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Have We Reached Peak Podcast?
I’ve been reading a lot about how podcasting is a troubled industry.
In January, podcast industry observer Nicholas Quah wrote that 2023 is going to be a year of reckoning for Big Podcast:
[T]he specter of more consolidations, more layoffs, more shuttered shows, and studio closures came up frequently. The general consensus is that the exorbitant spending of the past four years, particularly by the bigger companies like Spotify and iHeartMedia, will finally be properly scrutinized — and possibly come to an end.
The New York Times had a piece about about how in 2022, “as macroeconomic factors cooled ad spending, […] formerly rosy-eyed podcast executives began hitting the brakes.” And this morning, Terry Nguyen over at the Dirt newsletter wrote about the “death of the podcast.” What exactly is going on here?
The first thing to clear up is that very broadly speaking, there are two main types of podcasts, that I will classify with extremely official industry terms:
1) Highly Produced podcasts - Podcasts like This American Life, Reply All, Radiolab, and even Wait Wait Don’t Tell Me fall into this category. Basically any show that requires a high number of production hours per minute of podcast. These are often journalistic podcasts but they don’t have to be.
2) Folks Gabbin’ podcasts - Podcasts like…well, pretty much all of my shows. Shows that largely consist of friends and colleagues gathering and talking on mics for hours. Interviews with writers, comics, and celebrities. These can also be expensive but they are frequently much cheaper to make.
Most of what I’m going to write about in this email refers to stuff going on in the Highly Produced category as this is where most of the industry angst is coming from. These are shows that often cost hundreds of thousands of dollars and therefore require massive listenership (and the ad dollars that come along with it) to justify their existence.
Here are what I see as the big factors at play.
The rate of listenership growth has peaked
Podcast listenership is still growing year-over-year but the rate of growth has slowed. Insider reports that after years of double-digit growth, podcast listenership only grew 5% in 2022. Podcast advertising, once projected to exceed $2 billion in 2022, only hit about 3/4 of that number.
Similar to the way the bottom fell out of Netflix’s stock when people realized the growth wasn’t going to go that way forever, podcasting is experiencing a similar reckoning. VC models premised on endless or even multi-year growth have met with a harsh reality: People aren’t committing as much time to podcasts as we thought they might. And that has massive implications for how much money gets invested into podcasts.
It has never been harder to grow a new podcast
Shows like This American Life and Radiolab will continue to reach millions of people. But for new shows just starting out, it remains harder than ever to get a sizable listenership. You aren’t just competing with the over 5 million shows that Spotify has in its catalog, you’re competing with the myriad of other ways that consume people’s time including social media, Netflix, and watching Taylor Swift in concert.
A podcast like Serial was premised on the idea that you could spend months working on a story, create a Highly Produced show out of it, attract millions of listeners, and make money back on the advertising (or monetize via some kind of subscription, like Wondery Plus). Some shows still launch using this model but it’s now so difficult to attract listeners to a new show that I suspect we’ll see fewer new ambitious, expensive shows in the years to come.
The numbers are already starting to bear out this difficulty. The rate of new podcast creation has declined dramatically. According to one metric, there were 80% fewer podcasts created in 2022 than in 2020, and ~35% fewer than were created in 2019, pre-pandemic.
Podcast discoverability tools still aren’t great
A question for you, reader: What is the last new podcast you listened to? Was it good and is it now a part of your daily rotation?
YouTube, Tiktok, and Instagram all have sophisticated recommendation engines, but nothing similar really exists for podcasts. A huge part of this is the nature of the medium. You are often committing 30-60 minutes when you listen to a podcast as opposed to 15 seconds for a Tiktok video; it doesn’t really make sense, after you’re done with one podcast, to funnel you straight into another one. Moreover, people often listen to podcasts for the parasocial connections they form. You have a much different relationship with the podcast you spend 2 hours per week with than the Tiktokker you watched for 3 minutes that one time.
But apps could still do a much better job of taking you to podcasts that have a similar vibe, discuss a similar topic, or are frequently listened to by listeners of the shows that you enjoy. Maybe when Spotify launches its Tiktok-like feed, they will finally crack it? (I doubt it).
Podcasts have never had good discoverability and we are finally seeing the consequences of that. That’s why one of the only ways to grow a podcast is via video since YouTube, Tiktok, and Instagram do have good discoverability, which is why so many podcasts (like The Filmcast!) have added video components in recent days. Quah also predicts that we’ll see more publishers consolidating multiple shows into one feed.
Is there any hope for podcasting? Absolutely.
There are still thousands of people out there making a living off of podcasts (I am one of them!) and that will continue to be true for a very long time. In particular, the Folks Gabbin’ podcasts will always exist (because you can literally make one using a smartphone and nothing else) and have the potential to make decent money. All you really need are 1-2K paying fans to have a solvent podcasting company.
In the years to come, I think we’ll see changes to how companies make Highly Produced podcasts with an emphasis towards more financially sustainable models, more video, and better discoverability. The days of wild growth and speculation are over. The ceiling has been found. But that ceiling is still pretty big and can still be pretty profitable.
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Other Stuff I’ve Made
On Decoding TV, Kim Renfro and I are recapping this season of Succession! Check out our conversation about the latest episode. And for paid members, David Cho and I are doing bonus episodes discussing how realistic Succession is.
Also on Decoding TV, we’re trying something new this season and posting highlights on YouTube. You can watch one of them below.
On The Filmcast, we reviewed Dungeons and Dragons: Honor Among Thieves, which is a delightful romp.