Podcasts continue to gain traction, Spotify bets big on them
Newspaper readership around the country continues to decline, but even so, people still have a voracious appetite for content, news and current events. The New York Times, which since 1851 has produced a regular newspaper, pivoted a bit in 2017 when it launched The Daily. The podcast, true to its name, is released daily and draws upon interviews with Times’ reporters to delve into what are deemed to be the most important and pressing stories of the day.
Podcast downloads ramp up
In just two and a half years, the podcast achieved 1 billion downloads, and as of September 2019, saw 2+ million unique downloads a day. I think it’s a great product, but some of its success can be attributed not only to its compelling content but to the fact that reading a newspaper on one’s daily commute often isn’t feasible. On the other hand, listening to a 20-30 minute podcast breaking down some of the most important news from the day is better suited to today’s lifestyle. And The New York Times has capitalized on that.
All of this is to say, we know there’s an appetite for podcasts around the country; it’s just a matter of tapping into what people are hungry for. The Daily has done that, but of course, it is not alone.
Love him or hate him, Joe Rogan is regarded by many as the most dominant player in the podcasting world. His laissez-faire approach, coupled with long-form interviews (sometimes surpassing four hours), appeals to droves of people who tune in to hear intimate details into the lives of well-known people. Rogan has a knack of making his guests feel comfortable – Elon Musk famously smoked a joint during a 2018 appearance on the show, sparking outrage from Tesla shareholders. According to Forbes, his podcast surpassed 190 million monthly downloads in spring 2019.
How popular are podcasts becoming? Consider this: The Daily and Joe Rogan Experience have approximately 250 million downloads a month. It’s a sign of the health of podcasting and a precursor perhaps of what’s to come. And advertisers have noticed.
Podcast advertising spends continue to climb, but advertising on the platform remains an inexact science. Native advertising has long been the method of choice when it comes to podcasts – meaning, the ads are naturally embedded into shows through either host live reads or prerecorded takes. Organizations advertising on shows have a general idea of listener demographics, but not an exact snapshot of who the audience is. And while data utilization for targeted advertising is not a new concept, podcasts have remained relatively sheltered from that world. But that is changing.
Spotify, the Swedish music and streaming behemoth, has been in the news recently after acquiring the rights to be the sole streamer of Joe Rogan’s podcast. But that’s not all it’s done. In the last year and a half, the corporation has bet big on podcasts, doling out nearly $500 million to bolster its portfolio through the acquisition of Gimlet Media, Parcast, The Ringer, and Anchor – a company that brings consumers easy-to-use podcast creation tools. Effectively, Spotify now owns the podcasting world.
What it means
A recent study focused on consumer behavior in America showed that 75% of the country (212 million people) is familiar with podcasts, 55% (155 million) have listened to one in the past and 37% (37 million) listen to podcast content on a monthly basis. These numbers show us that while podcasts have arrived, the medium as a whole still has a lot of room left to grow.
Still, there are those who say the podcast world already is overcrowded (in terms of sheer number of shows available), and yet others, like Michael Bosstick, CEO of the podcast network Dear Media, argue the contrary. In an interview with Yahoo Finance Live, he said, “That’s been said about every content medium, it’s been said about blogs, it’s been said about social creators. The best content rises to the top. And we’re just starting to scratch the surface of people taking this medium very seriously.”
And Spotify is taking the medium very seriously. And it’s not just because of subscription acquisition – though that’s part of it. Rather, the company is betting big on a world where podcast ads look more like web ads.
In addition to the acquisitions, Spotify has been busy creating new technology and launched its own advertising tool called Streaming Ad Insertion. Now, the tech is in place for targeted ads to be individually placed into shows as people listen to them, using user data to tailor them. On the surface, podcasts and their core ingredients will not change, but Spotify has set in motion a series of events that will change the way podcast listeners are targeted by advertisers for years to come, and the company will no doubt reap the rewards of their forward thinking.
As Ashley Carman of The Verge put it, “No other company is operating at this scale and with innovation this quick in the space. Apple has the platform and is the default player for iOS products, but it hasn’t acquired shows or sold ads. NPR makes incredible shows, but it doesn’t have a massively popular player. After only a year and a half of effort on Spotify’s part, the industry now has to contend with its most threatening competitor yet.”
Other groups are likely to mirror the efforts, but Spotify clearly has the first mover advantage when it comes to the new world of podcast advertising.
What podcasts are your favorite?