Business Maverick

BUSINESS MAVERICK

Listen up: There is profit in podcasting

Iono.fm is an online audio platform providing podcast and audio live streaming services. Podcast listeners in South Africa jumped by 50% in 2018, and the medium has become the fastest growing sector of media consumption in the country. (Image supplied)

It has never been easier or cheaper to start an online radio show or a podcast. There are already 700,000 podcast producers around the world. There is no red tape, and legacy issues of analogue don’t apply. But most importantly, there is money to be made.

Podcasting is finally gaining mass-market appeal, more than 15 years after its inception. More than 475 million people are actively listening to podcasts around the world, according to the Reuters Institute Digital News Report.

The report predicts that the worldwide podcast audience is set to top the 1 billion mark by 2022, jumping to 1.3 billion users by the end of the following year.

The appeal of the podcast is pretty simple. It is easy to access, you can choose what you listen to and you can do so where and whenever you want.

It all started when former MTV video jockey Adam Curry wanted internet radio broadcasts to automatically download to his iPod. So in 2004, he created an application called iPodder to do just that. Curry now hosts a show called The Daily Source Code, one of the most popular podcasts on the web. A couple of tweaks and a few developers later the podcast was born.

But people only really started paying attention in 2014 when the investigative journalism series Serial took the market by storm. It became world-famous. It was also the year that CliffCentral.com was launched in South Africa. It was the country’s first pure podcast portal and it helped that Gareth Cliff was well known.

Four years later, and according to popular podcast host Matt Brown, podcast listeners in South Africa jumped by 50% in 2018, and the medium has become the fastest-growing sector of media consumption in the country.

Brown released The South African Podcast Media Consumption Research Data, Trends & Analysis Report last year, which revealed the current addressable market for podcasting in the country is around 16 million people.

We believe there’s a very specific reason why there’s such a large addressable market, and it comes down to our demographics: With such a rich, diverse culture, consumers are looking for media that speaks directly to them,” he said.

In fact, according to the report, most South Africans don’t listen to podcasts simply because they don’t know how to access them on their phones, which means education is a key factor in growing local audiences.

As the audience expands, here and offshore, more technology companies are hosting and distributing podcasts than ever before, joining the likes of Stitcher, Castbox, iTunes, and Soundcloud.

This year, the music streaming service Spotify acquired podcast producer Gimlet Media, and two new subscription platforms – Luminary and Brew – were launched. Also, Google allowed iOS and desktop users to take advantage of its listening interface. The Podcast app for Android was launched late in 2018.

Spotify entered the SA market at the beginning of 2018.

The South African chapter includes the better-known iono.fm, with a quick Google search adding Lutcha and Podcast Studio to the list.

iono.fm was launched in 2008 by the current CEO, Ryan Dingley, and COO, Francois Retief and CTO Leon Nortjé.

Dingley came up with the idea while stuck in traffic during his daily commute to work. He had time to kill and only local radio to keep him company. It bothered him that he couldn’t revisit the shows he enjoyed or reference something he might have missed.

So we built a platform to allow access to such content by integrating it to the back-end of broadcasters to give it a second life. And so we made it available to listeners after the fact,” Dingley says.

But we had to sell it to radio stations. Make it worth their while,” he adds. The team then created an advertising engine around the platform.

It allowed advertising campaigns to be inserted to the content, something traditional websites and other digital platforms did not support at the time.

More importantly, the new platform allowed for a reliable way to track and report on the demographics of their user base.

Today iono.fm plays host to all the mainstream broadcasters’ podcast profiles, with the exception of Primedia.

Commercial radio stations upload more files to the local podcast universe than anyone else.

Retief says up to 20,000 audio files are uploaded to their site per month by registered users. In 2018, iono.fm logged 4.2 million unique South African users across an array of member content providers. That is over and above international users. 

They also host podcasts from individuals, corporates and media houses.

Contributions originate from all around the world and recordings are on topics ranging from sports to politics; business to religion and even comedy shows. Submissions cover an array of languages as well. The range is vast.

At the Radio Days Africa conference presented by the Wits Radio Academy on Thursday 4 July, radio futurologist James Cridland said that although radio stations dominate the space, they are not taking full advantage of its benefits.

There are radio studios to hire out; content-makers to nurture; commissions to earn on ads and sponsors to entertain,” he says.

Reformatting broadcast audio for podcast use is also an opportunity; but producing good, local non-broadcast content that might attract a different audience might also work well.

Podcasts are also different in nuance: they’re deliberately chosen and requested. Given that they’re speech, rather than music, they typically have the full attention of the listener. They’re mostly enjoyed on headphones, rather than speakers. It’s a very different listening behaviour.”

There is a gap, however, that local publishers are perfectly positioned to fill. Their foreign counterparts are already doing it, with some success. And like many global business publications, in recent years they also need to shift away from a reliance on advertising to growing subscription revenue.

For The Economist, podcasts serve the dual purpose of helping attract and retain subscribers, while the audio advertising pays enough to cover the production costs. Sitting outside the paywall are The Economist’s four podcasts, which average 7 million streams per month.

The Guardian, Washington Post, Politiken, AftenPosten, The Economist, and the Financial Times are among dozens of publishers to have launched daily podcasts in the past year, according to the Reuters report. This follows the runaway success of The Daily from the New York Times, which has about five million daily listeners, is rebroadcast on public radio and is about to get a video spin-off series.

Locally, Tiso Blackstar and Caxton publications have entered the fray. Soccer Laduma, however, is South Africa’s success story. It is the country’s highest-selling sports publication and has managed to replicate that success with audio. Its bi-weekly podcast, Soccer Laduma, has already broken the 10 million download mark and averages more than 100,000 downloads per show.

Corporate contributors like Discovery, Sanlam and Investec are also making their mark.

Retief says the “CRM rates for such offerings are high. Some industries like technology have also proved popular.” He says this indicates that certain content sets are making the grade and have been successful in monetising their offerings.

He says the financial industry has taken an interest in high-profile business show presenters, especially those with large followings. Technology companies are doing the same with content providers relevant to their business.

Aside from raw listener numbers, the richer data and analytics provided by podcast platforms go beyond the figures, and this appeals to advertising agencies.

Traditional radio is measured by recruiting a sample of listeners, and the sample sizes and the research process can be unpredictable.

Furthermore, as regulation limits big data to target ads to individual demographics, the value of podcast profile data becomes a lot more valuable.

The bad news is that, given the number of podcasts that are being produced, more content is competing for the same revenue pie. The good news is that the pie is getting bigger.

Global podcasting ad revenue reached $911-million in 2018. That was up more than 60% on the previous year.

Although it remained just a fraction of traditional radio advertising’s $31.8-billion, it is a vast improvement on the 2013 figures, when podcasting ad sales were still nascent, totalling $45-million, compared to the $40.2-billion radio ad sales market.

According to PwC’s Global Entertainment & Media Outlook 2018-2022, podcast ad revenues will grow at 29.7% compound annual growth rate to $1.6-billion in 2022.

So the question is: How do publishers position their podcasts to tap into that? BM

Gallery