Paid podcasts: A chicken and egg situation?
A willingness to pay and willingness to go paid are two different things.
In this edition
🤑 When will paid podcasts take off
👎 Facial recognition gone wrong
💬 Other tech & media news
Why are paid podcasts a chicken and egg problem
It’s been a month since I wrote that monetization is one of the biggest problems in podcasting. Of course, nothing changed. Podcasts are still chasing the audience growth and none of the big players introduced a paid podcast (none that I know of, if you know of someone, let me know).
One thing though has come a few times: Data supporting listener willingness to pay for podcasts shows promise and it keeps growing.
This is what Tom Webster of Edison Research writes:
Here’s the thing: the study, conducted by YouGov for Variety, reports that nearly 20% of U.S. podcast listeners say they would be Very or Somewhat Likely to pay for or donate money to a podcast. It’s a good study—those numbers smell right to me! But I read the data a little differently. First of all, I can assure you that any medium that could attract 20% of Americans to pay for it is a pretty great business. Second, any medium that could attract event the 2% of Americans who said they would be “very likely” to pay for content is a pretty good business. Third, people never want something until they do. For the millions of us who already subscribed to Netflix and Amazon Prime and Hulu (yes, all three), there was likely no way you would have said a year ago that you’d consider adding a fourth service to your increasingly costly subscription list. And then…BOOM. Disney+ appears and it’s essentially a national tax on parents.
The deep connection that many podcasts seem to create could be opening up opportunities for paid podcasts, alongside advertising-driven models. Almost four in ten Australians (39%) said they would be prepared to pay for podcasts they liked, 38% in the United States, and a similar number in Canada (37%). Willingness to pay was lower in Sweden (24%) and the UK (21%) where so many popular podcasts come from free-to-air public broadcasters.
I have recently conducted an online research regarding podcasting in Slovakia for my employer (SME.sk) and the results regarding paying for podcasts were quite positive:
44% said that they would support podcasts with voluntary contributions, and 16% would be willing to pay for podcasts without advertising, or for extra content.
I know, it’s one thing people say they are willing to do and another if they really do it. Still, I am surprised that there aren’t more high profile podcasters experimenting with this.
Again, it all comes down to the 1000 true fans theory. You do not need to chase scale rather build a loyal customer fan base, or better call them members.
If you take it as the chicken or the egg dilemma then, in my opinion, it should be quite simple to decide. Listeners have declared willingness to pay for podcasts, now podcasters must (should) act and experiment with paid podcasts.
As Jack Rhysider of Darknet Diaries notes, 99% of all podcasts aren't profitable.
The average podcasts gets 129 downloads per episode. That's no where near cutting it for making any money with the show. It's not until a show is getting 40k, 60k, 100k downloads per episode that you can start considering quitting your job to podcast full time. And to make a show that gets 100,000 downloads per episode is extremely hard.
In my opinion, chasing scale is not the answer. Podcasters should look for direct monetization options. Paid podcasts seem a good start.
In other news
😨 Wrongfully accused by an algorithm. In what may be the first known case of its kind, a faulty facial recognition match led to a Michigan man’s arrest for a crime he did not commit. Robert Julian-Borchak Williams got handcuffed on his front lawn, in front of his wife and two young daughters. The police wouldn’t say why he was being arrested, only showing him a piece of paper with his photo and the words “felony warrant” and “larceny.” There shouldn’t be even one arrest like this, nonetheless with mediocre facial recognition. Looking at Europe, the debate around facial recognition looks more promising with a current investigation in the likely illegal use of US-based Clearview AI software in Sweden. According to Politico.eu, there should be laws regarding “high-risk” AI such as facial recognition technology by the end of the year. (Here’s the white paper by EU on AI) [NY Times]
Facial recognition systems have been used by police forces for more than two decades. Recent studies by M.I.T. and the National Institute of Standards and Technology, or NIST, have found that while the technology works relatively well on white men, the results are less accurate for other demographics, in part because of a lack of diversity in the images used to develop the underlying databases.
🛑 In related news from Vice.com: AI experts condemn racist algorithms that claim to predict crime.
Over 1,000 technologists and scholars are speaking out against algorithms that attempt to predict crime based solely on a person’s face, saying that publishing such studies reinforces pre-existing racial bias in the criminal justice system.
The public letter has been signed by academics and AI experts from Harvard, MIT, Google, and Microsoft, and calls on the publishing company Springer to halt the publication of an upcoming paper. The paper describes a system that the authors claim can predict whether someone will commit a crime based solely on a picture of their face, with “80 percent accuracy” and “no racial bias.”
“There is simply no way to develop a system that can predict ‘criminality’ that is not racially biased, because criminal justice data is inherently racist,” wrote Audrey Beard, one of the letter's organizers, in an emailed statement. The letter calls on Springer to retract the paper from publication in Springer Nature, release a statement condemning the use of these methods, and commit to not publish similar studies in the future.
🕺 Reels, a TikTok competitor by Instagram, is rolling out in France and Germany. After its launch last year in Brazil, Reels - which lives within the Instagram app - has added new features including a more permanent way to store the 15-second video clips set to music or other audio. Before users could only post Reels within IG stories, now there is a dedicated space on the User Profile and in Explore. There is no public plan for rolling it out globally (I guess there is still a lot of testing and product adaptation going on, though I do not think Facebook is going to wait long because TikTok is gaining traction in the US and globally). [TechCrunch]
⚙️ In related news from Wired: TikTok explained how its algorithm works.
In a blog post published on Thursday, the company outlined the basic mechanics of its For You page, revealing a recipe its users have long tried to estimate on their own: When a video is uploaded to TikTok, the For You algorithm shows it first to a small subset of users. These people may or may not follow the creator already, but TikTok has determined they may be more likely to engage with the video, based on their past behavior. If they respond favorably—say, by sharing the video or watching it in full—TikTok then shows it to more people who it thinks share similar interests. That same process then repeats itself, and if this positive feedback loop happens enough times, the video can go viral. But if the initial group of guinea pigs don’t signal they enjoyed the content, it’s shown to fewer users, limiting its potential reach.
✋🏾 Ad boycott at Facebook is getting real. First, The New York Times published a story about advertisers boycotting Facebook and pulling ad spend, though there were few big names mentioned. Since then the clothing chain Eddie Bauer, the film distributor Magnolia Pictures and the Ben & Jerry’s ice cream brand announced that they would stop advertising on the platform through July. They are joining Patagonia, the North Face, REI, and others. Though I suspect this is not going to be longterm for them and without any effect on Facebook. As one agency media planner said for The Times: “Facebook is a double-edged sword. You don’t want to support it, but you have to use it in order to reach a large audience.” [NY Times]
👾 Microsoft is shutting down Mixer after 4 years and partnering with Facebook Gaming. Especially last year Microsoft attracted attention with Mixer by signing up big streamers like Ninja or Shroud, they are free to return to Twitch now. My take: Bold move to abandon an ambitious project that quickly after making so much noise. On the other hand, it tells you a lot about the dominance of Twitch. Although is partnering with Facebook a good brand move for Microsoft? Don’t think so. [The Verge]
🍏 Apple news from WWDC. There were a lot of announcements and new features for all the operating systems the company operates. Here is a good video summary:
☠️ Apple kills ad tracking in Safari. Well, it will be opt-in with the wording: “track you across apps and websites owned by other companies?”. Is anyone willing to say “Yes” to that? [Forbes]
👁️ Opinion vs. news. Read this piece in The Conversation titled: Journalists believe news and opinion are separate, but readers can’t tell the difference. Gives a brief history and dives deep in how opinion and news came to be. [The Conversation]
If news organizations such as The New York Times continue to maintain that a robust opinion section, separate from their news reports, serves to further the public conversation, then those institutions will need to do a better job of explaining to news consumers where – or if – the “wall” between news and opinion exists.
🎶 Top music composers are ditching Hollywood instead of video game music production. The move marks something that’s quite overdue: The video games industry has been bigger than Hollywood for some time now. One catch: Film and TV have more long term lucrative potential because of royalties and back end. [Wired]
💭 Spotify gets Google-like ads for podcasts, kind of. The streaming platform is calling it “In-App Offers”. Podcasts will have the ability to include links to the advertiser’s webpages with a promo code included so that ads become more effective. Spotify is reducing friction which could lead to more advertisers trying out ads within podcasts. On the other hand, the app is getting cluttered. [The Verge]
🎧 New podcasts alert: Axios Today is a new daily news podcast by Axios. Season 2 of Land of the Giants podcast launched that focuses specifically on Netflix. (One fun thing for Slovak subscribers only I guess: I found out that The National Bank of Slovakia has a podcast and it is not horrible. Peak podcasting in Slovakia?)
📩 Newsletters in Newspack CMS. Steve Beatty of Newspack publishing system and newsletter expert Dan Oshinsky of Inbox Collective will explain how to best engage your readers through newsletters and show the variety of newsletters you can produce. I’ve been following what Newspack has been doing for a while and so far it seems to be a really good answer for small and medium publishers to use as CMS. When? June 25, 2 - 3 PM EDT. [Institute for Nonprofit News]
🗣️ How voice technology is shaping education and entertainment? Voice Talks is a monthly live stream series presented by Google, the series aims to bring topical conversation and insights to the voice community and ecosystem. When? June 25th, 2 PM ET. (If you are reading this after June 25th, here is the archive with all the previous episodes) [Voice Talks]
🏴 Did you know? Segway ends production. The two-wheeled, self-balancing personal transport device will be no longer. Seems like e-scooters did the job just fine for potential buyers to replace Segways, also turns out they are a lot cheaper. [Fast Company]
🤔 Evaluating a (marketplace) business idea. Fellow Substack writer Lenny Rachitsky of Lenny’s Newsletter shared some ideas from his latest blog on Twitter.