This is hot pod, The edge‘s newsletter about podcasting and the audio industry. Register here for more.
I hope you all had a nice week! Hot Pod Summit was a lot of fun – it was great meeting so many of you in person and talking about some of the biggest issues in the industry.
We’ll talk more about that below, but first some acknowledgments. Big thanks to our partners at work x work and the entire On Air Fest team for organizing the event and the Wythe Hotel for hosting us. Plus, I definitely wouldn’t have gotten through this without the help of my Forget colleagues Kara Verlaney, Esther Cohen, TC Sottek, Helen Havlak and of course Jake Kastrenakes. In addition, we were so lucky that the Decoder team was ready to perform their first live show on the summit. You can hear Nilay Patel’s interview with Conal Byrne, CEO of iHeartMedia’s digital audio group, here.
And finally, we would like to thank our sponsors for the event: AdsWizz And Subtext. AdsWizz is a self-service advertising platform for creating and serving audio ads. Subtext is an SMS platform designed to connect creators directly with their subscribers.
It takes a village to make a podcast industry event, folks! Now some highlights from the top.
YouTube announces that podcasts are coming to YouTube Music
Please some news on Hot Pod Summit. I had the opportunity to speak with Kai Chuk, YouTube’s head of podcasting, and Steve McLendon, Google’s product lead for podcasting, and talk about their plans for the medium. The crux: Podcasts will soon be available on YouTube Music in both free and paid versions. It marks a significant departure from YouTube’s video-first approach to podcasting to date.
“There’s a whole new cohort of users and creators that we haven’t really optimized as best we can,” says YouTube podcasting chief Kai Chuk. “That’s something we want to change.”
They were well aware of YouTube’s new dominance in the industry and also the drawbacks of their platform. Although it’s the most used podcast platform in the market, it is still the best for video podcasts. Audio-only podcasts work the same way, but with a static image and none of the listening features consumers have come to expect from other platforms. “It’s pretty clear we haven’t had a great solution for audio yet. And there’s a whole new cohort of users and creators that we haven’t really optimized as best we can,” Chuk said. “That’s something we want to change.”
On YouTube Music, listeners can access the kinds of features they’re used to on other platforms, such as background listening, downloads, speed control, and the ability to switch between video and audio. McLendon also said the team is working on integrating RSS into the platform; at launch, the platform essentially only enables a better consumption experience for existing video podcasts. While that all sounds big, YouTube Music is much smaller than YouTube itself: 80 million subscribers versus 2.5 billion users. The advantage of YouTube is its searchability and reach. Chuk and McLendon said it doesn’t have to be an either/or approach.
“I don’t expect podcasts to be seen only on YouTube Music, that’s the only way people use podcasts on YouTube,” said Chuk. “We expect there will be some kind of back and forth between the two.”
McLendon used his own experience as an example, when he found a Kevin Systrom podcast interview on YouTube while sitting at his work computer and then switched to the audio version when he got into his car to go home. Getting consumers to switch from one to the other will become a priority. “We will bridge some of those experiences in a seamless way for the user and really focus on the user journey,” said McLendon.
Surely that’s how many people use YouTube podcasts (or at least I do): find it via Google and then switch to a listening platform. The key, I think, will be making sure they stay in the YouTube ecosystem. Right now you can start something on YouTube and finish the rest on Spotify or Apple. I’m curious if and how users will be taken directly to the YouTube Music platform, and if this can help increase YouTube Music subscribers.
How the audiobook economy could change
I was also really excited to delve into the world of audiobooks, which got a new big player in Spotify when the company completed its purchase of Findaway last year. I spoke with Spotify’s head of audiobooks, Nir Zicherman, as well as author and podcaster Gretchen Rubin and Penguin Random House Audio’s senior vice president of production, Dan Zitt. With the entire pipeline represented — creator, publisher, and platform — we were able to explore how Spotify’s plans to change the audiobook business model could impact the industry.
As an extension of the traditional publishing economy, the audiobook model has been quite stable for some time now. Consumers, who usually come to the medium as book readers, buy premium titles à la carte on something like Apple Books (usually for $10-$20 each) or subscribe to Audible or audiobooks.com for about $15 a month. It keeps prices closely in line with printing prices. Spotify has gone the a la carte route to begin with, but Zicherman says the company will look to expand on how it monetizes audiobooks.
“Applying a blanket approach to everything — every piece of content, every creator, just like podcasting — I think it really hurts the industry,” Zicherman said. “So the future I see with Spotify is a lot of different business models supporting all the different types of podcast content that exist and all the different types of audiobook content that exist.”
Former Spotify chief of content and advertising, Dawn Ostroff, said at an investor event last year that audiobooks could be available for free, supported by ads. Zicherman wouldn’t say whether Spotify would go down that path, saying only that the model would be “interesting” (cryptic!). He also said that Spotify is also exploring a Netflix-style subscription option.
Rubin, whose book is due out this spring, reviewed the potential pros and cons of using ad-supported distribution for her own work. “On the one hand, a listener can really like advertising support, because then it is free for him. So that might get people to my work who otherwise wouldn’t get it,” she said. “On the other hand, we all know that if people are used to paying for something, you’d rather they keep paying for it than give it to them for free. Because once people give something for free, it can be hard to win it back.”
Zitt was also intrigued, if concerned, about what it might mean for creators’ ability to make a living. “I think having a menu of options for how people sell content is a good thing, aside from the fact that content creators are paid fairly for the content,” he said. “Some of the models I’ve seen that have come and gone have not been beneficial to the artist, only the platform.”
Can Narrative Podcasts Make Money?
This is Nick Quah’s territory, and unfortunately his flight from Idaho was snowed out. So I stepped in with varying degrees of success. (You’ll have to ask the people who witnessed it.) Big thanks to John Perotti, Co-Founder and CCO of Rococo Punch, and Kate Osborn, EVP of Development at Kaleidoscope, for putting up with me. They provided great insight into how to create a premium narrative podcast these days, especially when studios can opt for chat shows that are cheap to make with potentially high returns.
So how much does it cost to make a decent limited edition narrative podcast? “$250,000 is the floor to make really good narrative, engaging content,” Osborn said. “I’d rather earn less than make it with the resources we have [need].” And if the story requires travel or lengthy research, that will push the price tag even higher.
Perotti explained how, when he went on to pitch the show that became the critically acclaimed series last year Welcome to Provincetown, he got no bites. So he self-funded the project until he got an investment from Stitcher’s Witness Docs. The risk was worth it. “Because we did it that way, we own the feed. Not only do we own the feed, it becomes a television show, or at least there is an option for television,” he said. “So it’s like, yeah, that’s a lottery ticket, I get it.” But that’s value.”
Getting optioned for TV can be a fate for podcast creators, but there are other ways to monetize their shows. “The IP game is great, but that’s not all, is it?” said Osborn. “It could be a play, it could be a live show, or literally a physical product… to do all those things together, I think, makes sense.”
Conal Byrne of iHeartMedia on trading wide reach exclusivity
Forget editor-in-chief Nilay Patel spoke to Conal Byrne, CEO of iHeartMedia’s digital audio group, for a live interview. They covered a lot of ground, but one theme that kept coming up was iHeart’s strategy to get as wide an audience as possible and have places like Spotify and Audible play for exclusive content.
“I strangle my audience when I choose to pull my RSS feed from a distribution app because people who go there and expect it there won’t see it again,” Byrne said. “That is why we are spreading it widely. Otherwise I’d be sitting here and saying, “We’re working really hard to get everyone on the iHeartRadio app.” The business and economics of podcasting today are still in the hands of the creator and the publisher, because you own the pipe through which you distribute your shows. I have yet to find a business model that proves otherwise, so I think it behooves all of us to connect that pipe to as many distribution points as possible.”
“We have about 70 shows on the iHeart Podcast Network that generate over 1 million monthly downloads or more,” said Conal Byrne, CEO of iHeartMedia’s digital audio group. “The only reason we have that number is because of radio broadcasts.”
Byrne also emphasized that the marketing of podcasts on radio broadcasts has been invaluable to the company’s podcasting business. “We have about 70 shows on the iHeart Podcast Network generating over 1 million monthly downloads,” he said. “The only reason we have that number is because of radio broadcasts.” Of course, that’s much easier to achieve if your parent company owns it more than 860 radio stations across the country and would benefit from other podcast companies following in kind!
As Nilay pointed out, there are risks involved in casting such a wide net. He asked Byrne about it a Bloomberg last year’s report which discovered that iHeart had teamed up with a company called Jun Group to buy podcast downloads through freemium mobile games. First, Byrne denied doing any such thing. Then he qualified practice. “We have experimented with Jun Group over the years. I think our stats were like never more than 1 percent, 2 percent, 2.5 percent of our downloads in any given month,” he said. “We don’t use it anymore.”
It was an interesting conversation, and that’s okay listen to it wherever you get podcasts or view the transcript at The edge.
Whew that was a long one! I slept about 15 hours after this event. I need a beat for the next one. See you next week.
