Report 11 per cent of those surveyed listened to podcasts or on demand radio every week. 

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Podcasts are a key part of NPR’s strategy, representing a wider distribution of public media content. The network produces around 30 regular podcasts, which currently receive 80 million monthly downloads, and executives are understandably keen to develop a business model similar to that operated by radio for many years.

However, advertising on radio and on podcasts are two very separate things, due in part to what Moffett describes as the “intimate connection podcast users have to the content and to the host”.

“This is different even to the connection they have to radio, in a lot of ways because it’s a subscription-based medium,” he explained. “Nobody accidentally subscribes to a podcast and listens to it every week. It’s a very intentional thing.”

Loyal audiences – lessons from Slate

The sentiment is echoed by Andy Bowers, formerly executive producer of Slate’s podcast, now chief content officer at Panoply, a podcast network owned by The Slate Group.  

At a time when many other publishers were scrambling to increase their video output, Slate bucked the trend by focusing its resources around podcasts. While it does a produce original videos, as well as aggregating them from around the web, its emphasis on podcasting has paid off.

The publisher now producers 14 podcast shows which receive more than 6 million downloads a month – an audience which has tripled in just one year.

“There’s a real difference between the audiences you get from video and podcasting,” Bowers told us. “Unless you’re working on a serialised show, video tends to be people who find a particular video for a particular reason… they don’t become regular viewers of a particular series, whereas in podcasting the audiences are incredibly loyal and engaged.”

The rapid growth of Slate’s podcast listenership is largely thanks to its Serial Spoiler Special, a wildly popular weekly show analysing the most recent Serial episode. However, it’s also down to smart new programming such as The Gist, which discusses current events and goes out five days a week.

Monetising opportunities

Like NPR’s podcasts, Slate’s audio shows are monetised through sponsorship, although it also offers the Slate Plus subscription package, which includes print stories and podcasts with bonus material.

While Bowers explains podcast sponsorship does not constitute the lion’s share of revenue for media companies such as Slate, and probably won’t for some time, he said it is still “a reasonable source of revenue”.

“The ad rates are extremely high, the audiences are extremely engaged, and as we go forward I can see it growing quite a bit,” he added.

It’s a similar story over at NPR, where corporate podcast sponsorship makes up less than 10 per cent of overall corporate sponsorship, way behind the network’s primary income from member station fees.

Still, NPR’s podcast revenue more than doubled from the 2014 to 2015 financial year, and also doubled between 2013 and 2014, Moffett told TheMediaBriefing.

Cross-promotion

This slow but steady growth is one of the reasons The Slate Group launched Panoply in February this year. The company also produces podcasts and sells ads for a range of other publishers, including The New York Times, The Huffington Post and Popular Science. 

Although part of the package Panoply offers under its revenue share model is designed to help new podcasts to “hit the ground running,” not all of its production partners need outside help.

The Huffington Post, for example, has been putting out its own podcasts for some time. In this case, the draw is more likely to be the opportunity to be part of a larger network that includes ad sales and cross-promotion.

It’s similar to the arrangement some publishers have with Apple News, which potentially provides an additional source of both income and visibility.

“While publications may compete on the print side, there’s a big benefit right now, simply in that the audience is growing, to collaborating on the podcast side,” said Bowers.

Sponsorship messages – old dog, new tricks

One aspect of podcast sponsorship which also differs from other formats such as video is that the sponsor’s message often comes direct from the show host.

In the past, these sponsorship messages were common in radio shows, but have since re-emerged in podcasts.

One might argue that for podcasts which focus on current events or real-life crime, a high school murder, say, this sort of sponsorship could pose a threat to the credibility of the show or its presenter.

For example, the BBC, NPR’s nearest public service equivalent in Britain, aims to preserve objectivity by not featuring ads on any of its digital content, including podcasts, to viewers within the UK.

This question of authenticity is one NPR asked themselves, said Moffett, after the network decided to be “a little more aggressive” in acquiring sponsorship for its podcasts.

“There are a couple of commercial podcast companies out there that have really gone into this business and set a standard for having the host endorse products,” said Moffett. “That’s one place where we draw the line. We do not do endorsements, and we are very careful with the language [we use] to make it not sound like an endorsement.” 

This is achieved, he explained, through “couching language”. So instead of the host saying “the product is simple to use,” he or she will say “the product is designed to be simple to use”.

Reaching advertising-resistant consumers

NPR may have drawn a line when it comes to endorsements, but it’s a fuzzy one at best. Still, sponsored messages appear to be one of the most effective ways of reaching avid podcast listeners, an audience Moffett describes to us as typically resistant to marketing in other mediums.

“They’re the people who use ad blockers, the people who don’t like to be marketed to,” he explained.  “This isn’t the place to run your 30-second commercial radio ad, because that does not work.”

And the connection between show hosts and their listeners means better opportunities for advertisers too, said Moffett. “This is not passive background listening when you just have it on while you run around your house. It is active listening, and so the sponsorships are actively listened to as well.”

This is backed up by a November 2014 report from the UK based Radio Joint Audience Research (Rajar), which showed relaxing or “doing nothing in particular” was the activity with the highest share of total podcast listening hours (23 per cent).

This was followed by people listening during work or study (22 per cent share), driving or travelling (21 per cent share), and doing household chores (10 per cent share).

‘A literal voice’ 

Podcast revenues may still be relatively small, but both Moffett and Bowers agree that for publishers, audio shows can bring value other than cold hard cash.

“It has given a literal voice to a [digital] magazine which has always been without voice,” said Bowers. “Now, if you want to know what the people who write for Slate sound like, how they think, even sometimes how they generate story ideas… it is a much closer connection people are able to forge with the writers and editors who they like and that has been invaluable.”

It’s a benefit audiences have also enjoyed from other publishers such as the Guardian, whose early podcasts featured discussions with columnists and editors who most readers would otherwise never have heard speak. Meanwhile, Moffett emphasises the benefit of podcasts for reaching new audiences, especially a market sought after by publishers and advertisers alike – millennials.

“The general trend is, as you move from radio to digital and then to podcasts, the demographic of the audience changes and it generally gets younger,” he said.

Why this matters 

Of course, the ubiquity of smartphones and the internet have made a significant contribution to the recent podcast popularity surge.

The Edison research[47] [48]  showed nearly two-thirds of those who listen to podcasts do so on a mobile device, compared to 36 per who listen on a desktop computer.

However, the same survey showed that when people get into podcasting, it quickly starts to dominate what Edison terms their ‘Share of Ear’. Edison asked more than 2,000 respondents to keep a 24-hour ‘audio diary,’ tracking how much time they spent listening to podcasts, radio and music streaming services such as Pandora or Spotify.

The data revealed that for daily podcast consumers, podcasts are 30 per cent of what they listen to each day  – more than any other form of audio.

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In the same way that people are now used to getting their favourite TV shows on demand, it seems audiences now expect the same of audio.

“In my view podcasting is like the DVR [digital video recorder] of audio,” said Bowers. He’s not alone in this view, with print publishers also moving into this space. Both The Economist and Time magazine, for example, both now offer audio versions of their complete weekly print publication.

“Once you get used to being able to set your own schedule and listen to things from the beginning and pause them and skip them and do all of the things you can do with digital content, the radio becomes… listening on someone else’s schedule.” 

“So as podcasting gets into cars and as more people figure out how to use it on their phones, it will become the main way that future generations listen to spoken word audio content.”