A Few Blockbuster Podcasts Are Making All the Money

🌈 Abstract

The article discusses the rapid growth and commercialization of the podcast industry, with top podcasters like Alex Cooper, Trevor Noah, and Joe Rogan signing lucrative deals with major audio platforms like Spotify and Sirius. It highlights how the industry is evolving from a grassroots medium to one dominated by megastars, with platforms experimenting with new revenue streams like subscriptions, video content, and merchandise. The article also touches on the challenges the industry has faced, such as the impact of Apple's software update and the economic slowdown affecting direct-to-consumer advertisers.

🙋 Q&A

[01] The Podcast Industry's Evolution

1. What are the key changes happening in the podcast industry?

• The podcast industry is transitioning from a grassroots medium to one dominated by megastars who command the most money and biggest audiences
• Top podcasters are signing multimillion-dollar deals with major audio platforms like Spotify and Sirius
• Platforms are experimenting with new revenue streams beyond just ad sales, such as subscriptions, video content, and merchandise
• The industry is moving away from the "simple" model of creating a new podcast, making a deal, and selling ads

2. How are platforms like Spotify and Amazon adapting to the changing industry?

• Spotify is making video versions of popular podcasts and has seen a quarter million podcasters upload video to its service
• Amazon's Wondery podcast unit is seeking more control in deals, aiming to turn top podcasts into hits in other media like film, TV, and books
• Platforms are including provisions in deals to protect themselves from big losses, such as minimum audience targets

3. What challenges has the podcast industry faced recently?

• The industry went through a "boom-and-bust cycle" where platforms made speculative deals that often didn't pay off
• The economic slowdown has affected direct-to-consumer advertisers that had previously anchored the podcast ad business
• Apple's software update hindered the podcast industry's advertising efforts by stopping automatic episode downloads

[02] The Evolving Business Model

1. How is the podcast business model changing?

• The traditional "simple" model of creating a new podcast, making a deal, and selling ads is evolving
• Platforms are now looking to diversify revenue streams beyond just ad sales, including subscriptions, live events, and merchandise
• Talent deals are becoming more structured, with provisions to protect platforms from big losses

2. What new revenue streams are emerging for podcasters?

• Subscriptions, where platforms bundle popular shows for a monthly fee
• Video versions of podcasts, which allow for additional ad revenue
• Live events and merchandise sales

3. How are smaller and less proven podcasters faring in the changing industry?

• Smaller podcasters often don't have lucrative deals and must rely more on merchandise sales and touring
• Many hosts do their podcasts as a side gig and have other jobs to make money