Podcasting: An Emerging Industry? (Part 1)

I’m sure many Sound Economics readers regularly use podcasts to get econ-related news and discussion. Personally, I regularly tune in to APM’s Marketplace, NPR’s Planet Money, and and WBUR’s Here and Now. Although podcasts are likely not particularly obscure among our audience, they do not register much with the vast majority of the American public: just 29 percent of Americans had ever listened to a podcast. In fact, the medium is so niche that when This American Life released its podcast-only spin-off show Serial, it provided a special YouTube instructional video on how to use it.

It so happens that that project, Serial, quickly became the most successful podcast ever. According to CNN, Serial is the fastest podcast ever to reach 5 million downloads and each episode has been downloaded upwards of 3.4 million times. Unlike most other podcasts, those numbers are of a range comparable with the audiences drawn by cable programming. Whether Serial’s success is a one-off success or heralds a golden age for podcasting is yet to be seen. However, like when other forms of mass media (such as radio and television) were nascent, podcasting faces a significant barrier to building an audience: it’s hard to convince new consumers to hook themselves in to the medium. This is exactly the problem addressed by the instructional video This American Life released to accompany Serial. Although most consumers have the materials necessary to access podcasts—a smartphone or personal computer and an internet connection—many do not know how to access podcasts or do not know that podcasts exist. Because of this barrier, in the words of an industry insider, “it’s a lot easier to get someone to go from one podcast to another podcast than it is to get them to go from listening to no podcasts to listening to your podcast.” So, any show that draws in significant numbers of new listeners, as Serial seems to have done, can provide a big boost to other podcasts, as well. Further, because of the low cost of consumer (and producer, for that matter) entry into the podcast marketplace, it is very plausible that audiences could grow rapidly under the right circumstances.

So, it seems podcasting is poised for a mainstream-ing revolution. However, as has been the case over its decade-plus long history, it is not unlikely podcasting could remain permanently niche. Although the future of the medium is murky, many interesting dynamics, both well-established and emerging, can be seen in the industry right now. Over the next few weeks, I’ll be writing about the podcast market. Specifically, I hope to touch on various advertising and funding models behind podcasting and about the (surprisingly diverse) types of firms at play in the podcast market.

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