A Snapshot of Podcasting Today

Podcasting as an artform, a storytelling tool, a news outlet, and a multitude of other uses has exploded into life over the past ten years. A study by Podcast Insights found that there are now over 850,000 shows, with over 30M episodes between them. 

And this explosion comes as a result of ever-expanding audience desire. In 2012, just over 20% of Americans regularly listened to podcasts, whereas by 2019 that number has more than doubled to 51%. On top of that, 80% of regular podcast listeners say they listen to an average of 7 shows a week.

Content consumption on this scale has naturally caught the attention of product builders, who are seeking ways to create more meaningful experiences and commercial revenue from the podcasting space. However, much of the thinking and design of the digital ecosystem behind the creation and flow of podcasting is seemingly defined by one assumption: podcasts are modern-day radio.

In an era where television has been disrupted by on-demand services such as Netflix, Amazon Prime Video, Crave, and Disney+, both builders and listeners often find themselves viewing podcasts as a version of on-demand radio. But is this really the case? Do podcasts really serve the save jobs to be done or desires of their listeners? 

At Connected, we have taken a dive into the podcasting space to gain a deeper understanding of the current ecosystem and begin to identify clear opportunities for innovation. In this article, we focus on providing you, the reader, with a snapshot of the landscape today in order to set the scene for the changes that may come.

The ecosystem today

For any individual or business looking to play in the podcasting space, it is critical to understand the key players that exist within it. By understanding these stakeholders, you can begin to pinpoint your focus onto a specific area and begin to strategically figure out how to deliver impact to your chosen user.

Alongside identifying the key players, our research has also given us a clear view of the end-to-end value chain. Allowing us to map the journey from initial content creation to the ears of the listener.

Phase One: Creator & Publisher

What they do: Creators & Publishers are those who coordinate, record, and then upload a podcast. They create an intimate bond with Listeners as an invited guest into their homes, a partner on their commute, and a consistent voice in their brain. 

Challenge: In the current model, Creators & Publishers are concentrated on distributing and monetizing their content. Whether these players are individuals or businesses, they often find themselves seeking partnerships—profit or non-profit organizations—that can help them achieve a greater reach. 

What’s the missing: An aggregated platform that helps Creators & Publishers uncover the right partnership based on their content and the bond they seek to build with Listeners.

Phase Two: Distributors

What they do: Distributors are the middlemen who help Creators & Publishers get their material to a wider audience through their content management system and other value-add services.

Challenge: Distributors are responsible for the reach of the podcast and need to be at the cutting edge of technological changes to leverage and/or create new channels through which to reach Listeners.

What’s the missing: New platforms that open the podcasting space up to even more people and build communities based around specific Listener wants, desires, and jobs to be done.

Phase Three: Hosting Services

What they do: Hosting Services are the sites that allow Creators & Publishers to upload, store, share, and track the success of their podcasts. For podcasts that are distributed across a variety of sites, the Hosting Service can aggregate the data through RSS feeds for easier digestion. 

Challenge: Because of the value of the data that Hosting Services can generate on a podcast’s audience, they need to find ways of highlighting and storing data that can inform the Creator & Publisher’s strategic answers to the questions of where, when, how often to produce their content, as well as what content they should be producing for their audience. 

What’s the missing: A product that can be applied to podcast content and tailor what individual Listeners or a community of Listeners hears in order to meet their needs and desires.

Phase Four: Listening Platforms

What they do: Listening Platforms are innovative players in the ecosystem who are dedicated to creating new experiences for Listener interaction and distribution. 

Challenge: Because of the lag in technological innovation and the limitations of the current podcast infrastructure, Listening Platforms don’t have the necessary tools to disrupt the current experience and open up new avenues that will move podcasting further away from its on-demand radio positioning. 

What’s the missing: New channels designed specifically for the podcast experience as it is today and that unleashes the potential of what it could be tomorrow.

Phase Five: Advertisers

What they do: Advertisers are the ones responsible for monetizing podcasts by selling ads on the host site, distribution channel, or embedded in the podcast, as well as generating revenue through sponsorships and paid content.

Challenge: Despite funding much of the podcasting ecosystem, Advertisers in the current model are struggling to measure Return on Investment and drive listeners to buy their products or services. This is in large part down to the reality that they don’t necessarily own or have access to the data from either the Distributors or the Hosting Services. 

What’s the missing: Interactive experiences embedded in podcast content that encourages Listeners to interact with the Advertisers brand, rather than dismissing and skipping the messaging.

Phase Six: Listeners

What they do: Listeners, well… listen. They are the audience that creates the value throughout the value chain.

Challenge: The simple challenge is finding content they want to listen to, but more significantly, Listeners are also still establishing the rituals around how, when, and why they engage with podcasts.

What’s the missing: A clear way to cut through all of the noise and find content that they really connect with.

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Realities across the landscape

Alongside mapping the six key players in the current ecosystem, our team also worked to understand the challenges that the podcasting landscape on the whole is struggling to remedy. Due in large part to the explosion in users and the modelling of the ecosystem on an on-demand radio assumption, we have identified three major areas of concern, where innovative thinking needs to be applied.

1. Reality: Technology infrastructure has seen under investment, except in proprietary forms
   Podcasts are still predominantly distributed over RSS (which is over a decade old) or by proprietary forks of RSS. In an emerging sector like podcasting, the need for new infrastructure that works to alleviate the key challenges of each key player in the value chain is critical.
2. Reality: Consumer adoption has outpaced technological progress
   For Creators and Publishers the rate of consumer adoption has meant that the focus across the sector has been on supplying enough content to keep up with demand—61% of Listeners spend more time listening to podcasts than they do watching television. The flip side of this is that the rest of the value chain has followed the same path, investing in output, rather than innovation in order to capture the surge of revenue in the space.
3. Reality: Monetization is negligible in comparison to other media forms, though it’s growing fast
   At present television ad spend surpasses podcasting by over 220x, but podcasting ad spend is expected to triple to $1.6B by 2022. Without investment in the technology and infrastructure of the podcasting space, the additional revenue will simply prop up a system that isn’t solving the key challenges for any of the key players.

The risk to open innovation

There is a preconception around podcasts that is a major risk to open innovation that could shortchange the value chain and stall the progress of the podcasting space: the current view of podcasting as on-demand radio. Each of the challenges that the key players face are reinforced by this view: Creators & Publishers will produce misguided content, Distributors will use the wrong challenges to capture a wider audience, Hosting Services won’t be able to make sense of the data available to them, Advertisers will fail to truly engage the audiences or understand their wants/desires, and Listeners will be frustrated by the rest of the value chain and its inability to understand their jobs to be done. Exactly what podcasting is and what it can be are still fluid, but solidifying its potential comes from disrupting the natural assumptions that come with sound-based content. 

For product builders who seek to build better products, innovating now is the only guarantee that the landscape and ecosystem of podcasting can be designed to work for everyone.

This post is the first in a series on podcasting and was contributed to by a group of Connected’s practitioners: Zachary Oman, Katie Hill, Tim Bettridge, Lisanne Binhammer, Amina Saigol, Kevin Bralten, Ryan King, and Mikkel Lunding.