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Hot Pod Insider

Insider November 11, 2022 — Why your favorite podcaster feels like a close friend

Plus, Spotify joins a Google pilot program to use its own payment system on Android

Every time I go to LA, I think “this is nice, but I could never live here.” On a rainy day like today in NYC, I think… eh, maybe I could. Plus, the fish tacos are pretty spectacular.

Today, more goods from Hot Pod Summit LA and Spotify’s new payment arrangement with Google.

Podcasting and parasocial relationships

At the Hot Pod Summit, I spoke with Bradley Bond, a communications professor at the University of San Diego, about parasocial relationships and podcasting. And it turns out, we’re all freaks who are hardwired to form emotional attachments to people we see (and hear) in the media. That can be good business for podcasters, but as we saw with the Try Guys debacle, there’s also a downside.

First, the good (or lucrative) side: podcast hosts who foster parasocial relationships can make more money off of ads. “If you can develop, right, the sense of social emotional connection, that the podcaster is your friend, then you’re certainly more likely to take their advice on advertisements, branding, and products,” said Bond.

But listeners who develop these parasocial relationships often project an idealized vision of their favorite hosts. If the host publicly fails to live up to those expectations (like Ned Fulmer, noted wife guy, cheating on his wife), listeners feel personally wronged for having those expectations violated. Bond says that “expectation violation” happens in all relationships, but the one-sided nature of parasocial relationships makes them more fragile.

“When it’s your significant other who violates an expectation, you might be more willing to invest in overcoming that and find ways past that violation,” Bond said. “But when it’s your favorite podcaster, there are hundreds of millions of other options potentially for you to turn to.”

So podcasters need to maintain a delicate balance: foster a personal connection without ever letting it get too messy (à la Ned). And for the rest of us, it’s good to remember that media personalities are not actually our friends. Brian Lehrer is not, in reality, my wise uncle with his thumb on the pulse of civic life in New York City. He is just a nice man on the radio (with his thumb on the pulse of civic life in New York City).

Podcast subscriptions have boomed — will that continue during a recession?

We were very lucky to have Hot Pod godfather Nicholas Quah join us to host a panel on podcast subscriptions, where he was joined by Sarah Penna, head of creator partnerships at Patreon, and Neel Ketkar, head of product at Wondery. Both companies have seen major growth in podcast subscriptions — Wondery, with its Wondery Plus service that offers exclusive and early access to its shows, and Patreon as a platform for popular independent shows like Maintenance Phase and Chapo Trap House

But that growth came during economic boom times — and as Quah pointed out, people can quickly rack up subscriptions across video and audio streaming. “It’s a lot of fucking money,” he said. “We’re about to walk through the recession — I don’t know if folks want to pay more. I think they’ll be tightening their budgets soon.”

Ketkar said that Wondery is not especially reliant on subscriptions. The subscription business has been successful so far and brings in a lot more money per listener than ads, but advertising is still the core of the business. “The economics of the subscription — if you’re adding it onto an ad supported business — are pretty favorable,” said Ketkar. “It’s not like a business like ours needs to convert 75 percent of people to have listeners to a subscription. You can convert a small percentage in order to make this all make sense.”

For her part, Penna said that Patreon expects listeners to keep supporting creators, especially during an economic downturn. “We don’t know what user behavior is going to be, but we believe that, in hard times, people want to support artists. And they will,” she said. “And we make it easy to make the price point at a place where it’s an easy yes.”

I think Penna and Ketkar were being kind of evasive: of course subs will be among the first things people cut if the financial situation gets worse. But to Penna’s point, individual creator subscriptions could fare better. The $3 a month I pay for The Bowery Boys (a very good NYC history podcast!!) feels absolutely worth it, and I would rather that money go to Greg and Tom than Jeff Bezos.

Spotify is participating in Google’s User Choice Billing pilot program

Spotify is one of the first companies to sign up for Google’s User Choice Billing pilot program, which will allow apps to use their own payment systems on Android instead of Google’s. My Verge colleague Chris Welch reports that Google will still take a cut for payments that are processed, but the fee will be reduced by 4 percent if users choose Spotify’s payment system rather than Google’s.

“Going forward, Android users will soon be able to choose how to pay for their Spotify subscription in the way that best suits them,” Spotify wrote in a news post. “Spotify has been publicly advocating for platform fairness and expanded payment options for years. We believe that fair and open platforms enable better, frictionless consumer experiences that also empower developers to imagine, innovate, and thrive.”

The move comes while Spotify is in a particularly nasty fight with Apple over rules about in-app audiobook sales. After trying to find a way to allow listeners to buy audiobooks through the app (which was clunky to begin with), Spotify had to remove that function, forcing users to go to a web browser (gasp!) to buy their titles. 

Even if the new deal with Google doesn’t solve Spotify’s audiobook problem, it’s still a way to make Apple look bad (and keep an extra 4 percent on payments).

That’s it for this week — have a great weekend!