I love speaking with reporters. They’re smart and they see big pictures. It’s a shame so many of them are on deadlines to chronicle the mundane. The other day, I was on a call with a media reporter. She looked like Emma Stone from Easy A and she was smart like Emma’s character. Our chat covered a wide range of things for (what I’m told is) background. Which, is a polite of saying nothing I said was interesting enough to be a story. Until we talked about podcasting. My comment interested me. This is my story.
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Today, radio is considered old. I mean it literally has everything going against it. It’s a mass medium in me-medium era. It’s live when we want our stuff to be on demand. AM — in particular — is low fidelity. Worse, radio doesn’t know who’s listening so the value of its ad are bleh.
But, in it’s day, it was cool. Cool enough to slang up terms like stick to describe antennas.
The other neat thing about radio is it makes money. Yes, even today. Radio made money as an industry. Better, pretty much every radio station makes money. The companies that operate lots of stations make lots of money. iHeartRadio — the biggest radio station owner — made $290 million in the last twelve months. If they didn’t have to pay interest on all those loans, they’d be golden.
One of the things I don’t get about companies today is how they lose money. Spotify has 550 million subscribers. Nearly half (220 million) of them pay about ten bucks a month for the service. Spotify pays artists a pittance. On top of that, they sell ads. Slam dunk money maker — you’d think. No. Spotify lost $300 million last year.
Consider this background for the actual story.
Since I dabble in the audio world for work, I follow a lot of podcasting people. Pod peeps either follow the gourd or the shoe. Gourd types talk about revenue doubling to $2.5b in the past three years. Shoe disciples mention layoffs and the slowing growth of new podcasts.
When the reporter and I got to talking about podcasting, she asked my persuasion. When it comes to podcasting, I’m an atheist. The fundamentals of podcasting should look like radio. Most shows should make money. But, they don’t. Most shows lose money.
Now, it’s fine to lose of money if investors love your brand. Spotify, Peloton, Warby Parker, Allbirds, and hundreds of other companies lose boats loads of money. Investors just give them more. But, if you’re not cool, investors hate you. Spotify is worth $30 billion. iHeartRadio is worth about 2% of that. Yes, iHeart is the one that makes money. Go figure.
Since podcasting has no brand, it gets no love from investors. Which leaves the people who make shows to fend for themselves.
Shows with high-profile people make money. The Obamas and (the former) Price Harry. But, presidents and princes can make money doing anything. The Obamas got $65 mil for their book. Megan and Harry got $20 mil for theirs.
Celebrities pop in, make money, and leave. The Obamas left Spotify for Audible. Interest in the Meghan and Harry show tapered off after episode one. They’re off the air now. Thanks, Matty.
Average Joes not named Rogan don’t make squat podcasting. Let’s say you do a sports podcast in a market with one million people. You do two shows a week and get about ten thousand downloads per show. You’d make $200 to $1000 per episode. After production, promotion, and cuts to advertising agents, you make not much. Maybe less. Only the top 5% of podcasts even get 10k downloads.
Now look at radio. For 100 years, people could make a living with a small radio stick. Or a small TV stick. Or a small cable system. Or a niche magazine. They were small businesses. Emphasis on business. Big groups backed by even bigger money bought the little guys and made them parts of big guys (more on this another day). Those become industries.
Podcasting is not an industry. It’s just one more outlet for people with pre-built audiences to exploit. If you’re a radio station that already produces shows, podcasting is your VCR. If you’re a celeb, pop in, talk a bit, make a few bucks, and leave.
People have always listened to talk. They always will. Ads will pay for the few big shows or will align with the big people. For everyone else, podcasting is nice hobby.