Apple‘s announcement last month that its customers had subscribed to more than a billion podcasts in the eight years since the medium’s iTunes debut may have taken some by surprise. After all, since the debut of podcasting, seemingly more revolutionary technologies like Twitter and tablet computers, not to mention the ubiquity of online videos, have captured the public and the media’s imagination while podcasts (named after the increasingly obsolete iPod) seem very 2005. Meanwhile, in recent years, some news organizations like the New York Times have largely abandoned the medium as financially inefficient.
But while podcasting is no longer exactly cutting edge, the numbers show the medium has grown increasingly popular among consumers. According to the market intelligence firm Edison Research, the percentage of Americans 12 and older who have listened to a podcast has steadily increased from 10% in 2006 to 26% today, while one in six Americans has listened to a podcast within the past six months.
This rising popularity has not only been a boon to established media companies like ESPN or NPR, which leverage the medium more as a marketing tool than for the revenue it generates, but also to dozens of independent podcasters who are finding a way to make a living from internet-based audio entertainment alone.
One such small businessman is Dan Carlin, who’s Hardcore History podcast has been garnering more than a million downloads per episode of late. While it may be somewhat surprising that a history-themed podcast that often runs longer than four hours could be so popular, Carlin argues that consumers who are looking for more intellectually-stimulating entertainment have been all but abandoned by the mainstream media. “Look at the history channel,” says Carlin. “They’re doing shows like Ice Road Truckers and Monster Quest because they’re convinced nobody wants to watch even half-hour history shows. People who would be our competition are running scared because they just don’t think people care.”
Carlin’s podcasts are hardly reminiscent of the dry history lectures you might remember from school. Carlin puts the “hardcore” in Hardcore History by focusing his narratives on the most violent and dramatic moments in human history, filling his show with colorful anecdotes that were most likely left out of your high school history class.
But his point about mainstream media abandoning the subject of history is an important one. While a cable channel that’s under pressure to maintain high viewership might shy away from investing years in building up a devoted following, a small operation like Carlin’s is free to take chances and give itself a chance to grow.
And with the rise of new media, consumers now have more opportunity than ever to find entertainment that fits their unique tastes. The business model of old media was to create broadly appealing entertainment that was offensive to no one, and then sell that audience to advertisers who would pay big bucks to reach a large number of people. New media, on the other hand, is about appealing to a smaller number of devotees and leveraging that intense relationship for profit.
Different podcasters are approaching this model differently. Because of the research involved in each episode, Carlin can only get an episode out every 10 weeks or so, making his show a little less appealing to advertisers. Though Carlin does make a portion of his money through advertisements, the majority of his revenue comes from listener donations, with sales of older episodes (the newest are available for free) and money from Amazon‘s affiliate program filling out the rest of his revenue stream.
Other popular podcasters, like Joe Rogan of the The Joe Rogan Experience and Marc Maron of WTF with Marc Maron produce shows as often as twice a week, and are therefore able to garner higher ad rates. And advertisers like the web hosting company Squarespace or the internet services company Tucows are flocking to podcasts as an alternative to television, online banner, and print ads, all of which consumers are becoming increasingly adept at ignoring.
Michael Goldstein, the head of marketing for Tucows, has had success advertising two of its brands through podcast advertising: cellphone service provider Ting and the Internet domain registration company Hover. Goldstein spent most of his career working big ad agencies like Ogilvy & Mather before coming to Tucows to run its in-house marketing department four years ago. Goldstein remembers that he was amazed at how many advertising techniques that used to be successful ten or 15 years ago just weren’t cutting it anymore. “I just couldn’t believe how good people had gotten at ignoring advertising of any kind,” Goldstein says.
He tried using print, banner, and outdoor advertising to drum up business for Hover, and was just not having any success. At one point, he was approached by technology podcaster Leo Laporte who was a fan of Hover and wanted to promote the product on his show. Laporte’s heartfelt promotion of Hover made a nearly instantaneous impact on their business. “There’s Hover before that placement, and there’s Hover after that placement,” says Goldstein. “Our business just took a giant step forward.”
Since that time, Goldstein has stepped up his advertising via podcast, placing ads with Dan Carlin, Joe Rogan, and others, arguing that it’s the single best way he’s found to break through an advertising-saturated culture and capture the attention of potential customers. “It’s really about the relationship between the podcaster and the audience,” says Goldstein. He’s even found that listeners are actually grateful to the company for sponsoring their favorite programs. “You never get somebody grateful to the Ford Motor Company for sponsoring ‘Two and Half Men.'”
This reaction perfectly highlights the tension, however, that both advertisers and content producers will face as they try to grow their businesses through podcasting. The average Hardcore History listener, for instance, is protective of the show not only because it offers a unique product that can’t be found anywhere else. They’re also protective of the show, and even willing to back it voluntarily, because they know it might otherwise go away. That makes expansion — whether in the form of bringing on different people in order to ramp up output or by taking on more sponsorships — a tricky proposition. Listeners may begin to lose the trust they feel with a podcaster if the show becomes too overtly commercial, making them less likely to support the show in other ways and less likely to react as strongly to a host’s endorsement.
For this reason, podcasting may never become big business in the classic sense of the term. But for those advertisers and podcasters who are able to find success in this medium, podcasting will be a big deal, even if its on a small scale.