Podcasts are earning a strong foothold in digital media. The popularity of podcasts such as “Serial” and “This American Life” aided the medium in reaching new audiences. In fact, Edison Research reports an estimated 57 million Americans over the age of 12 listened to a podcast in January and February of 2016.
The Knight Foundation recently made several investments to support podcasting programming and on-demand audio formats. In the report “From Airwaves to Earbuds,” the Knight Foundation partnered with Lutman & Associates and Dot Connector Studio to identify and assess the impact of these investments. To date, the Knight grantees are successful in growing their audiences and finding new ways to attract younger listeners as well as revenue.
The grantees in the digital transformation of audio content include:
Project Carbon supports the development of a seamless digital listening platform across all NPR affiliates and available through all digital devices.
Radiotopia helps independent media makers develop audiences and revenue for their work.
Gimlet Media develops and release podcasts for its network.
New York Public Radio develops and share the Discover app, WNYC’s mobile app for on-demand listening.
RadioPublic PBC helps listeners discover, engage with, and reward creators of stories, podcasts, and other audio.
The research identified 10 key themes:
Podcast audiences are growing. At least one-fifth of U.S. consumers (21%) have listened to a podcast compared to 12% in 2015 according to Edison Research. As you can see from the chart, the podcast audience listens to less radio and more podcasts than the average.
Digital-first companies are building podcast audiences without a need for legacy broadcast systems or audiences to maintain and are more agile to develop strategies to capture useful audience data.
On-demand listening offers new and creative ways to offer local news stories.
Racial and gender diversity is needed in podcast hosts, only 22% of podcasts are hosted by women, although that’s up from 12% in 2015.
Public Radio is a key talent pool for the podcasting medium.
Podcasting is a great space for experimenting new skills, styles and techniques.
Data standards and methods of shared metrics are needed in on-demand audio and podcasts.
Identifying new revenue paths is important. Podcasting recently used CPMs to enlist advertisers.
Podcasting and on-demand audio formats are partners in the radio space. Leveraging this synergy could prove a positive move
Podcasting can offer a powerful discussion. It presents a unique experience because the content evolves in the mind of the listener.
The report raises several questions about the future growth of the medium: Is there enough scale in podcasting today to be a profitable medium? Can it serve as a medium for interesting and original brand integrations? At this stage, there’s no one-answer-fits-all for how podcasting should generate revenue. However it is clear that podcasting offers a level of engagement with audiences that offers an opportunity to experiment with new forms of revenue generation.
Signal Media co-founders: Miguel Martinez and David Benigson
In December, Hearst Ventures participated in the Series A round of funding for Signal Media, an artificial intelligence-powered information company that helps its clients monitor the world’s news media. Signal CEO David Benigson offers insights into the platform’s technology, which is designed to help businesses make smarter and faster decisions.
How does Signal track and monitor news cycles across global markets?
David Benigson: Signal is an artificial intelligence company with the goal of transforming the world’s news into accessible, actionable bits of knowledge. We apply cutting-edge technology that we have developed here, in house, to enable clients to monitor the news for whatever they deem important: company mentions, client news, trending storylines and more. Our motoring tool analyzes news in real time across over 100 markets and 40 different languages. We are trying to bring clarity to the news and get users the information they need to know, along with information they didn’t even know they needed.
What types of clients does Signal serve?
Benigson: We have found success with clients across a range of fields—from big financial institutions to communications firms. One of our initial areas of focus was transforming the way public relations departments work and receive coverage concerning their brands. Increasingly, we are seeing the value of our service diversify into areas that are beyond the scope of our initial plans, including client intelligence, horizon scanning, and regulatory change.
Ultimately, we enable our users to search for companies, topics and themes of interest. This provides them with the ability to track their reputation, understand wider market insights and operate more effectively across the board.
How do you see clients most effectively using Signal on a daily basis?
Benigson: Let’s take a big wealth management firm as an example: Previously, they were only able to track mentions of themselves in the news. Today, they are able to not only monitor each of the subdivisions of their very large company, but also monitor their competition, key spokespeople, clients and key trending topics that impact the regulation of their business. And they are able to do all of this within our single platform.
What we have been able to do is allow our clients to have specific and narrow searches which provide only relevant information. Our search results give a holistic view of the interests of the company and the sphere in which they are operating. Additionally, users are getting this information in real time and from all across the globe.
Can you share some details about the experiences that led you to create Signal?
Benigson: Initially,I studied law and then worked with a few startups. After that, I worked with chef Jamie Oliver, who himself created a media company. I founded Signal when I was 24 years old, so I had very little direct managing experience. The process of launching a company has been both amazing and challenging. I’ve learned so much over the past three and half years as the company has scaled up.
The original idea for Signal came from speaking with people in the industry about how they were receiving news every day and what tools they were using to obtain that information. It rapidly became clear that there was a big gap in the market for a tool that could more effectively help people make sense of the vast and ever-growing web of information available online.
What makes Signal different from the other services that are offered in this field?
Benigson: It really starts with our artificial intelligence technology. Signal is looking to automate things that have, up until now, been done manually. Artificial intelligence means that, in a sense, we can be uniquely ambitious. There are millions and millions of new documents added to the internet each day, and processing that data and connecting that information to users in real time is only possible because of our powerful, intelligent technology.
On top of that, our user experience and customer service is a real draw. We have spent a lot of time thinking about what happens when a client is trying to work with Signal, and we want to make that process as frictionless as possible. Our strength is that we are able to combine the power of our technology with the human experience of using our platform. Because of that, our product delivers an unparalleled experience that sets us apart from the competition.
Benigson: We have gone through quite seismic changes since developing the initial concept, and we are now servicing around 100 corporate clients. Signal has concentrated on adding value to our users by identifying what they continue to struggle with when it comes to monitoring their brands. We want to provide end-to-end solutions, so we continue to seek user feedback. Signal has employed user-centric design processes that ensure we have regular interactions with our clients—this all feeds directly into the product development process.
Who makes up the Signal team?
Benigson: Our team has grown to around 50 people. Two years ago there were only 10 of us, so we are expanding rather quickly. Half of the team is made up of product developers, tech engineers and data scientists, and the other half is made up of sales, marketing and client relations employees. Our latest round of fundraising will allow us to invest in both of these key areas at a larger scale.
How are you working to secure more clients based outside of the U.K.?
Benigson: Signal has a small operation already running in New York, but we want to continue scaling that up. We see the U.S. as being the largest and most attractive market for us, and we are extremely keen to make that work. We are always working with our sales and marketing teams to improve how we reach people outside of our current core areas.
What’s next for Signal in 2017?
Benigson: We are continuing to expand the data sets that we use, including in the legislative and research fields. The broader the selection of data we aggregate, the more we are able to apply our products to people in large organizations. We are also looking to launch new products on top of our core platform. Right now, we are gearing up to launch a specific product that allows our clients to track changes in regulation as they happen, helping them to remain compliant. We also have a mobile app that we are preparing to launch, as well as a few new tools within the platform itself.
From the Signal perspective, what are some of the biggest benefits to your partnership with Hearst?
Benigson: A big part of Signal’s platform is how we leverage news media, and there is no better organization at the edge of innovation in news distribution than Hearst. They have offered unparalleled strategic advice when it comes to our expansion and how to leverage technology to get the most value. I also think that when looking at U.S. expansion, Hearst will be a key player in helping us build a network. We are really excited for the opportunity to work with, and learn from, the Hearst Ventures team.
Media companies are in the midst of a massive shift in revenue strategies from one primarily focused on advertising to one that is more diversified. Without a doubt, subscriptions are highly attractive, given that they guarantee a steady stream of income that is far less volatile than the digital ad market. Ads probably aren’t going away anytime soon, but media outlets are looking for new ways to monetize beyond the traditional ad, and subscriptions offer one way to do that.
As Facebook and Google dominate the ad market, media companies have had little choice but to look for other ways to make money. The Wharton School’s Knowledge@Wharton blog published a post in November, TheEndofDigitalAdvertisingasWeKnowIt, which suggested that even Facebook could be facing an ad revenue shortfall sometime in 2017. “Facebook has said that ‘ad load,’ or the relative volume of advertising versus content on its pages, isn’t going to be able to fuel revenue growth as much as it has to date,” according to the blog post.
Certainly issues like “ad blindness” and theriseofadblockers has contributed to worries about ad-driven revenue. However, the attraction of incorporating subscriptions into the mix also reflect the practical limits of the ad model and the advantages of securing a steady stream of income from loyal subscribers.
Certainly, software companies have seen the subscription light and heeded the siren’s call of recurring revenue. As an example, Adobe has completely transformed from a company that once sold boxed software to one that sells subscriptions – and hasthrivedunderthenewapproach.
Moving to a subscription model Media companies believe they can get a piece of that recurring revenue action and gain the same advantages as software companies. Robbie Kellman Baxter, principal at PeninsulaStrategies, a firm that works with companies making a shift to subscriptions, says subscription revenue works best for media outlets with a specific focus. “Subscription models are the answer for many of the best content providers, especially those with content that is targeted for a specific audience. The more specific the audience, the more likely subscriptions will appeal to them,” she explained.
The New York Times is a great example of a company that is making an aggressive push to grow its subscription revenue. It recentlypublishedareport that shows subscription revenue has surpassed advertising as the company’s primary revenue source. The company now has 1.5 million digital-only subscriptions, up from one million a year ago, and from zero just six years ago.
While the New York Times doesn’t see ads and subscriptions necessarily competing, the company is clearly putting more focus on the subscription business and is hoping the quality of its content will drive more interest over time. “We consider ourselves a subscription-first business. We believe that the best business strategy for The Times is to provide journalism so strong that several million people around the world are willing to pay for it,” a New York Times spokesperson said.
And The Times is not alone. Eric Hellweg, executive editor at Harvard Business Review, says that focusing on subscriptions is really about facing the reality of a changing ad market. “It’s pretty tough out there for ad-based media businesses if you are not Google or Facebook. And I think that it’s becoming clearer to media executives that the ad market is goIng to get tougher in the foreseeable future. It makes a lot of sense to look at subscription models as a possible way forward,” he said.
Shifting focus Baxter says that the shift to subscriptions requires a fundamental focus on audience by media companies. “It is not enough to have eyeballs, they need to attract the same eyeballs, day after day, making their content a habit for their subscribers. This means that they really need to know their audience, and to tap into their changing needs,” she said.
HBR’s Hellweg sees it in similar terms. “To get a subscription business right requires some pretty significant changes, that in many ways cut to core of many media businesses. First, you need a product people will pay for in a meaningful way. Then you have to shift to being user-centric, rather than an ad based business, because it’s essential to understand your users and how to serve them,” he said.
When you shift the focus to the audience, it opens up new business opportunities, Baxter says. “When you look at what the audience really needs, why they consume your content, you realize that they aren’t just consuming in a vacuum—they might be trying to be successful in their careers, or to look smart to their friends, or to be in the know about their favorite sports teams. All kinds of new options for features emerge including online community, events and advisory groups,” she explained.
Converting from free to fee Realizing that the subscription model could be the best way to go is one thing, but getting people to subscribe is another. It can present a challenge to media companies as they make this change, especially since online audiences have come to expect free content.
Jonathan Anastas from The Enthusiast Network, a media company focusing on action sports and automotive enthusiasts, says in 2017 it’s not that difficult to convert people to be paying customers if you appeal to something they’re passionate about. “People seem more willing than ever to pay for access to the content they love. So, the answer seems to be some combination of super high-end quality in the programming itself or how it’s delivered, a reasonable value proposition, an exclusivity window and passionate content or passion around the content. Give people three of those things and you have a paying customer,” he said.
Andrew Sollinger, EVP for subscriptions and events at Business Insider, agrees that if the content is good enough, people will pay for access. “Readers have grown increasingly sophisticated when it comes to understanding what makes for high-quality content. So our strategy of converting prospects to paid subscribers is a simple one: we provide enough access for readers to get a real sense of it. Ultimately our coverage sells itself,” he said.
As the ad model becomes more difficult to sustain as a primary revenue generator, media companies are seeking alternative ways to make money. While eCommerce, conferences and other means of income certainly offer a way, the subscription model with its recurring revenue stream is one that could be increasingly attractive moving forward, especially for specialty media with something unique to offer the audience.