After many years, podcasting is finally attracting the attention of people with large checkbooks. Suddenly, venture capitalists, established media companies, and streaming services are rushing to invest in the podcasting space. Among other big moves, iHeart Media acquired Stuff Media for $55 million, Luminary lined up $100 million in capital, and Spotify purchased Anchor and Gimlet for $340 million.
Naturally, these investment dollars are chasing advertising dollars. Advertising revenue for podcasts is expected to grow by nearly 30% annually for the next several years, and everybody wants a piece.
All of this sounds like a boon for the podcasters who have been toiling away at their craft for years. While it may be good for their pocketbooks, it's also likely to take a toll on their blood pressure. After all, the early days of podcasting were dominated by pioneers who broke all the rules. These trailblazers reveled in the fact that they weren't confined by the restrictions of corporate radio. Instead, they relied on their gut instincts to figure out what people wanted to hear. And many of them succeeded precisely because they were giving audiences something that they couldn't find anywhere else. It turns out that there's a large number of listeners in search of in-depth conversations about high-tech gear, the mechanics of stand-up comedy, and drunken tales of unsolved crimes that weren't being served by traditional media outlets.
Now, however, the situation is changed. Podcasting equipment is inexpensive, distribution is easy, and everybody has something to say. As a result, there's a glut of content — over 700,000 podcasts in existence with new ones launching every day. So while more advertising dollars are flowing into the space, there's also more competition for those dollars. As serious investors put big bucks behind their ventures, the stakes — and the stress — are inevitably raised for podcast producers.
The good news for listeners is that higher stakes leads to higher quality podcasts. When there's only one podcast about beet farming, passionate audiences may be forced to tolerate low quality; but when there's dozens of podcasts about Game of Thrones, only the best will survive. “Either you win, or you die.”
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Figuring out how to produce these higher quality podcasts requires feedback from the audiences. The only way to know what's resonating with them is to ask — in other words, to conduct research. Research, of course, is what led to the rules that the podcast pioneers rebelled against in the first place. But once millions of dollars are on the line, “gut instinct” isn't good enough anymore. When the second season of a hit podcast suddenly sees a precipitous drop in download numbers, the suits who write the checks will call in experts to find out why.
This is the inevitable cycle as a medium matures: Rule-breaking trailblazers attract investors and advertisers who seek validation through data, giving rise to new rules that eventually spawn a new generation of rule-breakers. We've seen it in movies and television and radio. We've even seen in in music: Elvis Presley, the Sex Pistols, and Run DMC were all rule-breaking pioneers that spawned musical movements so big that they eventually inspired their own counter-revolutions. Now, we're seeing the same thing in podcasting.
It's not hard to figure out where we are in the cycle: The suits are moving in. That's good for a company like ours; for decades, we've been helping audio content creators figure out what audiences want so they can do a better job of delivering it. While we've worked with some of the biggest radio shows in the country over the last 30-plus years, it's worth noting that we are almost never hired by the talent; we're hired by management. We work with talent, of course — you don't stay in business for this long unless you're good at working with talent — but sometimes, we encounter resistance from those who found their early taste of success by following their guts.
In truth, the secret to a long career is to find the right balance between gut instinct and the research. Finding that balance isn't easy and often comes with a lot of tension. From the consultants called in by the investors, it requires a deft touch and a deep understanding of the space. From the talent, it requires a thick hide and an understanding that feedback, criticism, and coaching is how superstars raise their game. As the podcasting medium matures into the next phase, it will be interesting to see who is able to find this balance and who isn't.
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