The music world is seeing a flurry of podcast-related activity with both DSPs and major music companies making huge investments. Eamonn Forde takes a closer look at this music-podcast landscape and speaks to experts in the field about the opportunities and challenges ahead…
We are in the third (or maybe the fourth) major wave of podcasting – but this time it is different. Not only are music companies trying to invest their way to the top, the music DSPs are looking to become both podcasting producers and platforms in their own right. And within that comes not just music’s desire to dominate but also a struggle between music companies and music services as to who will hold the whip hand here.
Podcasts are not new and their origins date back to a (comparatively) simpler time. The etymology of the word “podcast” is attributed to tech writer Ben Hammersley in a piece he wrote for the Guardian in early 2004. The term “podcast” is a portmanteau of “iPod” (then very much the most desirable digital device in the world) and “broadcast”. That was the term that took off, but let’s be thankful it wasn’t one of his other suggested terms in his Guardian feature about this emergent new media form (“audioblogging” and “GuerrillaMedia”) that held sway.
It was radio stations that saw the most immediate benefit. In the UK, the BBC quickly understood this was a new way to package radio shows, while Ricky Gervais was, for a short while, able to parlay his show on Xfm into a spin-off paid podcast. The idea of anyone paying for a podcast now seems incredible, but these truly were different times. Plus there was the additional faff of downloading it and side-loading to your iPod (or other MP3 player) that perhaps shackled its initial impact.
The arrival of the iPhone in 2007 changed things again, with dedicated podcasting apps making it easier to access and manage podcasts – and with that came a new wave of content prospectors hoping this was going to be a digital Klondike.
All through this time, music was just one piece of the content jigsaw and it was really sport, news, politics, comedy, political comedy and (after the staggering success of Serial) true crime that dominated. There were music-led experiments, of course, but in the last few years the music industry has taken steps to dominate here. Acts like Scroobius Pip were early adopters here and others like George Ezra and Jessie Ware (with Table Manners) have seen the many benefits of podcasting.
At the same time, however, Spotify began to regard podcasts not just as an additional form of content but also where the next stage of its growth lay. In February, Spotify co-founder and CEO Daniel Ek said in a blog that the company had, in two years, become the second-largest podcasting platform in the world. “The format is really evolving and while podcasting is still a relatively small business today, I see incredible growth potential for the space and for Spotify in particular,” he wrote. And that’s really what is at the heart of this. Spotify has, with steely determination, invested and acquired its way to this position, snapping up a vast range of podcasting companies like Gimlet Media and Anchor this year (shelling out $340m to do so) and has earmarked a further $500m for podcast acquisitions this year.
“Spotify has, with steely determination, invested and acquired its way to become the second-largest podcasting platform in the world, snapping up a vast range of podcasting companies like Gimlet Media and Anchor this year (shelling out $340m to do so) and has earmarked a further $500m for podcast acquisitions this year.”
“The Spotify mindset is that if they go in, they go in big,” says Kieron Donoghue who now runs Humble Angel Records and was previously VP of global playlists strategy at Warner Music. “Over the past 10 years they have learned to be confident and own the sector.”
There is a definite land grab happening here, he feels, that directly echoes what Spotify has done with playlists – prioritising its in-house playlists and kicking those created by third-party curators, including those from labels and publishers, into the long grass.
“With playlisting, they pushed out all the independent playlists and all the record label playlists and so they just have their own playlists to showcase their editorial now,” he says. “They are following the same path with podcasting – so much so that they are buying up podcasting studios. They can’t do that with music, but they can do it with podcasts. They can acquire the rights to a podcast so it is only available on Spotify. That is the big difference between music and podcasting from their point of view.”
“Spotify are buying up podcasting studios. They can’t do that with music, but they can do it with podcasts. They can acquire the rights to a podcast so it is only available on Spotify. That is the big difference between music and podcasting from their point of view.”
– Kieron Donoghue, Humble Angel Records
The music companies are not, however, taking this lying down. Billboard recently reported on a flurry of partnerships that Sony and Universal were signing with podcasting companies, while Warner has been an early mover here via its Atlantic and Rhino labels.
Tom Mullen is VP of Marketing Catalogue for Atlantic Records in New York and has long been a podcasting evangelist. On Spotify’s strident moves into podcasting, he is diplomatic in his thoughts.
“I am not privy to what Spotify will be doing [in the future],” he says. “The good thing? More people are aware of the word podcasting, more people are comfortable to listen to podcasting, and will hopefully learn more about an artist. I am all for anyone producing podcasts consistently and new ideas or ways to showcase spoken word.”
There are theories that Spotify is going all in on podcasts precisely as this will lower the amount it has to pay out in royalties to labels and publishers. The thinking goes that if Spotify users spend X hours a week listening to podcasts then this translates as X hours of streaming royalties it does not have to pay rightsholders. But in his blog, Ek suggests that one does not negate the other. “Our podcast users spend almost twice the time on the platform, and spend even more time listening to music,” he wrote.
Donoghue also feels podcasting and music can co-exist on the Spotify platform. “One way of looking at it is that they are bringing people into the Spotify platform who wouldn’t have been on it before,” he argues. “These are people who might just only listen to podcasts or are very casual music listeners. Maybe they are bringing in a new audience to the platform – and once they are there, they may drift off and find some music as well.”
He does, however, say that Spotify’s acquisition spree here – as well as its investment in original podcasting like its long-running Secret Genius and Who We Be TALKS_ series as well as major undertakings like the eight-part Stay Free: The Story Of The Clash – has absolutely forced the hand of music companies to also aggressively move into this area.
“With Spotify innovating in the space, the labels are playing catch up a little bit,” he says. “There is no doubt in my mind that there wouldn’t be podcast divisions at the majors if it wasn’t for Spotify making these big and bold moves into podcasting. They [the labels] are all trying to get market share here just as they have with their own playlist brands. They are all trying to establish themselves as podcast creators. The benefit any label has here is they have access to the artist as well, so that’s why you’ll see more artist podcasts come into the mix as part of label deals.”
“There is no doubt in my mind that there wouldn’t be podcast divisions at the majors if it wasn’t for Spotify making these big and bold moves into podcasting. They [the labels] are all trying to get market share here just as they have with their own playlist brands.”
– Kieron Donoghue, Humble Angel Records
For now, it seems, music and podcasts are a promotional marriage rather than a revenue orgy. Any music podcasting managing to “do a Ricky Gervais” in 2019 will remain a pipe dream. There are, for the biggest ones, sponsorship and merchandise opportunities; but it takes a long time to get to the position where your podcast can command significant branding deals and build an audience who want to buy merchandise.
“My job title is based on marketing and I’ve only seen podcasting at this stage of our lifecycle to be a promotional tool and a vehicle to tell our stories,” is how Mullen puts it. “The podcast listener is engaged and attentive – and for sometimes 30-45 minutes! We’ve seen 60% completion rate for our episodes and that’s a huge metric. If we have a fan’s attention for that long about one artist or a specific topic, that means we’re doing something right with our programming, we have the right editing done and the artist’s story is connecting.”
He adds, “I’m sure that advertising and other revenue models will present themselves – but right now, the promotional and marketing opportunities are there and we’re finding the fans and learning about what they want from the data we’re seeing so far to help other facets of the marketing team and label overall.”
“My job title is based on marketing and I’ve only seen podcasting at this stage of our lifecycle to be a promotional tool and a vehicle to tell our stories. I’m sure that advertising and other revenue models will present themselves – but right now, the promotional and marketing opportunities are there.”
– Tom Mullen – VP, Marketing Catalog and Podcasting at Atlantic Records
Mullen makes an interesting parallel with the album world in terms of how people should approach podcasting. This is an investment commitment and development process akin to breaking an artist.
“One main thing people get wrong or misunderstand is how long it can take to gain steam on a podcast,” he says.
“Like a band, sometimes your first album, or season in podcast speak, is figuring out the kinks; or the second album or season [is where] you hit your stride and learn what works. That patience [is key], especially with all the new folks jumping in and seeing the opportunity can’t just think a popular artist, a celebrity host and a bunch of billboards and ads in the subway is going to do it. Maybe for a minute; but if there’s no plan or legs to the idea, it will not last.”
There is even a name for this. “‘Podfading’ is a real term and one that people forget that it’s easy to start, hard to keep going and hardest to keep working at the idea to work on,” Mullen explains. “That takes patience and, right now, I’m seeing more home run swings than working on an idea and getting small wins and learning from that as a group. Finally, if you just equate your downloads to your success, you’re missing so much more and not learning a thing from anyone that does listen.”
Success, really, is ultimately about scale. The majors have the budgets to invest and Spotify is simply spending its way to dominance as a means of ensuring its audience relevance for the next phase of its growth. But for those further down the pecking order, the reality is that podcasting, while nice, is not going to see them make a big podcast investment any time soon.
“For me, as a small independent label, I don’t see the immediate opportunity [to do our own podcast],” says Donoghue. “But if any of our artists are so inclined, and if they feel it would help them further their voice through your podcast, we could facilitate that as it is quite easy to do. If it happens organically from an artist’s point of view, then all well and good. But I wouldn’t necessarily want to put a flag in the ground.”
While significant revenues are not quite there yet for music, there is also an element of driving blind here as play data is not as transparent as it is on services like YouTube, Spotify and SoundCloud.
“Analytics are still a huge pain point,” is Mullen’s blunt summation. “Each platform, provider or aggregator has different stats to go from. You need to look at all of them as one and figure out what that means without cooking the books or sandbagging.”
“Analytics are still a huge pain point. Each platform, provider or aggregator has different stats to go from. You need to look at all of them as one and figure out what that means without cooking the books or sandbagging.”
– Tom Mullen – VP, Marketing Catalog and Podcasting at Atlantic Records
There are, however, some workarounds here. “I love to look at downloads and at the same time look at time listened,” Mullen continues. “On top of that, also how many email sign ups I got, or followers [there are] on the socials, or finding out if we had any uptick in streaming from a share with another podcast that we partnered with. The future has to have consistency because of each podcast juicing them a bit to see what works for their advertisers or what might sound good. We have to be real and we have to be measured in our approach to analytics to not hurt everyone in the future. Be truthful and be real.”
Music podcasts are also ripe for innovation. Rather than exist as something distinct from playlists, the two could meld – where discovery playlist algorithms can serve up music and five-minute sections of podcasts (as teasers for the full thing) in a way where they can comfortably sit cheek by jowl on something like New Music Friday or Discover Weekly.
“You can’t forget that there are so many people that still don’t want to listen or haven’t found one yet to listen to,” says Mullen.“The way we change that is the innovations in the ways we share podcasts. There have been some great strides recently with companies figuring out how to share sections of a podcast easily with someone or the inclusion of additional images related to what’s being discussed. Innovation is on us to keep figuring out what people want along with making it easy to share with someone. Like music, you trust your friend when they suggest a band. Let’s think that way about podcasting and keep making them.”
Over 15 years on – and several waves later – podcasting is arguably in its best shape yet for music. And while there are enormous upsides, there are also still many issues to resolve. The first is monetisation and finding ways to license music into podcasts that don’t come with a series of restrictions like limits on length or the insistence on contextual requirements (such as being used for review or musicological analysis on a podcast like Song Exploder). Data is second, where those who own the rights get visibility on just how far the podcasts travel. And third is ensuring that only the biggest music owners and music services don’t get to storm the castle (what we might call the “podcastle”) and pull the drawbridge up behind them.