Issue 240,  published January 7, 2020

2020: Year in Preview

I’m something of a gambling man — though, Uncut Gems might’ve sworn me off sports betting forever — and if there’s anything I feel confident enough to throw my house down as collateral on, it’s this: 2020 is going to be a busy-as-hell. Between whatever is happening with the platforms, the increasing in-flow of money and eager new participants, the fact that there is still so much to do, and the 2020 presidential election cycle (among others), I imagine we here at Hot Pod will need to take out an insurance policy on our fingers.

Here’s how this preview issue is going to work: First, we’ll go over, with some depth, the ten major story buckets that we believe are important going into the year. Second, we’ll throw out an assortment of a few smaller story threads that are tugging on our curiosities. And finally, you’ll find a short blurb on creative/content-related things on our minds.

There’s also a brief story on Triton Digital’s upcoming Podcast Rankers, because this newsletter tends to be too short, you know what I’m saying?

Okay, let’s jump in.

THE TEN MAJOR STORY BUCKETS

NQ: Apple v Spotify

Yes, yes, okay. Look, I know it’s a tired framework. I know it’s hacky — like, sports talk radio hacky. And I know there’s a genuine argument you can make about how the podcast landscape’s on-going transition from a “benign monopoly” into a  legitimately competitive duopoly can actually be interpreted as a story about growing the whole pie. Non-zero sum game, and all that.

But I mean… come on.

I’m still reticent to call it a ~Platform War~ — sorry, Nilay — but you can’t view what Spotify’s doing as something that doesn’t directly affect Apple. Take a broader perspective, and consider how this isn’t a strictly podcasting matter: a completely feasible reading is to see Spotify’s podcast push as a way to orthogonally bolster its position on the music front. At the end of the day, the competition is about getting users, audiences, and listeners into respective ecosystems, and every casual Apple Podcast user that gets flipped into a power Spotify Podcast user is potentially one less person that could become a power Apple Music user.

The year begins with fundamental questions for both sides. On the one hand, how will Apple respond to Spotify’s loud efforts to deepen its podcast position? The mind recalls the possibility of some push into original programming, per the summer Bloomberg report, though there may well be alternative ways for Apple to engage in this competition.

And on the other hand, what comes next in Spotify’s on-going advance into podcast territory? I don’t think we have to wait too long to find out.

NQ: Open Podcasting

However the Apple-Spotify competition plays out will have widespread ramifications for the ecosystem at large: deal-shaping, launch approaches, the way we think about audiences, the universe of analytics, where and how monetary value is extracted, and so on. But the most significant ramification, historically speaking, will be its impact on podcasting’s openness. By the end of the year, will podcasting remain largely open and free, or will it be mostly mediated by platforms that assume gatekeeping behavior? Will openness remain the norm and ideal?

So, I’m aware that there’s substantial room for discussion around what “openness” specifically means down to a granular technical level — client agnosticism, RSS feed primacy, so on and so forth. But I tend to be an end-goal kind of guy, and so from a big picture perspective, I view the question in terms of power and opportunity: to be open means to be able to self-actualize without needing to be directly mediated by a centralized governing authority. (Feel free to punch me in the face for overly simplifying the discourse.)

How this story works out will depend on the podcast community’s predominant operating culture — i.e. the default manner in which the majority of podcasters publish works and access audiences — and how it changes as the shape of opportunities evolve. It could well be the case that the majority of podcast publishers will choose to place all their eggs in a single platform basket; it’s equally possible that enough publishers will opt to spread things out.

Whatever the case, it’s worth noting that nothing is fait accompli. I still believe things can end up in any number of ways.

CC: Independence in 2020

With an increasing number of corporations spending a good deal of money on podcasts, the independent podcaster will likely face turbulent times ahead. An entity like Spotify may truly believe that their machinations will expand listening for all — rising tides and all that — but it doesn’t change the fact that small operations are increasingly competing against outfits with significantly deeper pockets.

Still, there are plenty of creators exploring different ways of being independent, from new business models to a quiet rejection of the idea that success only comes in the form of copious downloads and eager sponsors. Inhabiting a niche has long been a worthy goal for a small podcast; now it can potentially be a profitable one too.

I’m intrigued by a movement towards further collaboration. I’ve seen this in the UK, where the market is a little smaller, but I’m also seeing it in the US, where some podcasters are choosing to form collectives or networks that suit their artistic or financial aims, or both. (In a way, it’s a callback to an earlier time, when we had outfits like The Heard.)

We’ve covered the likes of NYC-based indie collective Multitude and there are plenty more popping up in that vein. Where once independents might have bet on attracting the attention of a larger network and leveling up into the corporate audio world that way, I think now there’s beginning to be a realisation that independence is an end in itself, and can be better experienced together.

NQ: Everyone Else

A brief and incomplete run-down of various other podcasting constituents, plus associated questions:

  • Public Radio: How will John Lansing, the new CEO of NPR, approach the organization’s podcast strategy? How will value be shared between the national organizations and the wide array of local stations?

  • Digital Media Companies: Will we see more digital media organizations effectively build audio divisions on a par with companies like Vox Media, The Ringer, and the New York Times? What will be the common characteristics and prime differentiators?

  • Legacy Radio: How will the increasing participation of legacy radio companies in the podcast space change the economics and value narrative of podcasting?

  • Music Conglomerates: I doubt Sony Music will remain the only Big Three music label that makes considerable podcast investments. What comes next from them, and what will we see from Universal and Warner?

  • Hollywood Studios: I fully expect to see the two-way Hollywood-podcast pipeline deepen in the coming year. On that note, two questions: will we see actual value creation that’s native to the medium, or just IP-harvesting and prototyping with a side of digital gentrification? And will we see something actually truly great from Hollywood’s increasing takeover of the fiction genre?

CC: The Conditions for the Creative Worker

This is something where we’ve already hit the ground running on this year, with Nick’s coverage of the gig worker AB5 law in California last week. That’s an unfolding story in its own right, with audio freelancers among those facing uncertainty and potential difficulty as the notion of who is a contractor and who is an employee in that context is thrashed out.

That debate is all around one state’s law and where the line between “exploited gig economy worker” and “thriving flexible freelancer” can be drawn, but it’s a broader discussion touching other areas and countries too. We saw several pushes toward unionisation in US audio-related companies in 2019; fair compensation and conditions are by no means guaranteed in this industry. Growth creates opportunities, but it also produces pain points.

While some of the factors affecting this strand are specific to audio — the arrival of more big platforms wanting original podcasts means trickier contracts to work out, for instance — this is also an area where wider economic and political situations matter a lot. The UK, for instance, just elected a government from a party that is historically at odds with labour movements and state subsidies. That’s going to have an impact on if and how people organise, for sure.

NQ: The Global Ecosystem

Two of the more interesting stories that stuck with me from last year was (1) the founding of Podfront UK, Stitcher and Wondery’s joint venture that seeks to build a revenue bridge between the US and the UK, and Art19’s incursion into South Korea via the acquisition of BirchSound, a South Korea-based podcast advertising firm, which was subsequently rebranded as Art19 Korea. Both represent a particular thread of the global podcasting story: how American podcast companies are building the foundations for structural expansions abroad.

They also represent, in my view, the roots of how we can begin to effectively talk about podcasting globally using a shared industry language. In the past, I’ve found that the fundamental problem when talking about the podcast business within an international context is a matter of epistemology: when we talked about podcasting in Asia, Latin America, and so on, were we talking about the same thing?

The answer, I think, was a simultaneous yes and no. As I sought to highlight in the column I wrote last year about China, the dominant on-demand audio ecosystem in that country — as facilitated by Ximalaya FM — is significantly more like Audible than it is like the American podcasting ecosystem as historically cultivated by Apple Podcasts.

As such, any analytical comparisons between “podcasting” in the two countries would be inappropriate to make, unless you take the broader view that all on-demand audio systems compete along the same frontier. Perhaps we should, in which case the conversations we’re having about podcasting and on-demand audio in America must necessarily include discussions about things like Audible, Libro.fm, Headspace, and so on. That requires an understanding of how podcasting is a specific entity, with specific definitional traits, that is nonetheless connected to a wider network of on-demand audio supply chains… which, in turn, requires a further understanding that all audio plays compete for the same global pool of earballs.

~ it’s all connected, man ~

CC: Metrics and Measurements, as always

Last year saw plenty more hosts and publishers moved towards compliance with the current IAB standards, aka v2. There seems to be increasing agreement that this is the way to move forward in terms of ensuring clarity right now; it’s more of a technical hurdle for those who have yet to be certified than anything else.

Looking ahead, it feels like the actual numbers and how we measure them are going to matter less than the public narrative around them. There’s a strong feeling in some corners of the advertising world that podcast ads are still too difficult to track, leading some to push for more programmatic solutions and others to stick firmly to the tried-and-tested coupon code route. There are efforts to get beyond this already, as we’ve highlighted, and for the predicted revenue growth across the industry to realize itself, there has to be more of this.

Two more things. Firstly, as more radio-first companies push their way into the podcasting arena, they face a challenge in how they measure the success of their new content. (I’m thinking mostly of the BBC on this, but it applies elsewhere too.) Secondly, as per the discussion of independence above, there are many and varied attitudes to numbers beyond just “more is better”.

CC: Alternative Business Models

I ended 2019 by writing about how I felt relatively positive about the expanding choice available to podcasters seeking a business model beyond advertising. I’ll be testing that view constantly through this year by tracking developments in areas like recurring crowdfunding or subscription services, donations, live events and performances, and non profit or state grants.

That first category is one that we’ve covered a fair amount to date — between Patreon, Supporting Cast, Glow and others, there are already plenty of players in that space, but I’m sure there will be more arriving. The user experience of that recurring subscription/paywall premise could still be better across the board, and it’s iterative technology improvements (and those offering them) that I think will be worth looking out for both on subscriptions and donations.

Of course, live events have been big business for bigger shows for a while now, but as with all of these models, it’s when they start becoming viable for smaller podcasts that things get interesting. A show with a million downloads an episode can sell out a ten-date tour, sure, but it can also sell all of its ad inventory. It’s the evolving mechanics that can open up these options to smaller shows that I’ve got my eye on.

CC: How the Creative Side Responds to the Business/Platform Side

Spotify has been trying out different ways of extending its playlisting strategy around music to podcasts, most notably so far with the personalised “Your Daily Podcasts” and “Your Daily Drive” features we saw launched late last year. There was cautious optimism around this rollout at the time, I think mostly owing to the feeling that any potential mass market solution to the so-called podcast discovery problem was worth a look.

Which is all to the good, but I think we’ve yet to see much of the creative fallout that widespread listener adoption of these playlists could produce. What is essentially a business decision — using algorithmic tools to push podcasts to more users, justifying major expenditure on acquisitions and so on — could end up reshaping how podcasts are made and marketed just as they have with music.

Analysis showed that podcast episodes on average got shorter in 2019, and there are non-artistic reasons we might suggest for that, including the rise of daily podcasts, algorithmic playlists, and the desire to have material selected for curated smart speaker bulletins. You know how YouTubers keep making longer videos, especially pushing them over the ten minute mark, because then the platform lets you place more than one interstitial advert? That’s the kind of cause and effect we may well begin to see in the audio world, too.

NQ: Investments and Innovation in Podcast Tech

I buy some stock in Jake Shapiro’s interpretation of the historical shape of podcast investments up to this date, as outlined in his entry for Nieman Lab’s Predictions for Journalism 2020 package. He wrote: “To date, investments in podcast tech has understandably been concentrated at the bottom of the stack (hosting) and the top (players/apps). This makes sense in an industry where major platforms have not (yet) been driving monetization.”

The time will probably come when that last point will no longer hold true — sooner than later — and so the resulting question is where else, along the stack, will we see investment interest and attempts at technical innovation. Shapiro believes it will be in the marketing/listener relationship management end of things. Maybe, perhaps. I have no idea, but I suspect we’ll probably see a decrease in interest around enterprise-level hosting (too many players) and third-party podcast apps (see Apple v Spotify).

Anyway, this question shouldn’t be exclusively posed to technology within podcasting. It’s probably useful to pay attention to all sorts of investments and technology in the broader audio world that could reasonably impact podcast consumption, discovery, and creation — stuff like audio-first augmented reality products, wearables that push the boundaries of audio-first computing, and other technical experiments that seek to expand the general listening experience.

After all, the biggest changes tend to come from the places we least expect.

SOME OTHER THINGS WE’RE THINKING ABOUT

(1) Maybe it’s just me, but I’m not we’ll see any more content-focused podcast companies backed by venture capital (a la Gimlet Media, Wondery, WaitWhat) in the future. Not in the present iteration of the market, anyway. So, what other financing models will we see bubble to the surface? Joint ventures seem to be coming into vogue (maybe it’s just Sony Music), and PodFund seems promising, but is there anything else out there? – NQ

(2) Another way that independents and collectives are seeking to diversify their business models away from advertising — especially in smaller markets — is through brick and mortar podcasting spaces. I wrote about the HeadStuff network in Ireland that just opened a new hybrid studio and co working space in central Dublin last year; and I’ve heard of several similar spaces coming in the UK in the next year. Renting desk space and studio equipment can provide a solid revenue stream. Interestingly, the projects I’m aware of are all out of London, where presumably astronomical rents make it hard to get something like this off the ground without major investment. – CC

(3) Over the past few years, the independent studio has been a pretty good model for producers looking to take control over their own fortunes… to some significant effect, I should say, given the recent acquisition of Pineapple Street by Entercom and the major investment in Neon Hum by Sony Music. Will budding podcast entrepreneurs continue to flock to this model, or has the value proposition for the independent podcast studio changed in the wake of those acquisitions? – NQ

(4) This year marks the third year where the UK’s state-backed media watchdog Ofcom acts as the BBC’s regulator, producing a major annual report (expected in October) on how the corporation is using its public funding and whether it is meeting the required criteria for public service broadcasting. Although there was some demographic survey data about on demand audio listening in the 2019 report, the 2020 document will contain Ofcom’s first major assessment of BBC Sounds, the corporation’s new online home for all podcast and radio content, which was launched in 2018, and is a key part of the BBC’s strategy for winning back audience share among young people. – CC

(5) I spent some time last week asking various folks for podcast stuff they’re thinking about for the new year. The most common response, by far: how will the relationship between podcasts and music licensing change this year? – NQ

On the creative front: The 2016 US presidential election cycle resulted in a pretty noticeable boomlet for podcasting. I imagine the upcoming year will be somewhat similar, but not completely the same, given how the market has grown and how news podcasts in particular have matured over time… Fully expect the True Crime-Celebrity dyad to continue being the dominant genres of choice for growth-seeking publishers everywhere. But will we see any creative courage?… Been a while since we’ve seen a bonafide breakout hit… Who are the next batch of rising podcast stars? I have some in mind… The fiction podcast genre, once distinctly indie-driven, is increasingly being populated by the Hollywood minimum viable prototype-for-IP pipeline. What’s going to happen there?… Will we ever find out what happened to Pizza at McDonald’s?