NEW YORK, United States — Creating a successful podcast requires a huge investment of creative and financial resources, not to mention time. “It seems simple. It seems like you just have a reporter and you just sit down with someone in a quiet room and you just go at it, but it’s so much more than that,” said Refinery29 Global Editor-in-Chief and Co-Founder Christene Barberich, who’s hosted six seasons of the publication’s Unstyled podcast, an interview show with Barberich as a sort of fashion-world Terry Gross. Her guests are boldface names like Shailene Woodley and Chelsea Handler, along with media and fashion influencers like Rachel Comey and Laura Brown.
Barberich wants her guests to open up about the struggles faced by generations of women, like switching careers in mid-life and dealing with grief. She describes the work, which she does in addition to her editor responsibilities, as “painstaking.” Producing the show requires a team of five in addition to Barberich. They compile copious research on each guest before recording, and then listen to each 35-minute show three or four times to get the edit right. The reward has been an intimate connection with the audience, and a new revenue stream for Refinery29. Aerie sponsored the third season of the show after a rep from the brand sat in on Barberich’s interview with Yara Shahidi; subsequent sponsors have included Chanel and Estée Lauder. The show has received 1.4 million organic downloads and grown revenue 150 percent year over year, though a spokesman declined to say whether the show is profitable.
The audience is large and growing, affluent and young.
It’s no surprise that podcasts hold a lot of appeal for media companies. The audience is large and growing, affluent and young. About 90 million Americans, or 32 percent of the US population aged 12 and up, listened to at least one podcast monthly in 2019, up from 26 percent in 2018, according to Edison Research. Thirty-nine percent of monthly podcast listeners in the US are 18 to 34, while 35 percent are 35 to 54. Forty-one percent of monthly listeners earn above $75,000, and 29 percent earn more than $100,000. Podcast listeners will also gladly spend 30 minutes listening to an episode – ads included – and are much less likely to bounce in seconds the way people often do from online videos or articles with a clickbait headlines.
The bad news is that there are a lot of podcasts out there — more than 850,000 available through Apple alone. And the competition is only going to get stiffer as giants in the audio space bet on a future in podcasting. Last year, Spotify acquired three podcast companies, including Gimlet Media, most likely because the margins in podcasting are higher than those in music streaming. This could be good for podcast-inclined publishers, because companies like Spotify, in order to broaden their market footprint, could start buying shows from print media brands that wouldn’t be able to afford to produce them otherwise. Then again, publishers will also compete in this space with celebrities and influencers. (Amazon’s Audible recently announced it would exclusively release Colin Kaepernick’s memoir).
The struggle for many media brands, especially those in the lifestyle space, will be creating a quality product. Podcasting, as fans of in-depth, reported shows like This American Life know, is the opposite of writing posts for clicks from Google. In addition to the journalistic chops required, publishers need to find production partners who specialise in audio. “A lot of times people think, ‘Oh, we're in media, we're writers, we know how to tell stories.’ [Podcasting is] very, very different,” said Jeremy Helton, a podcast marketing consultant. “It’s really important to go outside of your organisation and find someone that has experience in production.”
Cost is another challenge. Podcast producers say the typical price of a high-quality eight-episode season of a show is easily six figures. (Producers also recommend new podcasters start with one season of something, versus planning to do an infinite run, because people are usually caught off guard by how intense making a show really is.) Some companies, like Acast, will match shows with advertisers, which can at least get the cost of a first season covered.
If you build it, they will not come. That is not a thing in podcasting.
But in today’s saturated landscape, a show is highly unlikely to break out without a budget for advertising a show on other podcasts. “If you build it, they will not come. That is not a thing in podcasting. You have to go find the audience,” said Kara Silverman, founder of marketing firm Various & Co. and the former head of marketing for Acast.
The media world’s biggest podcast hit is The New York Times’ The Daily. A recent New York magazine article about the show described its gruelling production process, involving staff on two continents, working hours that can start at 9:30 a.m. and run to 4:30 a.m. the next day, and a staff of 16 people. But, with 2 million downloads an episode, and podcasting’s high CPMs of $18 to $27, the show is a financial success.
The podcasting ad market is growing, too. IAB projects podcast ad revenue to reach $1 billion in 2021, up from $678.7 million in 2019. Though this figure is a minuscule portion of overall digital ad spend, projected by eMarketer to hit $172 billion in 2021, it’s something to the magazine industry, which saw ad spends across print and digital decline 12 percent from 2018 to 2019 to $13.64 billion. Podcasting probably won’t save a fashion media brand, but could – if done right – represent a healthy slice of its overall revenue. (Though podcast subscriptions through companies like Luminary are now a thing, they don’t seem to be working.)
But, for many risk-averse media executives facing declining ad revenue, podcasting will be a hard business to build. Rafat Ali, chief executive of the travel industry site Skift, thinks podcasting will continue to be an important part of the cultural zeitgeist, but doesn’t see it as a long-term business opportunity. Like movies, podcasting is “a hits business,” he said, noting this doesn’t work for media companies that need consistent revenue. “It’s a lot of heavy lift for hit or miss business.”