In Tuesday’s newsletter, Nick linked to this fascinating report from APM’s Marketplace about China’s $7bn “FOMO industry,” in which a substantial portion of its revenue coming from paid-for podcast subscriptions. Obviously, that data point caught my attention, since it suggested that audio production and monetisation could well be developing in a very different way in China compared to the English-speaking world, so I figured I’d dig into it a little more.
First, a partial overview of the Chinese on-demand audio scene. I spoke to a few people who live, work, and listen to podcasts in China, and everyone emphasised just how new the medium’s popularity is — particularly when compared to the US. Apple’s iTunes, a massive driver of podcast-growth and access in the English-speaking world from when it added podcasts in 2005, didn’t launch in China until 2009. That said, podcast listenership data for China was a bit difficult to track down, but this research from 2016 suggests that about 72 million people there (or 5 per cent of the population) were listening to “mobile radio” that year. However, that term could refer a mix of formats: streaming radio, on-demand audio, and so on. Worth noting: that same research found that audiobooks account for a quarter of China’s online audio content.
My contacts suggested a few factors that could explain the different pattern of consumption in China. Chief among them is censorship: the restrictions imposed by the National Radio and Television Administration (NRTA), a government department tasked with censoring any publications or broadcasts that risks subversion of state authority, has made it very difficult for audio journalism to flourish in the way that it has elsewhere in the world — although there are of course journalists there doing vital work under difficult circumstances. On a more day-to-day level, far more people in China travel to work on public transport than in the US, and are therefore free to watch video content on their devices rather than needing audio-based entertainment that is safe to consume while on the road, so the captive commuting audience for audio isn’t there in quite the same way.
Perhaps because of the lack of current affairs or political audio content, educational and self-help strands seem to have expanded to fill the vacuum. There’s an entire industry built around these subject areas, and podcasting is just one aspect of how it has grown — it seems to me that the products offered in this area by companies and apps like Ximalaya FM, Zhihu, Dedao and Fenda sit somewhere in between audiobooks, MOOCs, influencers’ social media feeds, and on-demand audio. US-based digital business analyst Ray Wang told CGTN America, an English language arm of Chinese state television, at the start of this year that “health, being successful at work, and getting into good schools and universities” were the most popular topics covered.
A key milestone in the development of the subscription model for these self-help or educational audio courses was the introduction of reliable micropayment systems around 2013. As to why people are willing to pay for podcast-like content in China, I thought this quote from the Marketplace report was insightful:
“People may not be purchasing knowledge to learn, but the simple act of buying information online helps alleviate people’s anxiety about their knowledge gap and gives people a sense of security that they are not left behind,” a report by a research institute under state-owned newspaper the People’s Daily said.
In his interview in January, Wang explained that a situation in which professionals were “cash rich but time poor,” encouraged to be ambitious, and faced with a fragmented system of state education had all lead to a rise in interest in paying for quality resources for learning alone. An increasingly competitive job market and globalised economy has turned people towards the “pay for knowledge” model. Copyright and IP laws are also far less stringent in China, meaning that content often ends up pirated and duplicated all over the place. To combat this and keep control of their product, platforms like Ximalaya FM and Dedao have ended up bringing talent inhouse, working with academics, media personalities and influencers to create premium educational content that then stays behind a paywall and accessible only to subscribers.
One of the most successful podcasts under this model, cited by the Marketplace report, is hosted by a media professor called Zheng Wei, and titled “How to make your voice more attractive”. As seems to be typical for these shows, it addresses a very specific self-improvement need: this one is designed to appeal to white-collar workers originally from rural areas who now want to succeed in big cities (in part by shedding a non-metropolitan accent). It has over 200,000 subscribers, who pay around $3 for access to the show. The platform it appears on, Dedao, launched in 2016, and as of last year had 1.5 million users. According to this article, it offers those who sign up to deliver an educational podcast a guaranteed annual salary of $145,000 as a way of ensuring loyalty and quality.
While this is all very interesting, I’m not sure that it really tells us that much about podcasting, per se, since it’s serving a niche caused by a particular set of cultural and economic circumstances. Audio is the medium through which this material is being distributed, but I think that’s incidental to why it’s bringing in revenue. Rather, I think this is perhaps better compared to something like paid-for video course platform Skillshare, or the huge sales self-help books attract. The short audiobook-first deals that Audible has done with authors like Michael Lewis are also comparable; if we’re going to see anything like this subscription-supported podcasting boom in the English-speaking audio world, I suspect it would start with a rapid expansion of similar arrangements.