Yesterday's post talked about an apparent podcasting swoon – or is it just a temporary speed bump? I spoke with a number of people yesterday who had no shortage of opinions on this topic.
Those concerned about podcasting's future often point to monetization issues as one of the culprits that explains why some companies are questioning whether they should commit and invest to on-demand audio over the long haul.
To get a better understanding of podcasting revenue – and how it's generated – Marketplace looked at podcasting from a different point of view. They dove into the model that many Chinese podcasting content creators are working on in the space. Interesting, podcasting isn't highly popular in China – compared to what is taking place in other countries – especially South Korea. According to a Reuters study conducted earlier this year, one-third of U.S. consumers say they had listened to a podcast in the previous month. (Techsurvey 2018 puts that monthly level at 31% – consistent with Reuters' findings):
China doesn't appear on this list, apparently a country not even included in the Reuters research. Data from Libsyn, however, suggests that China is light years behind the U.S. when it comes to podcast consumption. (BTW: This is one of the problems in podcasting – everyone's numbers are different, making it difficult to confidently assess the present – and the future.)
Yet, Marketplace reports podcast revenue in China is north of $7 billion. In the U.S., it was $314 million last year. So, what do Chinese podcasting mavens know that we haven't figured out here in the country where podcasts first originated?
Simply put, U.S. podcasting revenue is primarily ad-based. In China, they mostly use a subscription model. It turns out a national research institute in China determined that what they call the “pay-for-knowledge economy” is worth billions of dollars, especially with podcasting content that offers useful knowledge, skill-building, and tools that can help make consumers successful in an increasingly competitive job market – as well as their growing society.
In China, it's about “buying information online” about any number of topics to help make people feel more confident about that their skill sets, preparing them for the next rung of the ladder, and helping get them ahead on the job and in life.
One of the Chinese podcasts mentioned in the Marketplace story is “How to Make Your Voice More Attractive.” It was created by a professor of broadcasting, Zheng Wei. He has more than 200,000 subscribers to a podcast aimed at white collar workers trying to get a leg up. The cost? Under $3.
Popular podcast topics differ widely between the two countries, underscoring key cultural differences. In the U.S., it's often comedy, music, technology, kids and family, and true crime. Chinese podcast fans gravitate to “Chinese poetry and history, self-growth, finance, business, and education.” That's what's known as a culture gap.
Obviously, the mindset in Beijing is quite a bit different than in Burlington, Baltimore, or Butte. And while smart, savvy information may be scarce in China, it's plentiful in the U.S. where so many more resources are widely available for free online.
Would Americans actually pay for lessons, teachings, and guidance from respected thought leaders?
Perhaps a look at the Master Class model is helpful. Consumers pay $180 annually for “all access” to cooking classes taught by Gordon Ramsay, Aaron Sorkin pontificating on screen writing, Steve Martin presiding over the comedy curriculum, and Bob Woodward lecturing on journalism. It doesn't get any more “expert” than that.
These classes leverage the celebrity of their famous “instructors.” The jury is still out on whether people will pay for classes/videos delivered in on-demand form from some of the best known content creators.
And that's not far afield from where podcasting sits right now. Today's ad-driven model may, in fact, turn out to be successful in the long run. But dynamically inserted produced ads, live reads, and sponsorships are pretty “old school” ways of monetizing audio content – and have become shopworn, tired, and repetitive on AM and FM stations.
Maybe it's the second quarter for podcasting, and we have a lot of game left. We may find out there are many ways to approach podcasting creation and monetizaation that may not resemble what's been done to date. We've talked about branded podcasts in this blog before, a different way for radio companies to participate without having to create compelling, original content.
The Chinese model suggests there are different approaches that might open new financial doors for podcasting. Americans are paying billions to subscribe to music playlist services, streaming video platforms, and satellite-delivered “radio.” Would they pay subscription fees for truly great podcasts?
That's what they were thinking at Audible (owned by Amazon) just a couple of short years ago. Did the model not work, was it the content, or something else?
There are more questions than answers about podcasts, whether they're about measurement, monetization, discovery, or content creation. But if the concept of audio on-demand becomes as mass appeal as video streaming, there will be enough money to go around for many podcast producers.
That doesn't mean we'll listen to anything. Netflix will invest a reported $12-13 billion this year toward the creation of video content – more than any other television-like network or platform. It requires substantial investment to buy (or acquire) shows like “Ozark” and the many others we're addicted to on Netflix.
As the stakes inevitably rise for quality podcasts, re-purposed morning shows, mind-numbing interview shows, and other paint-by-numbers podcasts just won't cut it. Radio, in particular, will not be able to mail this one in.
Success in this space will require dedicated, qualified personnel, research, investment, strategy, and innovative thinking.
It will be fascinating to see who is willing to ante up.
That old Chinese proverb – “May you live in interesting times” – continues to ring true.
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