The End of Podcasting's Direct-Relationship Model Is In Sight

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Spotify and Pandora are coming to podcasting with more than just bags of money. They're coming with teams of data scientists and fiduciary responsibility to make money. That's going to upset the Apple cart.

As podcasters, we have a lot of choice. We choose what we want to say and how we want to say it. If we’re a podcast with a large enough audience, we get choose which advertisers we allow on the program.

Of course, listeners have a lot of choice as well. But right now we're guessing that our choices are going to resonate with our audience. We’re forced to guess a lot because we have an incomplete understanding of what people want.

For 16 years, we’ve had only the most tenuous of grasps on the actions and desires of our audience. We put our content out, try to get people to subscribe, check to how many downloads we received on various episodes, and go about our business with a vague unease that our understanding is incomplete.

Advertisers know our understanding is incomplete, so they make us use special coupon code unique to our show. Yes, they want our download counts for episodes where their ad ran. But advertisers care more -- much more -- about the number of times that special code was used to redeem the offer.

But At Least We Owned Those Direct Relationships, Right?

That model may be on its last legs, thanks to Spotify and Pandora. Until now, the “keep people listening” incentive hasn’t been a big factor in any of the podcast listening apps/services/directories. But with Spotify and Pandora, “keep people listening” is directly tied to their bottom line. Those two firms need you keep listening and using their app. And not just once-in-a-while. They are financially incentivized to suggest different content to you depending on location, time of day, interests, even your current mood.

You could argue that we podcasters have been trying to keep people listening to our shows all along. And I’d argue that we’ve largely failed at those attempts.

Barring the occasional binge-listen (which I’ve certainly done), we just don’t get much support from the current app offerings. Yes, we can (and do) create compelling content our listeners want to keep consuming. But ultimately, it’s up to the listener to decide if we’ve succeeded in our efforts.

Today, Podcast Listeners Have All The Power

You really can’t go wrong putting the choice in the hands of the listener, can you? Well… maybe we should analyze that. It’s worth remembering that ultimately, the listener will probably always have the choice to listen or not. They get to choose if they subscribe (whatever that means tomorrow) to our show or not. They get to choose if they actually listen to an episode of ours or not. Many of us working podcasters are so dedicated to this idea of listener choice that we ourselves become choice-loving listeners, gravitating toward power apps that give us extreme control over what and how we consume other podcast content.

We take this choice-first approach when it comes to advertising too. So much so that podcasters often own the direct relationship with their advertisers. We seek out new advertisers (because growth) via direct outreach as much as we can.

Or we lean into the choice-first approach when cultivating the most direct of direct relationships with our listeners, spending our precious time making extra content or merch that we directly sell to our listeners, either as one-off sales or recurring memberships. Because that’s what we think we want as listeners too.

But Are Listeners Wielding That Power Correctly?

Every aspect of that power dynamic will be impacted once the data scientists from Spotify and Pandora dig into actual, real consumption of podcast content. They don’t have the same limits as podcasters. They don’t have the same limits as podcast hosting companies. They don’t have the same limits of other podcast listening apps.

Because they’ll own the entire stack from hosting, to directory, to listening app; their data scientists will have unique insight into the behavior of listeners -- actual listeners -- across a myriad of podcasts and episodes.

The power of that extensive graph should not be underestimated.

A Podcast Recommendation Engine That Just Works?

It’s an inevitability that a significant portion of podcast consumption on Spotify and Pandora will not require a conscious choice from the listener. Heck, I wouldn’t be surprised if choice-less listening is how most listening happens on those platforms.

Isn’t that a scary thought?

Choice-less advertising is probably also coming, a Holy Grail-like concept that requires the new model being deployed by Spotify and Pandora. I don't think it's crazy to assume content creators would be incentivized with a share of ad dollars. And if they can help podcasters make the kinds of ad-friendly content that attracts even more advertising dollars, rest assured they’ll work with podcasters to determine what sorts of content we should be creating to maximize our revenue. And theirs.

This effectively means the industry will shift away from the direct relationship with listeners or advertisers to a direct relationship with Spotify and Pandora. Talk about a different model.

For those successful podcasts clinging to the notion that big acquisitions for exclusive content will mean less competition and therefore a chance for even more and better direct relationships with advertisers; they’re right. For now.

But it's going to be easier for those advertisers to spend their monies directly with Spotify and Pandora. Less friction and a bigger share of voice is a part of their future decisions. But their proprietary, network-wide data will be the one thing a single podcaster will never be able to replicate.

So cash your checks now, because direct relationships with advertisers might dry up tomorrow.

You Say That Like It’s A Bad Thing

There are lot of ways this could go bad, as I’m sure many people will soon tell me about on Twitter. But what they see as bad might actually be seen as good by the choice-less listener.

But painting an inevitable future as good or bad isn’t helpful. It’s still coming. And it will be different than what we have today.

I know this is a challenging thought-exercise, pondering a world where data mongers Spotify and Pandora fundamentally change how people listen to podcasts and how content for podcasts are created. You might need help thinking through it with a fellow podcaster in your circle. So please share this episode with them. Even if you think me a crazy person and want to use my thoughts as a punching bag. Go for it! Helping spread the message about Podcast Pontifications to other podcasters is always appreciated.

And if you don’t think I’m crazy and would like to give me some direct support while it is available, you can go to BuyMeACoffee.com/EvoTerra and... buy me a coffee. Monthly contributions are available and appreciated since neither Spotify nor Pandora are likely to be lobbing bags of money at me anytime soon.

Enjoy the rest of your Monday! I shall be back tomorrow with yet another Podcast Pontifications.

Cheers!

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PPS3E9 PPS3E9 The End of Podcasting's Direct-Relationship Model Is In Sight - Transcript

Evo Terra: [00:00:00] Own the relationship is practical advice for podcasters that works today, but it might not work tomorrow in a world with less guesswork about what people want from their podcasts.

[00:00:17] Yeah. Hello and welcome to another podcast. Pontifications with me, Evo, Tara. So Spotify and Pandora are coming into podcasting with more than just bags of money. They're coming with bags of data scientists, and fudiciary responsible the ability to make money. That's going to upset our little Apple cart we have here in podcasting.

[00:00:42] Allow me to explain, you know, we have a lot of choice as podcasters. We choose what we want to say, how we want to say it. Some podcasters with large enough audiences get to pick and choose who they want to have on their show is advertisers. And I guess everybody who is ultimately podcasting for money gets to have a choice in that.

[00:01:05] And of course, listeners get to choose what they want to listen to. This is about us, the working, pod-casters not the listeners. Even though everything we do is for the listeners. I totally get the irony. What am I what I'm saying right here. But right now we're guessing a lot. We really are guessing a lot because we don't have a lot of the well data necessary to make some solid decisions.

[00:01:27] As we know nothing new about that, it's been that way for 16 years, we put content out, try and get people to subscribe, check, to see whether or not the episodes were downloaded. Go about our business. We have advertisers come into our show. They gave us a special coupon code. That's unique to our show.

[00:01:47] Count the number of times it was downloaded. And then see how many of those coupons show up over at their site. Pretty simple. And that enables, or that is enabled by a direct relationship, direct relationship with advertisers, direct relationship with listeners, all of that. But I do worry that that model is not going to be around forever.

[00:02:10] Like very soon, perhaps whatever that means because of what our friends at Spotify and Pandora might actually do to the space. And you can decry it as a problem. All you want. That's fine. I just want to talk about the process ramifications and here's what it is. Both of those apps are really good at keeping you listening to that app.

[00:02:35] Continuing to serve content to you through those apps so that you stay listening on those apps or that app, and to jump around, to do other things. And it's not just, you know, once in a while, listening, it's kind of nonstop. The app behaves differently depending on your mood, your styles, their interests, everything.

[00:02:52] It's all nice and customizable to keep you going through and listening. For all of our efforts to try and do that in podcasting, they've all tended to fail. We're just not really good at keeping people listening. If we've got really compelling content, people will continue to listen. I know I've binged entire weekends, but I didn't really have any support from the app I was using to do that.

[00:03:17] And in fact, it seems like a lot of the efforts in apps these days are all about putting the choice in the hands of the listener. To what they are choosing to listen to within, within content, they've already subscribed to whatever subscribed means. These days we've decried the problem with, with discovery for the longest time.

[00:03:40] And our apps are designed more for power users than they are for regular people trying to get through all of, all of this stuff. So that direct relationship. That I mentioned again, there's two different ways that this, you direct relationship with your advertisers. If in fact you're an advertiser brand, or if you're a direct relationship with your listener.

[00:04:00] I think a lot of that is changing. I think even the direct relationship that we have for extra content bonus content that we put out through these private fees. I think that might even be impacted when the data scientists from Spotify and Pandora come along and look at what real consumption. Looks like, and look at what all of the other content that's not being listened to, not being streamed that was presented.

[00:04:27] Why not? All of those pieces of information are going to come together. The ultimate. Goal of that is to make sure people continue listening to content on those apps, which is very different than what we have as pod-casters with our goal and objective, which is to keep people listening to our content as much as possible.

[00:04:50] So that's a difference and we can try and fight that we can try and own the direct relationship. We can try and keep pushing people to subscribe on our favorite preferred app. But I don't really think it's going to work. Honestly, it's kind of an inevitability that accompany lack of Spotify and Pandora.

[00:05:12] Now we have both of them coming into play. I'm going to help make those decisions for us. They're going to become the better app, not necessarily the better app for power users. Those of us that have been doing it for dozens of years or a dozen here as you can be dozens, not run that long yet or 16 years.

[00:05:29] We're different. These new masses are very happy to let the systems work. Let them make recommendations. It's already happening on advertising as well. We just heard about some news, great big deals that Spotify is landing. Pandora's going to do the same exact thing, and they're gonna want to appease those advertisers because it's a revenue source.

[00:05:52] For them, they might even, I don't think it's a far cry to, to assume that these companies, Spotify, as in the Pandoras, wouldn't incentivize content creators, that's us podcasters to make the kind of content that is ad friendly that advertisers want to advertise on. So they have more inventory to sell and they in turn would share some of those revenues.

[00:06:17] With us a model that's already well established in other places, less guesswork, less direct relationship, more reliance on the data, more Alliance on the data for the listeners to figure out what they should be listening to more reliance on data from podcasters, like us to determine what sorts of content we should be creating so that we can maximize our revenue.

[00:06:44] So now, instead of that direct relationship with listeners or advertisers, our direct relationship might be with Spotify and Pandora, which is a different model. And if you say, well, Hey, that's fine. I'm happy to let all of those monies flow into those places. I'm going to keep my direct relationship. You might not keep your direct relationship with your advertisers.

[00:07:07] Because it's going to be easier, less friction for them to go spend their monies directly with the Spotify and the Pandoras, it's easier to spend more money. It's better to spend more money for them. So your direct relationships that you have with advertisers might dry up your direct relationship with listeners might change when Spotify and or Pandora are making suggestions of other content that's better than yours.

[00:07:36] Just thinking about that for a moment. Think about what that actually might mean. What happens when the direct relationship that we have fought so hard for in podcasting disappear. Okay. It's definitely worth pondering and pins. Why is the subject of podcast pontifications this is a challenging thing to think about and you might need help thinking through it with someone.

[00:08:05] You still have a direct relationship with your friends who are also podcasters? I would appreciate it. If you would share this episode with them, even if you think me a crazy person, it's good to have the conversation. So share this episode, helping spread the message about podcast pontifications to other podcasters while you're at it is always appreciated.

[00:08:25] And if you would like to still give me some directors direct support while it is available, you can go to buy me a coffee.com/evo Terra and buy me a coffee. Monthly contributions are available since the show does not run advertising. And unless Spotify comes with bags of money for me, probably not happening anytime soon.

[00:08:45] So again, buy me a coffee.com/evo Terra. That's it enjoy the rest of your Monday. I shall be back tomorrow with yet another podcast. Pontifications cheers.

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