Podcast Bubbles Popping

Richard Kramer:

Welcome back to Bubble Trouble Conversations between, we're not two bots parading as humans we're actually humans, the independent analyst, Richard Kramer, that's me and The Economist Will Page, that's him. We really like to dig in on the inconvenient truths about how business and financial markets really work. This week we catch up with the subject that is near and dear to our hearts, but in a distanced way that is the business of podcasting. Will is fresh from two days at the industry's leading event in London where thousands of people got together to figure out can they actually make money from podcasting. I want his thoughts about whether this is a hobby, a business, or something in between. More in a minute.

Will, aside from the fact that we care about podcasting and there were 4,000 or so other people in London this last week who cared about podcasting why should our audience care about these crazy things called podcasts and whether or not they're a real commercial enterprise?

Will Page:

I think, skin in the game is a short answer. I think, our audience will have an interest in podcasting. Many of our audience be wanting to do or at least exploring doing podcasts themselves. The barriers to entry in this field are effectively zero. The topic of exposing financial misdemeanors can be done by ourselves. It can be done by our audience. Let the consumer become the new broadcaster, but also a quick fact check there. There was 4,000 people at the podcast show last year. It was over 6,000 this year.

Richard Kramer:

My goodness.

Will Page:

Clearly the business of podcasts is booming and the business of podcast competencies is booming too. I think, over the course of this conversation, Richard, we've got a lot to share the audience about where they might want to go with their podcast ambitions, as well.

Richard Kramer:

Yeah. There were so many interesting strands to pull out, whether podcasting is the future of journalism in a way. In being able to speak those stories that so few of us get to read, because the circulations of the leading newspapers have fallen off so much. About all the large players that are jockeying for position in the market, as you point out in your own book, when things slow down and they move from herbivores farming their own patch to carnivores trying to kill each other off.

Will Page:

Absolutely.

Richard Kramer:

There's so many strands to pull out. What are the top couple of things you want to start off with in terms of your big observations about this business of podcasting?

Will Page:

Well, let's start with the conference itself. I couldn't help but notice the number of Americans that came to London for the podcast show. We're talking here, literally, about thousands of Americans made the trip. Now, America has their own podcast conference circuit. They have this huge event called Podcast Movement. They were all saying the same thing. The atmosphere in London was one where you don't find in America and they're not going back to US conferences. They want to build up their podcast network in London. A hat tip to this city as we seem to have the global HQ of podcast gatherings that's one observation.

Richard Kramer:

Can I call a time out on that for a second, because I don't see the Americans coming over when the weather is utterly miserable in November or February, but when it's the glorious May Bank holiday weekend week they're all over here in droves.

Will Page:

I know maybe there's something to do with the timing there and maybe we rescheduled next year's podcast conference to coincide with Wimbledon. There'll be even more American coming over for it.

Richard Kramer:

Absolutely.

Will Page:

Yeah. That was a pleasant surprise to see so many Americans loving a two-day event in London. One other thing on the conference before we get into the detail, I want to stress this to our audience, why these podcast conferences work so well is that most conferences drive me insane. Because, it's a bunch of douche bags, as you call them Richard, up on stage who digress from the conversational topic matter, and overhaul the microphone, and run the clock out. They should never be on a stage in the first place. Whereas podcast conferences are gathering of people who are skilled in the hour of conversation like a good cell. When you have a conference with full of people who can have a conversation do you know what happens? It makes for a great conversation. That was the other thing I picked up just anecdotally for the event.

I think, the big meaty topics of the conference I think the RSS Feed was obviously one. Should podcasts be open or closed? We can get into that one, but it was interesting to see that YouTube seemed to do a role reversal on their opening keynote. What I was rumored, and I can only speculate on the rumors I've heard, was they were going to announce that you can get to the RSS feed for YouTube podcasts, but they're going to take away your adverts and put their adverts on your places. We're going to be open for distribution, but closed for advertising. What I heard was that announcement was scuffed at the last minute and then they did a very generic "Here's YouTube podcast ambition."

It shows, I think, with this, to a stress for audience when we say RSS feed what are we talking about here? We're talking about a way that you can send podcasts everywhere. You could build a podcast platform tomorrow or you'd have this podcast coming down your channel and to your audience, as well. I think that was interesting that one of the big players in the market was going to play open on distribution. We're open to RSS distribution for podcasts, but closed on adverts. I think that highlights the tension point there, Rich.

Richard Kramer:

But, if I want to step back and ask whether this is all nerd porn or tempest in teapot podcast ads are still pretty small. It's a billion dollars or so of podcast advertising revenue globally, maybe a billion and a half, and radio is 20 billion or more. The entire digital advertising market as a whole is $600 billion. Isn't this a kind of navel gazing exercise for the people who are deep in the weeds and doesn't really matter that much to the economics of giants like YouTube, for example, how this podcast advertising market develops?

Will Page:

Yeah. I think, YouTube can survive with or without podcasts. I should actually pick up on this a bit more depth. We'll come back to adverts in a second. The YouTube questions fascinating and it has fascinated me for five years now, which is if you ask the industry, "Is YouTube the podcast platform?" They diminish it as, "No YouTube isn't podcast." When you ask consumer what's your favorite podcast platform they all say YouTube. That disparity, that divergence and thought has always puzzled me. Another big debate this week was, should podcast be visual or do they no longer become a podcast? We can pick that up.

Back to your point of advertising, though, I love your cynicism when it comes to markets, Richard, and I did maybe bred into that cynicism myself at the conference. When they say it's a billion dollars or we're approaching $2 billion and has been on podcasts. Yes, that is chump change compared to other industries, but I am beginning to wonder A) how much of their advertising is carousel advertising? Podcast advertising themselves. Then B) how much is actually being listened to given the podcast cart app player's got a ten second skip button where you can just jump it intuitively, get through the pre weed adverts and get to the content itself. There could be some bubble trouble in what does a fairly small bubble of podcast advertising coming down the road?

Richard Kramer:

Yeah. Your point is well taken. As a reminder to our listeners we're not doing Bubble Trouble because we have an economic imperative. It's not our day jobs. It's something we enjoy doing. It's a passion project, but the idea of...

Will Page:

It's education.

Richard Kramer:

... trying to turn it into a business is something that for all, but are the rarefied few is really out of reach. There's a lot of reasons why people do podcasts and a lot of very successful ones, but it seems it's a struggle to find a lot of great examples about podcasts that are commercially successful, as well as having the cultural impact or gathering the audience. Is that a fair statement?

Will Page:

Yeah. Well, let's turn to the one example that seems to have made it work. I say the one example, I mean I don't think there's a second or a third literally, which is the Joe Rogan Podcast. My understanding for Joe Rogan is his audience can range between 3 and 50 million. For a small show, a trivial show, maybe, it's 3 or 4 million. For the big ones, Elon Musk smoking a split, whatever you're up into the fifteens maybe a little more. For the show that was canceled effectively, but it's still up there I'd imagine that would've tapped 20 million plus. It negative publicity. After all there is no such thing as bad publicity. What I find fascinating is if he's the number one podcast on the planet how big is number two? The gap between gold and silver we're off a cliff here.

Richard Kramer:

Right.

Will Page:

We talk about podcast being a big business and Joe Rogan's a big podcast. Well, I took a place of honor and I want to thank our producer Eric Nuzum here, because I had four people on stage quote my expression, "Podcasts are a sea of niches." I said this in a Times interview. I think I stole of Eric Nuzum, producer don't cut the cord on this podcast please. I think it's fascinating to think about podcasts are not a typical media market. They are not hit heavy, skinny tail distribution like everything else games, tv, music, film. They're a sea of niches. There's one big blockbuster and everything else literally is a niche. They can be big niches, they can be small niches, but they are not mainstream events. They're intimate closed group events. That throws up a ton of questions about how does this market play out?

Richard Kramer:

You're, as an economist, someone who has looked at this issue of the long tail and of distribution of income and how in so many fields the spoils go disproportionately to those at the top of the tree.

Will Page:

Yeah.

Richard Kramer:

How does podcasting break through this sea of niches and find audiences that may be scattered all along that long tail? There may be dozens of podcasts about finance and business, or entrepreneurship, or true crime, or what have you, but each of them has a relatively small audience. How do you aggregate those into groups of interests that are large enough to be relevant to more than the handful of advertisers we know are super active on podcasts?

Will Page:

Yeah. Richard, if we think about a long tail market here what I'm seeing is that on a podcast platform like Spotify, admittedly we're talking about a glass half full, because you've got Apple's podcast platform on the other side. But, when you stick with Spotify the Joe Rogan podcast is so far out in front of the rest of the pack it's striking for me. Rogan's audience on a bad day, maybe it's 3 million for a small trivial show on a big show it could be up in the 15, 16 million mark. Fine, it bubbles along, but these are huge numbers for one show. It's a lot of creator hours. If you think about two, three shows a week, each lasting three hours long, he's getting more creator hours than any other artist on Spotify.

What's staggering when we go back to this long tail discussion is the next best show probably barely breaks a million. The gulf between gold and silver is so wide. I think, this is a microcosm of how this market's going to play out. You know that expression, "sea of niches" I've kept on hearing being quoted at the conference. I really do think we're trying to get our heads around a media model that is truly long tailed. That truly is going to be a sea of niches.

Richard Kramer:

Thanks Will. It's a fascinating way to round it up. Thinking about the music analogy it's impossible to think that you'd have one artist to Dua Lipa, or a Drake, or a Bad Bunny that's up there in the three, 4 million, billion. Sorry. Streams on Spotify that would be so far out in front of everybody else in the music industry, because the music industry has become so practiced at evolving these next gen talents, launching them into the market, and getting publicity for them. It's fascinating looking at podcasting where you have, whether it's this American Life, or the Daily from the New York Times, or Joe Rogan you have these legacy catalog brands, the bands that we knew when we were kids, whether it's a David Bowie, or a Fleetwood Mac, or a Bruce Springsteen, or Prince that still have the staying power as podcast brands and they haven't been knocked off the perch. There doesn't yet seem to be the industrialization of the process of refreshing that base of podcast titles that brings through new talent and grows them into stardom.

Maybe, that's what we want to get into in the second half. What models have worked to create stars in podcasting and what's going to come next, whether it's video comments, chapters and how podcasting might evolve to open up to new audiences. With that, we'll come back for part two, Will Page's views on the podcast show. This is Bubble Trouble back in a moment.

Welcome back to part two of Bubble Trouble Will Page's views from the Epic podcast show in London. This emerging new medium that is yet to find its footing as a commercial enterprise. Now, Will we do like to lay out these inconvenient truths about how tech and financial markets really work and here you have this genius new medium, well it's actually 20 years old now, but coming to its own through the pandemic. Everybody saw it as a road to riches, but tell us what are the emerging business models? we had plenty of Bubble Trouble podcasts where we dissected the creator economy and decided that we weren't going to be walking down the street throwing a tenor in every direction to every Substack journalist or podcaster that we thought did something clever. That creator economy never panned out to be the road to riches for all those individual creators. Did it?

Will Page:

No. I can't believe you called it a new medium in front of Eric Nuzum who was producing podcasts, our producer, back when the iPod was the main form of distribution. A bit of a full [inaudible 00:14:04] there Richie.

Richard Kramer:

It's an analogy. Well, it's relative. TV was came from the 20s and radio was even before then.

Will Page:

Yeah. Let's recap on what we've got to. We know that podcasts are not fat in their head like music has achieved. We know that a vast chunk of them are not making any money. We know that in the advertising world there's some hocus pocus figures going on there too in terms of how much of those advertising was carousel advertising, that is advertising to yourself, and how much of that advertising was skipped, and the cost of selling those adverse, which is rarely discussed, as well.

If you want to flip it from advertising what's your other option? What's your plan B? It's subscription. Now, let's just remind ourselves about when we've discussed the newspaper industry and we've got a whole chapter of Bubble Trouble about free press that when you pay for adverts on Spotify, it's a deterrent. I hate those adverts and I want to use them as a way of making you convert premium. Once you're on premium, you get rid of the ads. Whereas, in newspapers and magazines, you pay for a newspaper magazine you're going to get adverts. You subscribe to that newspaper magazine you probably going to get even more advert. They're no longer the deterrent.

The path that podcast seemed to have picked is to turn down the music avenue of adverts are deterrent and you pay to get rid of them, but very few people have made subscription work. I did find one, which is two film review critics well known on these shores called Simon Kermode, Simon Mayo and Mark Kermode. It's called Extra Take or Second Take. The podcast is produced by Something Off Productions, veterans of the podcast business. Now owned by Sony Music, not Sony Core, but Sony Music, Dennis Cooker and the team have got skin in the game here. They seem to have cracked it. My understanding is they seem to have cracked it with six figure numbers of people paying to the tune of 3.99, 4.99 a month to listen to these guys give their reviews of films.

Richie, there is something happening here. What I want to get into in the second half of this part is the reasons why. They did before the podcast show kicked into full effect on the Wednesday. They did our preview at the Union Chapel on the Tuesday, not just sold out. Interesting. No advertising. Not just did they create the podcast live on the stage, which means the cost of content creation now becomes a revenue stream. Think about it. You're paying to come and see me create content, which then goes out to my audience to which I can advertise against or subscribe against. They have got serious numbers paying not just for the show, but for merchandise. Like you said on part one. The pop star phenomenons. It's not just about the track on Spotify it's what else you can sell around it.

I'm trying to figure out why. I have this thesis I want to run past you, Professor Kramer, which is, I think it's about de-risking a situation. Let's say you're going to go on a date. Okay. You don't go on dates that often, but in this case you're going to go on date you could go to a show, you could go for a walk, you could go to the movies. Let's say you pick the movies. What is the risk of that movie being a dud film, and that then becoming a bad date, and nothing happening thereafter? That's a big risk and you can't afford that risk. You are willing to pay money on top to avoid the chance for movie being dud. In fact, you are willing to, and follow me here, you're willing to pay more for the curation. Mark Kermode and Simon Mayo telling you what to see, and what not to see, and the reasons why than you are for the actual content. That is the annual cost of their podcast subscription exceeds the cost of two or three cinema tickets. What happens when curation is worth more than content, Richard?

Richard Kramer:

Well, I would say Kermode and Mayo have tapped into the ocean of cinephiles who may have a morbid fascination with the dozens of awful movies that are produced every year, but want to engage with someone who has a thoughtful, considered opinion, a take-down, or effusive praise of those films. I don't necessarily see it as a risk mitigation for your hot date and you don't want it to be a dud watching the latest installment of the Fast and Furious franchise or the latest Marvel franchise installment. I see it instead as tapping into one of those fan bases, which isn't a niche. It's actually quite large. I don't know how many of Kermode and Mayo's listeners come from out outside the UK where they have their roots as film reviewers.

To the extent that you can capture that cinephile audience globally that's what Rogan manages to do. Right. He doesn't just capture the US conspiracy theorist or crazies that love to listen to him rant on about things, but he captures large audiences in many other markets and even in non-English speaking markets. I think it's... Rather than look at it as, "Geez, this is the way I'm going to make sure my data is in a bomb."

I'd look at it as where are the niches that enough people populate that they would want to pay to listen to very high quality entertainment? I'm sure our producer Eric can chime in, because there was a very famous show that I wouldn't be surprised if he had a part in on NPR for the longest time called Car Talk. It's similar to Gardener's Question Time on the BBC where you find a very large audience of people who passionately care about gardening, or cars, or cinema and they're willing to pay to get an expert's dissection, digression, disquisition, whatever next D word I can come up with, debate over these fascinating topics. The insider baseball of that segment of the market.

Will Page:

Yeah. This is making me think, thinking aloud here, I do think there is a role for de-risking, but I think you've maybe tapped on something even greater. It's like peer pressure work of quality not quantity. Let's say for the sake of round numbers there's a hundred thousand people listening to the Kermode and Mayo Cinema Review podcast and paying for the rights to do so. Let's say for the sake of round numbers there's a million cinema goers in this country. Probably a few more, but let's just put it as a million. Those a hundred thousand in their social networks would be the one in 10 people in a group whose film review you'd appreciate. I want to go to the movies, but my mate, Rich Kramer, he really knows movies and he said I should go and see this one, so I'm going to trust his word. It's Rich Kramer who's paying for Kermode and Mayo. It's not me, but I'm a benefactor of him listening into that show.

It might be that say... When you say Gardener's Question Time, which distress is the longest running piece of audio content...

Richard Kramer:

Absolutely.

Will Page:

... in this country, phenomenally successful. I'm not interested in listening to it, but if I've got a friend who does I'm going to ask that friend for advice about what to do my peonies. It is that type of peer pressure, that type of word of mouth network effect, which means Kermode and Mayo's audience might only be a hundred thousand, but they're affecting way more than just a hundred thousand. If they say a film was a dud, a hundred thousand people are going to say to their 10 friends each, "I heard this Kermode and Mayo review of this film and it's a really bad film." That we've amplified the effect out. I think it's this network amplification thing that could be going on with it too. To stress 4 million podcasts on platforms, maybe 5 million now just one seems we've got subscription to work and there's two very well known, highly regarded film reviewers based here in London. It's an incredible success story. I'm not saying it's transferable, but we've got to learn from it.

Richard Kramer:

Yeah. Let us not dismiss, for example, the Rest is Politics from Alistair Campbell and Rory Stewart, which has garnered a large audience and has from what we understand substantial advertising income. Or the Americast podcast with Emily Maitlis. Or the other ones that are coming through that haven't chosen subscription to monetize or maybe they don't have the opportunity to develop all the incremental additional content that would justify a subscription on top of the base offering. Certainly, we've talked before in many other media about the trade off between going behind a paywall and limiting your reach, limiting your influence and making something available to everyone maximizing that reach and influence, but minimizing the opportunity for that incremental subscription income. I'm sure you'll see plenty of other podcasters make an effort to replicate Kermode and Mayo. Maybe, some will be successful, because they've shown that maybe $4 a month is the magic price. It doesn't feel like such a commitment to make $10 and it's compared to a cinema ticket of $12 or $15 four pounds doesn't seem like a lot.

Will Page:

What they're doing now? You've got to pick your subject matter carefully when you look at business models, this is film review. When you pay you get watch-alongs, so you can time your podcast with a start of a movie and watch it with Kermode and Mayo talking in your ear as you're enjoying a film. that was pretty cool innovation actually. It sounds a little bit freaky at first, but...

Richard Kramer:

Or extremely irritating if you think of that person in the behind you in the cinema who can't stop whispering about how the film is when you're actually enjoying it.

Will Page:

Well, at least you can't see their mobile phone flash up on a podcast. No, it's interesting to think about that as a deviation for what they can put in the first class carriage, that premium tier offering, is to offer a watch-along. I watched a movie, didn't quite get my head around the plot, which is typical for me. I'm very slow in the update when it comes to movies, but if I could watch it again with an expert that's worth a fiver a month.

Richard Kramer:

I think, there are many other examples, whether it's Radiolab did this brilliantly or my neighbor, Gary Kemp, who's got a podcast called Rockonteurs. They timed with the podcast show, had an event at the screen on the green in Islington where Gary had gone 30 years ago to see the Sex Pistols. They timed that event to bring members from the Sex Pistols and The Clash onto the stage to discuss their work, which is what the podcast does.

Will Page:

Wow.

Richard Kramer:

There are these spinoff events which tap into the audience and from what he told me it was sold out. When you find opportunities to re-engage the audience I think the audience is keen for it. Maybe, let's move on to one other thing that we wanted to touch on before we get to Smoke Signals, which is what's next to come. You mentioned YouTube and people don't think of it as a podcast destination, but certainly we'd be mortified to think that our listeners want to actually watch us as they listen along. What else is coming in podcast content to make it more like audiobooks, more immersive to add the extra layers of content that might spark the subscriptions and the extra income for podcasters?

Will Page:

Yeah. We got a great face for radio. Right?

Yeah. The video one's a big one and there's a great discussion with Ross Adams from a Acast who are now going in with and Russell Toby the actor from years and years about their talk art podcast. Talking there I have raised my hand and asked the question, which is "You've got this incredible podcast. You're doing great numbers. You're able to speak to Pierce Brosnan for 40, 50, 60 minutes about his love of art. Not his role as a Bond movie, not his role in Mama Mia, but your love of art. Tell me what makes you love art." I raised the question, which is "This is an audio content podcast about celebrities love of art and nothing else, but art is a visual format. Would you go to video?" He spent about eight minutes answering my question and he concluded by saying, because of video all the hangouts, production angles, light, appearances, it's just me and Pierce Brosnan two microphones and off we go.

That's what that's the magic. I'm asking you to imagine in your head that love of art not to be bombarding with visual content to make you love his art. It was interesting to see there's a loyalist to the audio format only community there and there's other people saying the sooner we get the video the better we can pump up our ad rates. You've got a bit of a division happening there.

Two other quick ones. I think chapters are going to be interesting. I'll give you a quick example. Financial Times, friend of the show, guests of the show, big supporters of the show I'd like to say to them, if you could do the FT Weekend as a podcast broken into chapters, that might just work. Stephanie Priest from New York Times if you're listening same for you guys, as well. Newspaper podcast broken into chapters are a very different thing from newspaper podcast without chapters. I want to hear some money sections, I want to hear some art sections, and give me some film reviews, and I'm off, but don't ask to stick around for a full 45 minutes.

Then I think the last thing is comments. Not much movement on the tech side from Apple and Spotify on comments. I know people are trying to work on it. It is not going to be easy. The RSS feed and integration of comments like YouTube's got comments, but it's really interesting to hear the podcast presenters at the show like Gabby Logan talking about how important feedback was to how she formats her show at the midpoint. Then thinking, well, what if she had comments on that show so she could see at scale what her audience have to say about listening to that person going through a midlife crisis. It's interesting to think about currently we're a glass half full. We've got two people in a microphone having a conversation to fill that glass we want the 200,000 people listening to that podcast to be engaging in that conversation.

Wrapping up on that one can I just give you a quick insight from YouTube.

Richard Kramer:

Please.

Will Page:

I've noticed in the past two years or so I'm addicted to reading YouTube comments on anything. On a piece of simple content, on watching our Milton Friedman speech from the seventies, or listening to music. Comments are great, but around about two years ago YouTube did this transformation to comments whether he is ripped out any vulgar, or profane, or abusive language. Right. Cry free speech if you want. It's their platform. It's their rules, but what their goal is to make comments enjoyable to read. Isn't that crazy? They just slipped that through the net and their comments are great to read because all the profane stuff, and vulgar stuff, and got you stuff, and trolling that's all been swept from under the carpet. It's amazing when you make comments and nice to read how much value they have. To wrap that point up in my book, I quote Ybba the artist Ybba, spelled Abby, spelled backwards. She said, "I value the comments on YouTube more than the royalties from Spotify." What matters most Richie?

Richard Kramer:

Well, I wholeheartedly agree and that I find the comments below the article in the FT are absolutely priceless, and brilliant, and there are some genius, thoughtful reactions to articles which become a meta critique. In the same way that this show is a meta critique about what we are doing ourselves and about whether there's a commercial end point to it.

With that, I think we need to get to Smoke Signals, the uh-oh moments that we have all this hype and hysteria of Bubble Trouble. We're overhearing things that the podcast show that make you shake your head and say it's not going to work out that way. There is no pot of gold at the end of the rainbow, which you can't even really see. What things did you hear with these 6,000 people enjoying the lovely spring weather in London that made you cringe?

Will Page:

Double counting audience figures. Number one, it's an epidemic. I've heard countless people boast about their podcast numbers to me and you only have to probe ever so slightly to realize the numbers are what they're actually claiming. It really become... It belongs on a full episode of More or Less the podcast, so I'll pitch it to Tim Hartford, which is look the question is how many unique people with pulses are you reaching with your podcast? If you are telling me that you're doing 22 shows a month and you're getting 34,000 unique people with pulses. The answer is not three quarters of a million people. Repeat the math there. 22 times, 34,000 people does not get you to three quarters of a million unique people. This is my challenge is when everybody says, "Oh, my podcast is doing great numbers." Frequency, how many shows are you doing and double counting is driving for a large part those great numbers.

What really worries me is those data scientists were making this mistake at the conference not just to presenters. I know really big podcasters who are claiming they're doing these huge six figure sums. I'm like, "You're not. Basically you're doing 40,000 and you're doing a ton of output every month. That's what's getting you to these huge numbers on top of double counting. Let's remember you've also got automatic downloads without a listen, bit of an issue, and then you've got click four that is scandals that, actually Carmen friend of the shows me exposing on Bloomberg, people using gaming companies to drive up their podcast numbers, as well."

I think, it's got to the point, for me, which is whenever somebody says, my podcast gets to this many people remove a zero. I think, that's a huge rule of thumb to get closer to that thing we call a truth. I get to 600,000 people on my show. It's probably closest to 60, and there's double counting, click forward, and unlistened to downloads in that mix, as well. I really think that's an issue. I get to stress the experts were making that mistake and when I probed them on it the mistake was exposed. Again, it's-

Richard Kramer:

How much of that is emperor's new clothes, because no one wants to admit that they are actually narrow casting to a tiny niche audience? Everyone wants to think they have cultural cache and millions of people are flocking to hear what they've got to say.

Will Page:

I know it's you don't want to stand out from the crowd. If my neighbor's cooking their books, well, I should cook my books as well, so we can all cook our books together. I think the advertisers, the media buyers who can be absolutely ruthless here, if they start pressing in and saying, "Oy, come in number 13 your time is up." How many unique people with a pulse are actually reaching your podcast and, this is just listens, listening through to the end?

Richard Kramer:

Yeah.

Will Page:

Not to repeat the oldest joke in Bubble Trouble, but the listen through metric as well is missing Ts. It's really messy. When I heard things like James Cridland was saying, we're really excited, we've got charts coming and it's based off survey samples. No. I think, the media planners if they're going to believe in this format we need something far more granular, and far more accurate, and a whole lot less cooking of books of audience figures. Whatever your friends or podcasters say about the audience chop a zero off and I promise you'll be a lot closer to the truth.

Richard Kramer:

Great. Let's get one more. I always think of podcasts as one of these classic examples in tech of extrapolating educated upper middle class behavior to the mass market. Maybe, I'm wrong about the demographics of that. I don't know. Maybe, it works differently for Bill Simmons in The Ringer or sports categories, but...

Will Page:

To impress friends at dinner parties. That's why.

Richard Kramer:

Absolutely.

Will Page:

No such thing as a fish. The purpose of [inaudible 00:33:38] fish was dinner parties.

Richard Kramer:

I don't go on the terraces at Mill Wall to hear how many people there survey how many people there are listening to podcasts many times a week. Tell me one more uh-oh moment that you came away from this, obviously, celebration of the business of podcasting we had in London and said, "Hang on, this just isn't going to save anyone's bacon."

Will Page:

Well, Abraham Lincoln once said, "I've got two people in a meeting who both share the same opinion. I've got one person too many at my meeting," so many people at that conference were evangelical about the RSS feed and podcast being open distribution platform. I think the contrarian mean was to say, "Let's call this out." Which is, "Hold on a second. The platform, the Spotifys, the Amazons, the Googles, the Apples are spending a ton of money developing their proposition. If it's the RSS feed model, it's open, they don't really get that much skin in the game of the content that's going through." If you go back to that rumored decision that YouTube were going to say, "Yep. You can distribute your podcast here, but I'm going to do your advertising." That's them saying, "Well, sender pays data, baby."

If you remember Andrew Bud's famous description of the telco market. What did he say? He said he referred to Roland Hill at the Royal Mail who in 1851 changed the model from receiver page to sender pays. You used to pay to receive your post and then he flipped it around and said, "No, you're going to pay to send your post." Then the network effects built the Royal Mail that we have today. It's who pays, which is you're getting onto my platform with your adverts for free and I see nothing of the upside. Oh no. Now, I want a bit of that upside. Either I'll take your adverts or I'll control the distribution.

Now, I'm not saying which one is right or which one is wrong. That's to be thrashed out in the pages of Pod News, James Cridland a friend of the show, and simply saying, "Let's think about the perspective of the platform hiring engineers, developers, UX designers to make that platform attractive, but to wash all the value wash through their hands, because the distribution format is completely open." I think, for balance, we should consider the view of the platform as well as the podcaster.

Richard Kramer:

With all those big beasts Apple, Spotify, Amazon, Google, and YouTube involved here along with oodles of other leading media brands is this a great evidence of bubble running into trouble. That they've all rushed into podcasting, it didn't turn out to be a road to riches for all of them, and there's a pullback happening?

Will Page:

Yeah. I think it is, but I think back to what we flushed out on part one, if in the past a hundred years of having a media format that we know and love everything has fallen into our hit heavy, skinny tailed distribution. My favorite example is films. I remember speaking to Hollywood executive who said, "I set the marketing budget for a new Will Smith movie so that one in three Americans know there's a new Will Smith movie. No figure, no ceiling, spend what you can to the point where a third of America knows there's a new Will Smith movie. Then I've got a blockbuster hit and I'm putting my kids through college. If it's one in four I got a flop back in debt."

That's how media has worked and we've had that ingrained into us, but if we are genuinely dealing with a new media format that A) soaks up a ton of time because we're asking for 45 minutes not four and a half minutes like a song. That could be 45 minutes two or three times a week, which is longer than an average movie. We're winning in time, but it is a sea of niches. We don't have those hits. Then we're back to the drawing board. Shake that hangover of the past five years of hype and steria about podcasting go back to basics.

A shout out to [inaudible 00:37:21] from the company Sounder,fm, listener of the show, because he's looking at programmatic advertising for podcasting, which is [inaudible 00:37:29] for a second. I need a way of reducing the marginal cost of getting ads to the ears, because I'm dealing with a sea of niches. I don't have that scale economy effect that Blockbusters used to give me, so I got to reduce the cost of getting the ads out and that leads into programmatic solutions. That ain't going to be easy, but it's very interesting to start thinking through how do you serve a sea of niche? That's the question we're going to try and ask.

Richard Kramer:

Well, it's been a fascinating roundup of what Will Page learned at the podcast show. A medium that may be a revolutionary one of the future, but still remains, as Will says, "A sea of niches" and for a lot of folks not the road to riches to make a living. Happily for our producer Eric Nuzum he has plenty of fantastic hit podcasts that he's working on, but he's one of the OGs of the industry and one of the rare few that I think can sit back watching us record and still smile about the economics of this industry. With that, it's been another fascinating episode of Bubble Trouble. We'll be back next week with myself and Will Page. Thanks for listening.

Will Page:

If you're new to Bubble Trouble we hope you'll follow the show wherever you listen to podcasts. Please share it on your socials. Bubble Trouble is produced by Eric Nuzum, Jesse Baker, and Julie Arnett net at Magnificent Noise. You can learn more at bubbletroublepodcast.com. Until next time, for my co-host Richard Kramer, I'm Will Page.