July 31, 2021
6 minute reading
Opinions expressed entrepreneur The contributors are their own.
According to data from Grand View Research, the estimated value of the global podcast market in 2019 is USD 9.28 billion, with an estimated annual growth rate of 27.5% by 2027. As of the date of this article, there are approximately 2 million active podcasts, including more than 48 million episodes (the latter is almost four times as many as in 2018). The accelerated growth of the podcasting space is and will be the continuous result of improvements in the bandwidth and connectivity of smartphones and digital assistants.
Audio streaming giant Spotify attributed the popularity of podcasts in part to its significant increase in subscribers by 24% in the last quarter of 2020, which also helped increase advertising revenue by 29%. The doubling of podcast audiences confirms Spotify’s decision to invest heavily in talented content generators and its shift to markets outside of music; facing competition from Apple Music and Amazon Music, the company realizes the need to expand more widely field of.
For example, Joe Rogan is one of the most successful podcasts in the world. He signed a multi-year exclusive agreement with Spotify, reportedly worth $100 million. Since landing on the platform in September 2020, in just six months, it has become the company’s number one podcast in 17 regions. Such an expensive transaction is rare for the industry. Of course, it is usually based on the principle of openness rather than exclusivity, but the behavior of spending a lot of money on non-core business media illustrates this-a major shift in Spotify’s strategy, but its Necessary for growth.
In addition, Spotify’s acquisition of the podcast technology company Megaphone in 2020-with a focus on podcast hosting, analytics and monetization technologies-means that the parent company can now provide streaming ads to third-party publishers hosting its content on the Megaphone platform Insertion (SAI) system. Real-time advertising can now be targeted to specific users, which is different from other platforms, which only replace ads when targeting capabilities are limited. In short, creators will be able to monetize their podcasts more effectively and give Spotify the opportunity to become part of the broader advertising market.
related: Entrepreneur’s podcast roster
What is Spotify’s podcasting strategy and how does it promote growth?
During the Spotify earnings conference call, the company’s CEO Daniel Ek commented that so far, its podcasting strategy has focused on increasing the number of listeners for existing users and maximizing the value of existing user bases, in part by enabling them to listen Diversified content. This strategy has two core effects on the business model.
1. Higher audience participation has enabled Spotify to create opportunities to monetize its user base through targeted advertising (hence the acquisition of Megaphone) and increase the number of paid subscriptions.
2. Revenue is scattered among podcasting activities with high profit margins. The company does not have to pay a certain percentage of revenue to the record company; therefore, it can take advantage of fixed costs.
With increasing competition, exclusive deals such as Rogan’s are being developed to bring listeners from other platforms to Spotify. The company has also increased in-house production to make more efficient use of budget. In addition, its existing music streaming recommendation engine can be applied to podcasts, making it a leader before the inevitable competition from Amazon, Apple and Google.
What are the benefits of this strategy?
There are many online guides to help you start podcasting. Anyone can do it, but as readers imagine, few people can succeed. If you listen to Joe Rogan’s story and read his backstory, the presenter sees his extraordinary career remodeling as a hobby that has just become a hot topic, but the truth is that it involves multidimensional work. . Rogan creates high-quality content—mainly interviews with famous or other well-known guests—that people will come back to watch. The growth of the show is organic, without any paid marketing. If others can attract audiences with the same unique content and style brand, it may also bring growth and revenue.
According to data from content marketing consulting and social media strategy company Convince & Convert, in 2021, 80 million Americans report listening to podcasts every week. This means that there are more podcast listeners than US Netflix account owners (69 million). Statistics show a significant shift from video media to audio media, with podcast fans listening to an average of eight shows per week. In addition, the hosting, monetization, and growth support company Acast’s episodes have an average listening time of 28 minutes. Few other media channels can have this level of engagement.
Although successful casts certainly don’t have to be lengthy. 2 minutes ZenFor example, toothpaste produced by the toothpaste company Zendium (Unilever as the parent company) provides simple “techniques” that audiences can apply to develop healthier minds and bodies. One of the suggested products might be Zenium toothpaste—an idea that both engages the audience and connects them with the product, while rethinking an activity that is usually considered tedious.
Let’s examine Spotify’s model to find out the lessons that can be learned:
1. They gain more listeners (customers) by positioning podcast hosts/guests as experts in the field, creating communities and discussing current and related topics, just like Joe Rogan did.
2. Use podcasts to develop other media. As far as Spotify is concerned, its purpose is to introduce music streaming through exclusive deals.
3. Increase brand awareness through guest interviews, sponsorships from other companies, or becoming guests of other podcasts.
4. Turn listeners into customers, such as using Zendium — the goal is to promote products through calls to action in podcasts.
5. The company’s internal updates can be done through audio podcasts and uploaded to the company’s server or cloud for employees to listen to in their leisure time. They will help speed up participation in the workplace to speed up actions and improve performance indicators to promote growth.
For listeners, audio podcasts are easy to digest because they can be listened to in the shower, running, or dozens of other daily tasks. Podcasts can also be provided within a few hours of the start of the recording, which can promote the content to a global audience almost immediately. If the message you create resonates, loyal listeners will soon become customers.
Why small businesses need podcasts
Compared with more than 600 million blogs, the number of available podcasts over 2 million is also amazing. To a certain extent, this means that podcasting as a business growth strategy is still a relatively easy fruit to pick. Now companies that start their own businesses still have the opportunity to become pioneers in the industry’s niche. In addition, given that Google research shows that consumers need to consume 7 hours of content before making a purchase decision, the above-mentioned average listening time may be a particularly useful component of content marketing.
Podcasts will continue to exist, and it is time to treat them as valuable internal and external business growth strategies.