In the second article for our “Business of Audio” series, we are taking a look at the changing business model for podcasts. Following in the footsteps of many publishers who are focusing on a “pivot to paid” this year, some podcasts are also offering subscriber-only, or early access, to podcasts. We examine this shift, the technical solutions available on the market, and best practices from successful premium podcast strategies.
Join us all year as we dig deeper into the financial impact audio can have for publishers, subscribe to our audio mailing list to never miss an update.
Aligning to direct reader revenues trend
We can look back at 2014 as when podcasts really entered the mainstream public conscience, with the premiere of Serial, the founding of Gimlet, and the launch of Apple’s first standalone podcast app. These early podcast efforts were all mainly advertising driven, with some also soliciting donations via Patreon or other platforms.
Now five years in, we are seeing a shift in the core business strategy for many podcasts. We’ve said before that 2019 will be the year more publishers “pivot to paid“, meaning prioritising direct reader revenues over advertising or other revenue streams. But the pivot to paid is more than just direct reader revenues, it also includes listener revenues.
We know how important habit formation is in any retention strategy, and this holds true for audio as well. Until recently, it has been very difficult for publishers to offer premium audio while still allowing listeners to keep the habits they had already formed around audio.
“We think people want to continue using their existing podcast players. Listeners develop strong habits around their podcast apps, and are unlikely to use a second or third app just to get access to bonus content or ad-free versions of one or two shows.” – David Stern, Slate’s vice president of product and business development, interview by Nicholas Quah
Podcast business models
Subscription: The Anfield Wrap is a Liverpool-based podcast company, with a sizeable portion of its audience paying for monthly subscriptions. With over 80,000 listeners for its free shows, they also have 10,000 listeners paying £5 a month for extra audio content. They also stand out for how they’ve faced the technical challenge of offering subscriber-only audio content, rather than relying on third-party services, the team runs their own backend to deliver the shows via an Amazon server.
Early-Access: As part of its retention efforts last year, The New York Times offered episodes of its podcast “Caliphate” a week early to subscribers. Early episodes were available on the Times’ website and app. This podcast, the first narrative nonfiction series from The Times, was selected for the early-access strategy for a few specific reasons. Firstly, it highlights what The New York Times does best: extensive (and expensive) reporting spanning continents. Secondly, each episode ends on a cliffhanger, a motivator for listeners to subscribe and get early access to the next episode. Finally, the podcast was released just after app changes meant the team could actually push early episodes to subscribers within the Times’ app itself. While they have experimented with subscriber-only audio benefits, such as live shows and an anniversary celebration of their hit show “The Daily“, this podcast was the first time they experimented with early-access for subscribers. With the success of Caliphate, we can expect to see more premium audio offerings from The Times, and other publishers.
Member-Only: Podcasts are often a more intimate experience for listeners than the relationship they have with written articles. That’s why the Guardian used a member-only podcast to further create a sense of community for their members. Readers could send in questions, and the team would bring together the relevant journalists to discuss the question. As much as possible, they tried to get the member to also record themselves asking the question for the podcast. This podcast created a “behind-the-scenes” experience for members, both the member asking the question and those who listened in. It also further strengthened the bond members have with the Guardian, as it let them feel like they were having a role in the content production. This member-only podcast is one of the many initiatives the Guardian has launched in their journey to one million paying members.
New technology solutions for paid audio
In the last audio article, we discussed how the difficulties of offering subscriber-only audio had created a massive “customer service challenge” for Slate. They faced a trade off between offering premium audio, or allowing listeners to access the content in the same way they were already accessing all the other audio they listened to.
That’s why last week Slate rolled out “Supporting Cast“, which will let podcasters give listeners their premium content in their preferred app. Currently available for Apple Podcasts, Overcast, Downcast, Pocket Casts, and Podcast Addict, they believe this covers the majority of the market. Supporting Cast is a great opportunity for collaboration in the podcast community, by working together a common issue facing publishers wanting to offer premium audio in a user-friendly way has been solved.
“We hope Supporting Cast will enable more podcasters to build sustainable businesses that let them keep doing what they do best: making great, entertaining, informative shows.” – Press release by Dan Check and David Stern
Substack, the platform for premium newsletters, has also expanded into premium audio with the introduction of Substack Audio earlier this month. For now, they offer the ability to email subscribers audio which can be listened to in the Substack web player, but they’re considering expanding to offer a private feed of episodes to podcast players as well. The web player still offers the ability to listen at 2x the speed, for all those “podcast super listeners” out there.
Subscription audio is nothing new, we’ve seen successful entrance in the field of spoken articles from both Audm and NOA in recent years. But these are both types of digital kiosks for audio, and we’ve seen previously the risks publishers have faced when joining digital kiosks for their written content. In future articles of our “Business of Audio” series, we will examine how publishers can get into the spoken article field without the risks of digital kiosks, subscribe to our audio mailing list to never miss an update.
In June at the GEN Summit, we will be discussing this topic in the session “The Voice Economy: Is the Pivot to Podcast Sustainable?”. Join the conversation, let us know your questions or comments.