Podcasts are still booming, but problems with diversity and advertising loom
Podcasting is continuing to grow even as it faces challenges such as lack of diversity and the possibility of an advertising slump.
That's the conclusion of a new report on the state of podcasting from the Knight Foundation, which has invested heavily in the burgeoning medium in recent years. The report, which is based on more than 60 interviews with experts, points to a growing industry that nonetheless faces big obstacles as it expands into the mainstream.
"The runaway success of the podcast 'Serial,' which originated within the public radio show 'This American Life,' helped spark interest in the medium, which is reaching new audiences, giving rise to new voices and creating new revenue streams," the report says.
Who's listening to podcasts? About 155 million Americans over the age of 12 listen to some form of online radio, according to a survey conducted by Edison Research in January and February 2016. Of that group, about 57 million had listened to a podcasts during that period. In general, podcast listeners skew to the low 30s — far lower than the average listener for NPR's flagship programs.
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This may not be great news for terrestrial public radio. Once individuals begin listening to podcasts, their use of linear radio declines by more than half, a stat the report attributes to millennials' propensity to listen on the own terms.
At least one big news organization has been caught wrong-footed by the podcast boom. The public radio system, which faces competition from companies like Gimlet Media, Panoply, Earwolf and Maximum Fun, is not especially well-positioned to compete, according to the report.
This is complicated by the reality that local podcasts don't always attain enough listeners to become self-sustaining, according to the report. Local news, however, could be a bright spot.
"...For the most part it is difficult for such programs to reach a scale where they can become self-sustaining. WNYC reports that its newsroom is working in hybrid formats, producing limited series for on-demand listening that expand and amplify stories that merit more depth and more expansive coverage."
Diversity is another huge challenge faced by the podcast industry, according to the report. As of mid-2016, only a few of the top-100 iTunes podcasts — shows like "Code Switch" and "Snap Judgment" — were designed to amplify diverse voices. Most podcast hosts are also male.
That's starting to change, however. Several shows, including "2 Dope Queens," "Serial," "On Being" and "The Big Listen" have attracted sizable followings and provided some gender diversity in an otherwise male-dominated medium.
Advertising presents also another opportunity and challenge facing podcast hosts, according to the report. Although advertisers are paying a premium to reach podcast listeners now, it's possible that will change as more shows debut. Advertisers will pay $18 to $25 to reach every 1,000 readers on some shows, and advertisers on "Serial" paid between $50 and $60 to reach every 1,000 listeners.
"One danger of depending on this revenue stream, however, is the volatility of the ad marketplace for this new media form. 'Are we in a bubble? Yes and no,' said the co-producer of a hit podcast. 'Probably the prices are inflated and are going to have to readjust.'"