Interviewer: Chris Sutcliffe
Chris: What spurred the team to do a news podcast report in the first place?
Nic: I think it is probably the hottest topic right now in media. I mean, when I go to conferences, the first question is almost always about podcasting.
Secondly, I love audio. I started off in radio, actually. And the reason I got into media was because I love listening to radio, I wanted to be part of it. So I think I’ve always been interested in audio. And, I’m just really excited to see digital audio take off.
And I genuinely think we’re at the sort of start of a new golden age of audio, in many, many different forms, as radio itself starts to get disrupted – or the way we’ve traditionally thought about radio starts to get disrupted.
It’s interesting, actually, that the report demonstrates there was this kind of explosion in the number of news podcasts around 2015. So why is that, and how do you think that’s going to play out at the start of this new golden age, as you said?
Yeah, I mean, I think sort of 2014/2015 is when people sort of think about it, I actually helped to start the BBC’s podcasts something like 15 years ago, and that was quite a thing. We put them online and they did incredibly well. And then everything sort of plateaued until about 2014.
I think what happened there was, partly Apple put the podcast app as default on iPhones. So that gave a huge boost, of course, and then you had Serial, which really sparked a chord and showed people that it didn’t have to be radio programmes, you could create these episodic audio events that you had to come back for, because you wanted to know what happened next. And that just sparked a lot more interest, this sort of second wave if you like.
You actually cite a couple of examples in the report. You talk about Dr. Death, which I know that me and my girlfriend were both hooked on all the way through. What is it about the episodic format then do you think appeals to the sensibilities of people who are producing traditionally news content?
I think from a listener point of view, it’s the same as a Netflix drama, isn’t it? It’s essentially high production values, it’s about suspense, it’s about character, plot, all of these things are sort of built into audio. And apart from radio dramas, we didn’t really have that in radio.
So I think that’s opening up a lot of new creative possibilities, but I think audiences love that as well, because it’s entertaining. It’s fun. You’re not listening to podcasts as a chore. These things are genuinely stimulating and you just can’t wait for more.
What really suck out for me early on in the report is the disparity between the number of news podcasts and the amount of listenership that the news genre actually gets – was it 6% of podcasts are news but they make up more than a fifth of listenership?
It’s something like that, yeah. So that’s why we were really quite interested in comparing the supply and the consumption side. So 6% of all of the Apple directories, so that’s 770,000 podcasts are news. So a relatively small number of news podcasts, but definitely punching above their weight.
So 21% of the top episodes in the Apple charts are categorised as news. I think in the UK it’s a little bit lower, it’s about 16%. And a country like France it’s about a third.
And I think that just really speaks to the fact that news is important generally, people use a lot of news elsewhere, but historically in podcasts, news hasn’t really been part of that picture. So maybe Serial kind of things, but ‘news’ news, that really is new. And that dates back to The Daily and the arrival of these daily news podcasts
So what then about the daily news podcast do you think is responsible for that disparity between news podcast numbers and actual listening numbers? Is it the fact that they do get people back in regularly, they associate with a brand? I’m sure there’s any number of theories. But why do you think that is?
Yeah, I think it’s the stickiness, it’s the habit building. Again, I think it’s also the way in which, particularly the deep dive daily podcasts are constructed. So it’s not just about telling you the news. It’s about really helping you understand the topic, but it’s also plot driven.
People talk about narrative storytelling. So when you listen to one of these things, it’s got this sort of hook at the beginning. It often starts with a character, with a person, it brings that person to life. It’s got a little bit of a mystery at the beginning, which then unfolds as the thing goes on. So I think all of those things, and they are incredibly sticky.
I mean, in the publishers we talked to, it’s something like the completion rate is somewhere between 60 and 90%. The Guardian was saying 80% for their Today In Focus podcast, for example. People are typically, according to the publishers, listening to two or three, or sometimes four, on average of the five podcasts that there are during the week.
So definitely habit forming, definitely sticky, and entertaining, which I think is the key.
I mean, I’ve been a big podcast booster, like yourself for the last couple years. And those stats take me by surprise, I didn’t think that there would be anywhere near that number of people who are so invested day after day after day!
I suppose the key question is, are they going to continue to be? So is it you know, just a small section of people who are very interested in news, and then once you’ve got all those people, and once the sort of supply of them is increasing as it is every week, is that growth still going to continue? And I think that’s the big question for the daily news podcasts.
But I think in audio generally, there’s huge opportunity.
And you mentioned this deep dive podcast before, I think you categorise news podcasts into three different categories?
So we identified, we basically were just looking at five countries, so UK, US, France, Sweden, Australia. And in those we basically went through and looked at native podcasts, so this is not catch up radio, but this is native, made for the medium.
Then we identified 60 of these and we categorised them into short form, one to six minutes, this is like, the thing you might ask your Alexa speaker; give me the news and it gives you 1, 2, 3 minutes maybe.
Then in the middle, you’ve got shorter daily news updates, so things like FT Business Briefing, you’ve got Up First, which is NPR’s very successful podcast in the US that has around a million listeners, and that’s on maybe a number of different subjects.
And then you’ve got things like The Daily which is really doing one subject in depth, or Today In Focus actually does two subjects, but it does one in depth and then a short one. And that seems to be slightly the more dominant of the three types, and certainly one of the most successful in the UK and the US.
So the success of The Daily, I remember seeing Mark Thompson talk about this at the World News Media Congress, and how they initially promised their sponsor, their original sponsor for it, listener numbers which they surpassed by about five times or something, they blew past their initial targets. So I mean, do you think that having seen The Daily, there’s been an element of ‘follow the leader’ in terms of what other news publishers are doing with that? Or have we seen a lot of experimentation in and around the news podcast form, and the format, and what that actually sounds like?
Yes, there’s definitely a certain amount of copying going on, or let’s call it inspiration. So I talked to lots of publishers who just started a daily news podcast. So for example, La Parisien in France, Today In Focus, they all basically said they were inspired by The Daily, or a lot of those ones that are doing the deep deep dive, and they referenced it directly, they said they’d listened to it. And they’ve maybe slightly adapted the format.
But they’ve looked at that success and said; ‘There’s nothing like this in our country, for example. So could we get that first mover advantage by just learning what the New York Times has already learned, that people are looking for that kind of depth?’
And if you do it in a particular way, with narrative storytelling techniques, you use music really well to create mood, then that is something that we think can travel internationally, and certainly in the ones that have launched, they do seem to be striking a chord pretty much everywhere. So I think it’s definitely a good format.
Other people are actually specifically saying, we don’t want to do what the New York Times is doing, because The New York Times has defined the market in the US. So the Washington Post said specifically, ‘We’re not going to do one topic. We’re doing three topics, and we’re going to aim it at the evening, not the morning because partly, it speaks to our brand and the fact we cover lots of different stories, and that’s what we’re known for.’
And similarly The Economist said, ‘Well, we’re going to be global. And we want to show the range and diversity of everything that we’ve got in in the publication.’ So again, they went for a format that had more than one story. So there are definitely people thinking differently. But a lot of people are also trying to do what the New York Times did, but just in a different country.
So you said there that you’ve seen a lot of people who are saying that they definitely didn’t want to be doing what the NYT was doing, they wanted to be doing their own thing. So I’m thinking in terms of what Reach are doing with Laudable, and where The Guardian’s positioning its own audio as a core tenet of its membership proposition. So what’s your sense then of how important podcasting is going to be to publishers over the next couple of years? Is it going to increase? Is it still going to be one of those things that publishers take a punt on, or is it going to be integral?
I think it’s going to be integral. I mean, if you think about the underlying drivers of this, the consumer drivers of it, it’s obviously driven by younger people, and publishers are really looking and finding it hard to reach and engage younger audiences.
They’re also looking for revenue opportunities. And we’ve seen advertisers starting certainly in the US and the UK really getting stuck into podcasting, and putting a lot more of their budgets into podcasting. And the whole industry is thinking about, how do we create loyalty, and how to create habit.
As we’ve already talked about, audio is just a great way of doing that. The Daily and the New York Times talk about 25 minutes a day with a medium that previously we didn’t use, it’s the new front page, we have 25 minutes a day with people. That kind of engagement is fantastic. And that’s what other publishers are finding as well.
So I think those are really the core reasons which are driving this change.
You mentioned young people there as this kind of antidote to the perception that young people aren’t interested in news. They are, it just has to be in the right format for them, it has to match their own consumption habits.
Exactly. I mean, that’s why the search for the right formats – and we did a report last year, earlier this year actually, on younger people and their core attitudes – so it’s not news, it’s about how do you create content that is interesting, engaging, fun, but is also meaningful? And to me, that’s where the daily news podcasts are hitting all those spots at once.
Yeah, certainly. And actually, I think that the stats that Spotify has released, I think it was just today, does bear that out in terms of the proportion of listenership on podcasting on their platform is increasing quarter on quarter quite ridiculously, and that is a lot of young people driving that growth!
Younger people and different demographics with Spotify as well. And we asked in the digital news report, why you’re using podcasting and younger people in particular, a lot of it was, ‘I’m bored with my playlist. So I want something else to do.’ So they’re plugged in all the time.
And we often talk about engagement as being a stepping point on to revenue, as it should be. So where are publishers placing their chips in terms of actually generating revenue from their podcasts?
Right, so it’s primarily still advertising and sponsorship, but as you say, it’s got much more sophisticated. We’re starting to get programmatic. Podcasting was traditionally host reads and direct response, and now we’re seeing blue chip advertisers coming in and being very interested. So there’s huge amount of change going on there.
And I think as that change goes on, the real question is, is that going to annoy listeners? Is the advertising density going to get too big? Is the noise starting? Is it going to affect the creativity of the content itself?
So it’s interesting that within daily news podcasts, they have neutral voices as opposed to host reads. So they tend not to have jingly jangly spot ads that just are dropped in, because you’re creating this sort of narrative story. And so they’re trying to do advertising more sympathetically. And I think that’s going to be hard to sustain as the thing scales.
So you’re starting to hear more generic ads just being chucked into different podcasts at different points, and if that becomes too intrusive, I think that’s going to be an increasing issue.
Yeah, certainly, I noticed you mentioned that in one of the initial releases, and anecdotally – in fact, it’s not even anecdotally, it’s personally – when I’m listening to a podcast and I don’t get a host read ad when it’s clearly something has been dropped in, it’s interruptive in the way that people initially said that the great strength of podcast advertising was that it would not be interruptive to that extent.
The ads are absolutely coming in, the the demand is there. And in the US and the UK, the daily news podcasts are making significant amounts of money for the really big ones.
For the smaller ones, they’re not yet making money in themselves, and definitely not in smaller countries. But there are other benefits: the loyalty benefits, the fact that you can advertise other things, you can attract new audiences to your brand, and then bring them into your subscription world, or sell them ecommerce…all of these things are starting to happen as well.
And then of course, for others, it’s about selling tickets. So there are some people who make absolutely no money from the podcast themselves, but they do these live shows. I think the Guardian a few years ago sold out the Palladium for its football podcast, for example.
But I was talking to some podcasters in Kenya recently who make no money at all from advertising because there’s no money in podcast advertising in Kenya, but they sell out once a month these shows in Kenya, or around Africa, and that’s how they make the money.
God, we shouldn’t have given away tickets to our 100th episode for free then!
And you gave away the free wine, right?! So it cost you.
Yeah! So what then would be the significant impediments to podcast growth, and really making them valuable for publishers? I know that you flagged up the fact that they are concerned maybe that they’re actually building a value proposition for platforms rather than actually building it for themselves.
Yeah, some of the publishers I talked to were worried about… so at the moment they either sell directly or they’re selling through organisations who represent their interests, like Acast, so these sort of intermediaries, and there’s quite a good balance between them. So the publishers are really selling around the context of that particular episode.
But what we’ve seen elsewhere is that instead, ads are sold much more generically by audience. So you go to Spotify, for example, and you say, I want this particular demographic. And so it just becomes easier to buy through Spotify. And then the publisher gets less of the revenue share. This is what we’ve seen elsewhere. So that’s one of the worries.
The other worry is just if you have one or two dominant platforms, then how do you get prominence? You’re working through an intermediary, you don’t have that direct connection, you don’t have the data; all the same problems that we’ve been around many times before with platforms are starting to emerge with platforms where previously it was all about Apple and open access, and now we’re going to be into a completely different world, I think.
Yeah, certainly. What do you think then about the viability of things like Luminary which aim to be that Netflix for podcasts? Is that something that you think consumers will accept, that change from open access to subscribing to a catalogue of podcasts?
Most of the people I talked to were deeply sceptical about whether these would work. And they didn’t think that audio was like Netflix, you know, it’s not just Luminary, there’s Himalaya, in the US, there’s [Pedimo] just started in Denmark and Germany, you’ve got Madeleine and Scible, in France.
So we talked to quite a few of these, and they do have these big ambitions. And it’s about signing up exclusive content in the first place. So you’ve got to have that, it’s a bit like Netflix when it started, there wasn’t really quite enough of a proposition. So they’re giving away a lot of this stuff for free right now. And they’ve got to persuade publishers and content owners to put their content with them, even though they’re going to get less of a hit in the short term.
So it’s a really hard sell right now to get these things off the ground, and it’s not really going to work for news because that’s going to be much more commoditised, you need the reach.
But I think we are definitely moving into a world where you’re going to have more originals, more paid for content, more content in premium layers, like Spotify, for example, with its Spotify originals.
And so there will be models other than sponsorship and advertising. There will also be revenue share based on subscription income, and it’s going to be interesting to see how those smaller players fit with the Spotifys or the Pandoras of this world.