Everyone is Chasing the News Podcast Craze
Podcasts are so fetch.
Although I believe our industry is smart enough not to do a huge “pivot to audio,” it seems that everyone is launching their own news podcast.
But just how big is this industry getting?
According to a report by Reuters Institute for the Study of Journalism and Oxford University:
Across all genres, the number of new podcasts is growing at a rate of more than 200,000 a year, though this rate has started to slow a little (see the next chart). Many of these are produced by hobbyists and individuals, but this growth is also increasingly driven by higher-quality professional content with significant investment from broadcasters and digital-born publishers, as well as those with a background in print. There have been almost 12,000 new news podcasts so far this year [by October 28], representing an increase of around a third (32%) in the last year.
This chart shows it in clear detail:
On Monday, Ride Home Media announced it had raised $1 million from Tiny Capital to expand its daily news podcast network. Fast Company wrote about it:
McCullough [Founder] knows Ride Home doesn’t know everything about everything, so the company is putting out a call for potential creative partners to make podcasts for almost any news niche. The partnership model he’s proposing is a bit like a podcast franchise. Ride Home Media pays the producers and hosts a production fee, then has a revenue share on top of that, so the talent participates in all of the upside of any show.
Everyone and their mother is getting into podcasts.
I can understand why so many people are moving into audio. Compared to video, which comes with a serious cost, audio is a leaner operation. Couple that with the fact that journalists are increasingly becoming celebrities and you’ve got a great opportunity for audiences to feel connected to them.
Not to mention, there is a growing pile of money to be made. According to the report, in 2018, news/politics accounted for 18.4% of the $479.1 million in podcast revenue. But with news podcasts growing, the percentage should grow. Let’s assume it grows to 25% of revenue by 2021. PwC is estimating that podcast revenue will be $1.044 billion, so news podcasts would earn $261 million.
That’s real money.
Although not specifically news focused, Slate has done rather well with podcasts. According to a Digiday article published in May:
Slate was one of the first digital publishers to seize on podcasts as a source of audience and revenue — it began producing podcasts more than a dozen years ago. But in recent years, the format has grown from important to essential: This year, audio could represent “nearly half” of Slate’s revenues, up from 28% in late 2018, Slate president Charlie Kammerer said. Slate declined to comment on how much revenue it generated last year.
And let’s not get started with the fact that The Daily is earning eight figures a year for The New York Times. But it makes sense considering how large it is. According to the Digital News report:
The New York Times says that The Daily reaches 2m listeners per day up from 1.1m in June 2018. The Economist told us that The Intelligence, which is less than a year old, reaches 1.5m people each month, with around 6–7m individual downloads monthly. It says that the average listener downloads or listens to three to four episodes each week. These are substantial audiences, even if they are not yet on a par with the most popular radio news shows in the US.
Suffice it to say, there is real excitement around audio. But with 12,000 new news podcasts launched in 2019, you have to wonder, is there any more room for growth?
Ad revenue is not keeping up
Here’s the real problem…
While it’s true that ad revenue is growing—and it certainly is—it’s not growing fast enough to support all of the podcasts that are coming out.
If we hit $1 billion in total podcast revenue in 2021 and $261 million of that is dedicated to news podcasts, then how much would each podcast earn? If it were an even distribution, let’s say there are 50,000 news podcasts. The answer is approximately $5,000 per podcast.
Naturally, we know that’s not how it works. The Daily will obviously get tens of millions of dollars. So, just removing that one podcast and its revenue cuts the mean down under $5,000 per podcast.
Even if we were to 10x the news podcast revenue and we’re sitting at $2.61 billion, the amount per podcast is only $50,000. That’s not even enough to hire one good journalist let alone the sound technician to go along with it.
And let’s be real… There is not going to suddenly be a 10x explosion in advertising revenue for podcasts.
To hear it in clearer terms:
“The hardest thing to do is to make something that is big,” said Slate president Charlie Kammerer at the Digiday Publishing Summit. “There are 100-150 podcasts out that there that are big and then there are hundreds of thousands of podcasts that 8,000 people listen to.”
The other problem is that the highest CPMs are tied to host reads, where the advertisement is read by the individual doing the podcast. This is clearly hard to do with a news podcast since that means journalists are reading ads. Even if that somehow becomes copacetic, you’ve got the problem that host reads simply don’t scale.
How podcasts still fit
Let’s say that you ultimately get stuck with a podcast that is only getting 8,000 people to listen. Depending on the scale of your operation, that might actually be okay if you think outside the box.
What is the completion rate of your show? According to the Digital News Report, they found that some of the more successful news shows had people returning multiple times a week with completion rates between 60% and 90%.
If that sounds similar to your show, you may want to look at your podcast as a tool of engagement and secondary revenue rather than a primary revenue driver.
So long as you have an engaging product, there are a couple of ways to generate revenue even if there is not much in the ad revenue department.
Add it to a subscription
Have you been thinking about rolling out a subscription, but you’re not sure if you’ve got something that is 10x better than everyone else?
Now you do. If you have a small, but loyal audience, this is where you can make your podcast part of the subscription.
I wouldn’t immediately restrict access to your current podcast, though. Instead, try and be additive where you can. If you’re doing a weekly news podcast, can you expand it to twice a week and only let paid subscribers have the second show? If you have to be subtractive, you can by limiting some exposure, but I would still release some episodes to your free audience—if nothing else, it acts as marketing for your subscription.
Start doing events
I was having a conversation about this yesterday. If you haven’t found an event strategy that works for you just yet, why not make live recordings of the podcast the event strategy?
Use your office and then sell tickets for people to come watch it get recorded live. Once again, you’re talking about a super loyal audience. They are likely to be interested in watching, especially if the news podcast has a strong personality helming it.
Axios reported in July that this was a growing business as you can see in the chart below:
The key thing for those that have never done an event before is that you absolutely want to sell the tickets. Even if you’re only selling 100 tickets for $20 a pop, charge for it so people show up.
For free things, people are likely to flake out. But when the psychology kicks in of having paid for something, people are more likely to show up.
If you want, you can expand this and make it part of your subscription. Only people that are paying subscribers get invited, so it’s an additional community aspect to get people excited about your subscription.
There’s definitely a bubble…
It’s easy to call something a bubble. Just look at some financial commentators. They call bubble year after year, are right once and, despite being wrong for years after, they still can sell newsletters and get booked on CNBC.
But I do actually think there is a bubble in podcasting, the same as I think there is probably a bubble in newsletters.
There are simply too many of them. Just look at how many new impeachment podcasts got announced over the past month. Do we really need that many?
Yet, here we are. Some might survive. But many of them are going to fail simply because there is not enough audience to go around. In niche audiences, there’s room to play and if you couple it with some of the above tactics, there might be a viable play there.
So, before you dart into the news podcasts craze, really try to figure out if it’s the right approach for you. If there are only going to be a few hundred really large ones, are you going to be the one to break into that?
If nothing else, this is a lesson in discipline. The best operators don’t get distracted with shiny objects. Be cautious chasing the herd into a new product just because some are making money. We’re not The New York Times.