It’s a podcast about podcasting! About the state of the industry, that is. Because a lot has changed since we recorded “a podcast about podcasts” about four years ago: podcasts, and interest in podcasting — listening, making, building — is growing. But by how much, exactly? (since various stats are constantly floating around and often out of context); and what do we even know (given that no one really knows what a download is)?
And in fact, how do we define “podcasts”: Should the definition include audio books… why not music, too, then? So much of the podcasting ecosystem — from editing tools to the notion of a “CD phase” to music companies like Spotify doing more audio deals — stems from the legacy of the music industry. But other analogies — like that of the web and of blogging! — may be more useful for understanding the podcasting ecosystem, too. Heck, we even throw in an analogy of container ships (yes, the ocean kind!) to help out there.
If we really think medium-native — and borrow from other mediums and entertainment models, like TV and streaming and even terrestrial radio — what may or may not apply to podcasting as experiments evolve? In this hallway-style jam of an episode, Nick Quah (writer and publisher of Hot Pod) joins CFI general partner Connie Chan (who covers consumer startups among other things) in conversation with Sonal Chokshi (who is also showrunner of the CFI Podcast) to talk about all this and more. We also discuss the obvious and the not-so-obvious aspects of monetization, discovery, search, platforms… and where are we in the cycles of industry fragmentation vs. consolidation, bundling vs. unbundling, more? And where might opportunities for entrepreneurs, toolmakers, and creators lie?
Show Notes
Defining what a podcast is [2:04] and why audio has become so popular [6:45]
Key statistics and getting data on usage [8:24]
Issues with monetization [12:34] and the logistics of RSS feeds [17:55]
Seasonality and binge-listening [20:32]
Further discussion around analytics and monetization [28:38]
The pros and cons of interstitials [39:35]
Competition in podcasts, the rise of platforms, and centralization [46:38]
Terrestrial radio and why the audio world needs to fragment [59:21]
Advice for starting a podcast [1:04:16]
Transcript
Sonal: Hi, everyone. Welcome to the “CFI dcast.” I’m Sonal. So, I’m super-duper excited today, even way more than usual, because this episode is all about podcasting. For newer listeners, we actually did an episode called “A Podcast About Podcasts” about 4 years ago, which you can find on our website, CFI .com. But today we’re focusing this podcast about podcasting, since the podcasting ecosystem has evolved and changed quite a bit since then. By the way, I had hoped that Roman Mars, who was on that episode, would join us again, but he lost his voice so couldn’t.
Our special guest today is Nick Quah, who writes “Hot Pod,” a newsletter that I’ve been following since very early on and has grown to be a go-to source all about the podcasting industry, with analysis, insights, and more. He also publishes and contributes to “Vulture” on similar topics. Also joining us for this episode is CFI general partner Connie Chan who covers consumer, the future of media, and Gen Z social, as well as trends from China, and has observed the podcasting phenomenon there and shares ideas on what more platforms can do here. And the three of us do a hallway-style jam, taking a longer pulse check on where we are right now in the podcasting industry.
Speaking of, since we do mention some companies, please note that the content here is for informational purposes only, should not be taken as legal, business, tax, or investment advice, or be used to evaluate any investment or security, and is not directed at any investors or potential investors in any CFI fund. For more details, please also see CFI .com/disclosures.
So we began with the latest stats on the industry, touching on structural factors and more, for about the first 15 minutes. Then we do a bunch of lightning-round style takes on how other content and entertainment models may or may not apply to podcasting for about the next 30 minutes. And finally, we go into monetization platforms, analytics, and more — which we also touch on throughout the episode — including impacts on creators. And we end on recent news and moves in the space, such as Spotify Gimlet, how to think about terrestrial radio, and more. But we began by defining a podcast, which seems obvious but isn’t, and is a rather existential question. So, guys, what is a podcast?
What is a podcast?
Nick: So, I mean, the real interesting thing here is, we’re in the midst of a really interesting moment of change, and there is internal conflict within the podcast community about that question. So, historically it’s been largely tethered to the notion of the RSS feed. It’s basically an audio file, or a medium of distribution, that largely happens through, you know, the technology that was carried over from blogging. And now, with the entrance of Spotify, and Pandora stepping up, and Google beginning to do whatever they’re going to do on the search engine side…
Sonal: And Apple, already, as an entrenched player as well.
Nick: Yeah, absolutely. iHeartMedia. And Luminary just announced their, sort of, big $100 million fundraise — and the fact that they’re going to launch in July — a couple days ago.
Connie: With a lot of exclusive content, right? So how does, like, exclusive podcasts fit in with the old definition?
Nick: You know, especially with the Luminary announcement, there was, like, a strong pushback from parts of the community that has been around for a while and, generally, folks who really believe in the open ecosystem. And so we have a situation in which, like, you know, the technical definition is not the popular definition anymore. And if we go from the perspective of what the ordinary consumer thinks of a podcast, that is — it becomes a cultural question, not a technical question.
Sonal: Which, by the way, I want to say, parallels the history of the web. Because this, to me, reminds me, very much, of early blogging…
Nick: Absolutely.
Sonal: …and debates about what is a blog, what is an article, what is a website?
Connie: Yeah.
Sonal: And there was this almost religious, existential debate between the early, kind of — in fact, some of the same people because Dave Winer, one of the people who invented…
Nick: Who also was important to the development of podcasting.
Sonal: Right.
Nick: It’s the same figure, yeah.
Sonal: Exactly. But I think he was technically the first person to do a podcast, like in 2003 or something…
Nick: Right.
Sonal: …or one of the early people. And he’s also who specified the RSS feed, which drives the pipes, and plumbing, and ecosystem of podcasting.
Connie: But today users don’t even think of podcasts that way. It’s like, if it’s just recorded audio of people talking, oftentimes we’ll just call that a podcast.
Sonal: Yeah. One of my favorite things is when the people always call our videos podcasts. Like very few people find that…
Nick: I’m mean, that’s a holdover. Like Joe Rogan still does that. There’s a lot of people who still — dual video and audio, and still call it podcasts. I mean, the way I see it is that the tension has always been between people who see podcasting as the future of blogging, and people who see podcasting as the future of radio.
Sonal: Yes, exactly. You nailed it.
Nick: And we see that tension clash many, many times. And I think we’re in a place where that no longer matters because, ultimately, the mass consumer will lead us where they want to go.
Sonal: Yes. And like the web, the analogy that I would draw is to the advent of the graphical user interface, and how browsing, computing, etc. — there’s always a phase in every technology where there’s a GUI phase, where once you have an interface that’s user-friendly and easy to navigate.
Connie: Right.
Sonal: And what’s interesting about this is that we’re in the phase where the listening has become easy to navigate.
Connie: And more accessible.
Sonal: More accessible.
Connie: Through various kinds of hardware, too. For example, listening to podcasts on their drive to work, because the cars are enabled with podcasts.
Sonal: Right, like the smartphone-connected car, essentially.
Connie: Or AirPods making it so easy to listen to something while multitasking.
Sonal: And in that sense, podcasts are different than audio books, obviously, just for the sake of definition.
Connie: But I would say, like, you can argue that, over time, that even that definition may blur.
Sonal: Of audio books and podcasts?
Connie: Right.
Sonal: Yeah.
Connie: Like, one day a podcast might just be thought of as, like, a self-published audio book.
Nick: I have long believed that audiobooks should be central to the conversation as well, especially a couple of years ago when Audible built, sort of, an original programming team that took after podcast-style programming. And the fact of the matter is — it’s like, these are all distributors and platforms of the same kind of good. It’s just that we think of them and we class them differently. And they also, sort of, are products of different economic systems.
Sonal: I do want to add to this mix, though, that I would not confuse music into this. And the reason is, first of all, from a creator perspective — every tool, until now, has been very music-creator centric for podcast editing, creation, etc. And so, there’s a really bad structural legacy effect of equating podcasting — I mean, we’re essentially bootstrapping tools tailored for music for podcasting, so the new wave of podcast native tools is really important. Full disclosure, we’re investors in Descript. And it democratizes the editing of podcasting because you can essentially edit audio like a Word doc. But the main point here is that I do think music should be treated very differently than podcasting.
Connie: I completely agree.
Sonal: Yeah.
Connie: To me, like, it’s audio with spoken word.
Sonal: Yep. Versus sung.
Connie: Yeah.
Sonal: So, I guess we’re agreeing on, just to recap the definition of podcasting — it is audio. It could potentially blur into including books. If not in a content perspective, then — to Nick’s point — then even in a distribution and business model perspective. But we agree that music should be treated differently.
Nick: Absolutely.
Sonal: And the common denominator here is spoken word.
Growing popularity of audio
Nick: The Infinite Dial Study, which is, sort of, an annual survey conducted by Edison Research — they just announced their latest results earlier this afternoon. The most interesting thing is that there were increases in both audio books and podcasting. So podcasting had significantly, like, a large leap this year. But on audio books, like, after a couple of years of largely being flat, it’s been increased again. And I think that’s a, sort of, really interesting question because I can’t quite think of a structural reason why that would be the case other than…
Connie: AirPods.
Nick: …it’s the, sort of, like tethered effect.
Connie: In addition to that, you have all kinds of really easy-to-set-up wireless speakers at home that also make it [easier] to…
Sonal: Yeah, like Alexa.
Connie: Yeah. To consume this kind of content.
Nick: It reminds me of, like, what people say about the Kindle and romance novels. It helped, like, sales increase because it made people, like, more willing to buy it and consume it, because then nobody would judge them.
Sonal: Oh, the judgment side. Interesting. For me, it’s actually ease of access, because I used to be — I’m really embarrassed to admit this publicly — I used to subscribe to the Harlequin romance on demand service, where you’d get, like, the books a month, and you’d pay, like, $11 or — I can’t remember what it was. Because I’ve always been a huge reader of romance novels as a very nice, lightweight thing to do. But what’s the analogy to podcasting? What’s the connection?
Nick: To me, I think it’s more ease of access around better hardware.
Sonal: On demand, get it quickly. So speaking of the data — and you mentioned that the Edison Research study came out today. And that’s, sort of, the definitive and longest running survey of digital media consumer behavior — in America, at least. But I hear a lot of mixed messages. I see, like, people cite this stat and that stat out of context. So, why don’t we just do a quick pulse check on what are the key stats. And Nick, maybe you could recap for us what the key stats or big trends to know are here.
Nick: Sort of, I think there are a couple of big takeaways here. One is, when it comes to the familiarity of the notion of podcasting — and this doesn’t mean people who heard the word actually know what it is — it’s officially hit 70% of all Americans. And when it comes to the number of people who’ve actually tried out podcasting — you know, maybe they didn’t stick around a bit but they just tried it, at least — it’s gone over 50%, so about — an estimated 144 million Americans. Retention rates are, sort of, like, really interesting. Like, monthly podcast listening is also going up. It’s now 32% of Americans, up 26% from last year. That’s a pretty big leap.
Sonal: I mean, just, that’s one third. That’s a lot.
Nick: Yeah. And there’s also a really interesting slide in here attributing some of the increase to Spotify. There is a stat here that shows, among Spotify listeners between the ages of 12 to 24, monthly podcast listening went up to 53%. And so, there’s a lot going on. I think, currently, it’s such a moment of flux. It’s a little unclear what the structural pillars are anymore. And I think this is one of those things where we’re just going to have to, like, look back at this moment to figure out where we turn.
Sonal: So, what’s a high-level recap on that summary of the stats?
Nick: The high-level is that this past year has seen an unprecedented growth. For the longest time, podcast growth has been steadily and slow, and now it feels like it’s taking some sort of a leap. And so, I feel like this past year has been the moment where it’s tipped into some form of mainstream.
Sonal: That’s fantastic. So, potentially, an “inflection point” as people like to say in the business.
Connie: The usage of podcasts and the consumption of it has risen dramatically in the last year or two. But what always shocks me is that the revenue that podcasts generate is still such a small amount, given how many hours people are spending consuming this kind of content.
Nick: So, there is a study out there from the IAB — the caveat being, it was funded and financed by a constellation of podcast companies — that puts the number at around 600 million-plus-plus this past — last year. And it’s projected to keep growing, of course. Monetization is a severe issue. And it largely has to do with the fact that podcasting, as a technology, hasn’t quite caught up to how the rest of the internet, kind of, works in terms of dynamic ad insertion. And it doesn’t allow, like, heavy increases in inventory and swap outs in inventory, in a way that a lot of advertisers are now accustomed to getting from, you know, marketplaces like Facebook.
Connie: And then, even that, like, from an advertiser’s standpoint, you’re paying per download, because you aren’t getting, like, these per-listen metrics back. So from the advertising standpoint, it’s still really hard for them to measure the ROI from sponsoring a podcast.
Sonal: Yeah.
Nick: Yeah. And that’s why, historically, we’ve seen a bunch of the activity among advertising from direct-response advertisers, because they have a secondary metric of conversions on their promo codes and whatnot. And what they’re able to find is that the conversion rates are good. But when it comes to something like a brand advertiser, or an advertiser that needs to, you know, lay an impression on a consumer over a 5-, 10-year period, they need to know that they’re hitting the people that they’re hitting.
There are a lot of movements right now towards standardizing what even a listen means. And this will become increasingly complicated as Spotify and Pandora…
Sonal: Everywhere.
Nick: Right.
Sonal: I mean, right now, you don’t know, is it a download, is it a click, is it open, is it <inaudible>? I mean, who the fuck knows? It’s, like, a mess.
Connie: Or like how long did you listen to it, right?
Sonal: Right, the engagement. So that’s actually what I care the most about as a creator. Because when I was at WIRED, Chartbeat changed me as an editor. And I need to know where people drop off. That is a number one thing. So I don’t know if you even know this, Nick. We were in the launch set for when Spotify launched their first move into podcasting, in 2015. They selected us as one of their media outlets, because our podcast was one of the very few that covered tech in a thoughtful way. And the reason I was so excited about Spotify — because Spotify didn’t really have much of a podcasting audience back then…
Connie: Yeah.
Sonal: …was they showed me this really beautiful dashboard that showed you the potential, and where people drop off.
Connie: But you don’t get that from all the other places…
Sonal: No, you don’t.
Connie: …our podcasts are distributed.
Sonal: It’s still limited because not all of our listeners are listening on Spotify.
Connie: Right, right.
Sonal: They’re on SoundCloud, they’re on iTunes.
Connie: Right.
Sonal: They’re in a bunch of different apps. And iTunes, by the way, also announced this — I think, what, last year? James Boggs announced that you can actually have drop-off…
Nick: Yeah. They rolled out more granular in-episode analytics.
Issues with monetization
Connie: Another thing I would push back on those — like, I don’t actually think advertisements are the only way you can monetize podcasts.
Sonal: Yes, I agree wholeheartedly.
Connie: I feel really, really strongly about that. Because even as someone who consumes podcasts, ads are extremely annoying to listen to. And this is where I look at other business models that are working in Asia for podcasts that I think could, very much, translate here.
Nick: Yeah. So a couple of points on that. And so, a situation which — there are behaviors in internet usage, in gaming, in media consumption — in China, Japan, and Korea — Australia, Malaysia, Singapore — that doesn’t occur here. Maybe through path dependency reasons, maybe through, sort of, technical habituation reasons. And, yes, so we’ve already seen, like, a really healthy growth of the number of podcasts using Patreon as — maybe not a primary, but a strong supplementary business model. “Chapo Trap House” is an example of this. There are a bunch of podcasts collectives that rely on Patreon for this. And there’s also, like, Slate Plus being a, sort of, a central model to Slate as a digital media publisher that also heavily indexes on podcasting.
But, you know, I think I’ve always found this “lack of data” conversation a little interesting, because whether or not advertisers feel confident in the measurement, and what the data is, sort of, trying to reflect in terms of reality, the world continues to spin, and, like, people do end up paying — like, converting as a promo code. And so there is a strong sense that podcasting is a very powerful driver of consumers. And it’s a powerful advertising driver <Oh, yeah!> even though we’re not able to tell specifically how many people that get hit in terms of just the analytics of it. And so, there’s this fear, I think, among a lot of people that, you know, the analytics side will end up driving way too much of the conversation — and ends up dictating the behavior of creators and publishers in a way that might end up being, you know, unhealthy or counter-intuitive to the relationship between the listener and the creator.
Connie: The problem with that, I think, is like — yes, analytics may skew what kinds of content they put out and how they engage with their audience. But, like, really, analytics is just a nicer way of saying revenue. Because at the end of the day, your analytics are a reflection of how many listeners you’re getting, right? And this is where I think, like…
Sonal: I don’t agree actually completely. I agree with you from a business perspective. But as a creator, the analytics tell me about community. And one of my favorite talks on the early days of resurgence of podcasting was — Marco Arment gave a talk. I was at XOXO in 2013. And it was basically about the resurgence of podcasting — the early signaling of that — and podcasts as a movement. Because what’s really unique for the first time, when you think about the first wave of podcasting with all the indie bloggers, we now have brands podcasting. And sometimes they’re not actually looking for direct revenue through that, it’s a way to really connect intimately with your audience. I mean, it’s essentially a movement brought live in audio form.
Connie: Okay, fair. So, I mean, there are types of content where it’s not about monetization. But for a lot of creators, I do think revenue is one kind of proxy for…
Sonal: Absolutely.
Connie: …how much value they’re providing their listeners. And I also think that, like, we’re in such, such baby phases of how podcasters should be able to monetize. Like, honestly, they shouldn’t be having to ask their listeners to go to other sites to pay them, like, a monthly fee.
Sonal: Oh, yeah. You can’t do it in-app.
Connie: I mean, this is where the platforms are going to start rolling out subscriptions. I think some are going to roll out, like, other ways of paying for packages or bundles of content. And I think that’s when you’re going to see creators really unleash, like, much better content, where they don’t have to focus on mainstream audiences. But they might focus on smaller audiences that are willing to pay for that.
Nick: So, actually, I’m like, really fascinated in terms of the concept. If analytics is being the, sort of, like, proxy for revenue here, it’s strange because I’ve always, sort of, viewed analytics as, you know, a certain kind of representation of reality. And it just so happens that advertisers, at this point in time, are really reliant on a certain expectation of a kind of analytics, in order to discern whether a media product is effective in a way that they want it to be. And there’s this larger conversation about platforms in general. You know, switching metrics, or tweaking metrics or, you know, in some cases, ballooning them in order to control and manage that narrative and relationship with the advertiser.
Connie: No, I completely agree, analytics matters for an advertising model. But what I’m saying is, like, the advertising model is actually not a good model to monetize podcasts.
Nick: No, that, we completely agree with. But it’s a situation in which, like, it is the revenue that a lot of people — a lot of publishers and creators feel most comfortable with because that’s all they know right now. And, we, kind of…
Sonal: I think it’s actually also a legacy. This is where I think we need to think, again, very native in a new medium. This is where we do ourselves a huge disservice. Like, the early days of the web when media outlets would put, like, a fricking, you know…
Nick: Banner ad. Yeah…
Sonal: …home page analog on their website. Right. Exactly. Like, we need to think very natively in this medium. And we have a huge opportunity for the first time because we have such an intimacy, a slipperiness, a connection with podcasting that’s visceral. That’s — I mean, personally, I think it’s unlike any other medium I’ve ever seen. I feel like I’ve found my voice on this medium quite honestly, but — so, I do think that we have an opportunity here, because we’re so stuck on the legacy of — and, in fact, this goes back to something we started with, which is what is the definition of a podcast?
So, I think that the thing to revisit here is that — the underlying pipes and infrastructure. And I know people don’t expect this when we’re talking about an episode about podcasts, but I think it’s really important because it informs this conversation. It is RSS feeds. It is literally an ecosystem of pipes that are connected by feeds, talking to feeds, talking to feeds. This is both a structural, huge limitation causing major fragmentation in the industry, major limitations on what’s possible, with what creators can do to even connect the dots — because the unit of analysis is limited to what you can actually send in a feed.
Connie: Right.
Sonal: And that has certain trade-offs to it. And this actually reminds me of container ships — like, physical, large shipping ships — like Maersk, etc., that you see in the ocean. And one of the novel things about container ships is about what they did to creating trade across the world. And because they’re multimodal — they go from airplane to ship, to truck, to yard — they allowed so much collaboration and connection around the world. That’s what feeds are doing for the podcast ecosystem. What’s missing, however, is — just like a container ship — containers are rectangular boxes that are very limited in what you can actually fit into them. And people, therefore, need to fit the shape of their goods to fit in those boxes. And the entire ecosystem for physical container ships is architected around being able to lift things out and in.
That is the same thing that’s happening in podcasting right now. The containers are connecting all of us in this feed ecosystem, but they’re also dictating what information travels where, and in what form. And I just want to point this out — no matter how wonky it seems — because that structure dictates so much of what the current batch of tools can and can’t do when it comes to analytics, the discovery, and more — all across the board. And it’s where platforms and tool builders have a huge opportunity to cleverly address, or even bypass, those containers once we get past this phase of where the podcasting industry is structurally right now.
Connie: Yeah. I just think, like, we are in such early, early, early innings of what podcasts can be.
Sonal: Yes.
Connie: Because if you think about it. Again, this is not using the technical definition of a podcast, but using this cultural definition of, like, audio recorded content, right? Most of the time you’re consuming that kind of content on an internet-enabled device. It’s not like you’re downloading it onto your computer and then, like, using a USB stick to transfer it to your phone, right?
Sonal: Mm-hmm.
Connie: And so therefore, like, we are not monetizing this stuff, or even creating features on top of it that are internet native. There’s just so much stuff we’re not even tapping into. And it’s such a shame, because we’re consuming these things on internet-enabled devices, and yet we’re using the same business model as televisions…
Sonal: Where you can’t even do anything.
Connie: …which is not meant to be interactive.
Sonal: Yeah.
Connie: And there’s, like, right now, very little interaction with the podcast which I think is such a shame.
Seasonality and bingeing
Sonal: So I want to ask you guys, kind of, lightning-round style on a couple of neat things that are artifacts of the existing world of content, and how we think they’re going to play out with podcasting. So let’s just — I’m gonna throw out a phrase…
Connie: And I think we should get your take too…
Sonal: I will.
Connie: …because you have more expertise on podcasts than anyone in this office.
Sonal: You’re right. I forget to do that as the host sometimes. Okay. So, I want to ask you guys about seasonality. Like, what do you guys think of this trend of people dropping podcast seasons?
Nick: So, I love seasonality. Like, it gives me a feeling of momentum. And also, we’re currently living in a moment where there’s all things happening all the time, so many things to consume — I would like things to have definite ends. And I’m a big fan of seasonality personally.
Sonal: Yeah.
Connie: I think it also makes it easier for bundling…
Nick: Yes.
Connie: …and different pricing down the line.
Sonal: Oh, fascinating. So for me, seasonality is — so, when I think of the long tail of content — and Chris Anderson wrote the fundamental piece and book on this — it’s this idea of an infinite shelf space. And to me, things being in software and being digital, it’s unbounded to the point of being pointlessly infinite. And forcing a false scarcity is my favorite thing that, like, box-in-a-month companies do — like Stitch Fix and makeup, whatever. It’s a way of curating and creating scarcity in a world of abundance. And I think that’s a really interesting packaging thing for any kind of content across the board. And especially for podcasting. Because there is no — you’re essentially in an infinite scroll in the audible world. You don’t know where you are, you have no context, you’re not plugged into a specific thing, because you’re living in this weird ecosystem of voice and show — or episode depending on how you’re listening. So that’s my quick take on seasonality.
Connie: Okay.
Nick: Love it.
Sonal: Okay. So binge-watching. This is related to seasonality. One of the most fascinating things about [the] Netflix phenomenon in the space of visual content is, they realized, like, “Wait a minute, we don’t have to do weekly things, we can drop everything at once. Not release it as a season that spreads out once a week or whatever the pace is, and allow binge-watching.”
Connie: I think binge-watching is great, and it’s natural human behavior for any kind of content. I suffer from it myself. Like, I was the kind of person — I would watch the series “24” — I would watch a season in, like, 30 hours.
Sonal: I did that too with “Stranger Things” and everything.
Connie: Yeah, yeah. And it’s just natural human behavior, and so I think it’s great.
Sonal: That we want to just be addicted and go deep all at once, and we can’t stop ourselves?
Connie: And, actually, in terms of — for the creator, I think it’s a good thing, because you don’t want that listener to, kind of, forget about it.
Sonal: Yep.
Nick: I binge-watch all the time so I’m just going to take, devil’s advocate, that I only, like, believe about 80% of. One is, I actually think that binge-watching or binge-shopping has actually caused attention to a given show to deteriorate, right? It used to be the case where, when a TV show drops weekly, there was, sort of, a positive conversation that is drawn out over a longer period of time if that show has hit. I thought about…
Sonal: You mean, like, the water-cooler conversation?
Nick: Absolutely. Like, “True Detective,” “Game of Thrones,” basically, everything that HBO — like that sort of structure of it, I really liked that water-cooler conversation. And I like to be on the same, sort of, page as other people when I’m having that conversation. And that’s something I’ve never gotten with a binge show. I loved the “Russian Doll.” I can’t find a single person to talk to about it who, you know, follows it around the same time. And like, I can guarantee, in about a month, I’m going to forget about that show.
To use a tortured metaphor, the thing about binge TV that I enjoy really doing, but I feel a little bit sick of doing it afterwards — it reminds me of, like, you know, that thing when, like, parents say that they’d do to certain kids where — if they catch that kid smoking one cigarette, they’d make that kid smoke the entire packet in one sitting?
Sonal: Oh, yeah.
Nick: That’s, kind of, how I feel after when I binge a season. I feel like I don’t want to watch TV for, like, a month.
Connie: But it’s, like, inevitable, you know? I feel like this is a behavior you can’t stop.
Sonal: So my whole thesis about this, which is similar to screen time and kids — because people always have these stupid religious debates over it — it’s not so much the act of doing it or not doing it, it’s why you do it. So, if you’re someone who is binge-watching because you’re depressed, that’s not good. But if you’re someone who is binge-watching because you just can’t stop watching the show, that’s great.
I will say, to push back on your point, Nick — because I know you’re taking the devil’s advocate — but I think that what you’re describing, this problem of the, like, water-cooler thing that, Connie, you’d labeled — it’s actually an artifact of technology not quite being there. Because there is a movement of second-screen technologies that are allowing more — there’s forums online, like Reddit, that aggregate.
To give you a perfect example of this. When I finished “The Three-Body Problem,” the first thing I did was go trawl the web to find all the forums and all the people talking about it, so I could find my people and talk about it, and find other people who loved it. And so there are tools that are emerging that allow conversations, to then, to your point — the water-cooler — to be aggregated asynchronously. And there will be, I think, a second-screen phenomenon happening with pod listening and binge-listening, as we start having the technology ecosystem grow.
Connie: I can see how, you know, you don’t want to spoil the ending. So you won’t actually go to that forum until you finish your book.
Sonal: You’re absolutely right. And, actually, I like that you can have a choice. Because in spoiler-alert culture, which Nick is slightly hinting that he misses, at least on the devil’s advocate mode…
Nick: I do.
Sonal: …there is sort of like a thing where you can actually choose to check out of things, luckily, so you’re not, like, stuck in a room with everyone talking. And then you are screwed, because you missed, like, the closing season of “Dallas” or whatever show it was.
The other point I want to make about binge-listening, in this context is — with binge-watching, new types of narratives are happening, I’m very curious about what will happen — as we start seeing binge-listening of podcast seasons, or podcast episodes — to narrative, and how that’s going to change that category of podcasts — where, would a “Serial” change the way it tells stories because people are bingeing it?
Connie: Well, then it becomes an audio book.
Sonal: Oh, interesting.
Connie: Right?
Sonal: Then it becomes an audio book. Oh my God, I would have argued it to almost the opposite item in the spectrum. Because it’s, sort of, going through a book very quickly.
But the flip side of it is — when I’m thinking the analog with binge-watching — is that you can watch an entire season and it changes the way — you don’t have to have a cliffhanger at the end of every episode. Whereas, even in a chapter, people still have a little bit of these things.
Connie: Oh, I see. I see.
Sonal: Right, narrative.
Connie: I will say, I think “Serial” would have made a lot more money if it allowed people to pay. I think, on the margin, binge-listening helps creators. Because if you can make someone pay for, like, a whole season at once, and maybe give them like one or two episodes for free, it’s better than hoping that they’re going to come back every week, right?
Nick: The “Serial” example is actually really, really interesting. “Serial” itself was an innovation of the form, because it stuck to what podcasting was able to do at that time. Prior to the existence of “Serial,” it was incredibly difficult to tell a serialized story over the radio in the form that they did it. And secondarily to that, they told that story in semi-real time. And that’s something that they, sort of, looked at the structure of what the distribution format was and they go, “We’ll go and try that out, we’ll see what happens.” And so this is a little bit of, like, them playing perfectly to the form there.
And I want to, sort of, go back a little bit to the point about, like, the second-screen experience and the, sort of, the death of the water-cooler. So, I love second-screen experiences. I live for NBA Twitter, I live for Bachelor Twitter. But I’ve got to say, I do like that experience with physical people, and that I miss hanging out and watching TV with my friends sometimes at the same pace. That’s all I got.
Connie: I just think, like, ever since DVR arrived, like, we kind of lost it already.
Sonal: I think you guys are both being very falsely nostalgic for a past that never was. Because I actually think — I mean, yes, there’s a reality to be physically present, but again, we’re in the early innings with all of this. We’re investors in a company called Bigscreen, where you can essentially share in this ambient intimacy — like, hang out in VR. Like, when there is a digital overlay over the physical world. Just like people connect on Twitter for ambient intimacy — the cocktail party of the web — there’ll be a physical, like, experience, that you have — similar level of satisfaction in hanging out in real time with your friends. And it’s just an artifact of technology that we’re not 100% there yet. That’s what I would argue, at least.
But back to the binge-watching thing. I was going to add that when a season drops all at once, I add it to my playlist, but I never watch it. Because what’s also missing in this space — and this is, again, why I love the idea of binge-watching/listening for podcasting — is the concept of virality. Viral hits don’t happen instantly unless you’re, like, a Joe Rogan Experience, an Elon Musk smoking pot on air.
Connie: Yeah.
Sonal: Like, it’s, sort of — or a cult of personality show. It’s slow-burn type of virality. And so seeing what people are talking about and what resonates is hugely important for creators. Not because you freaking want to crowdsource what you want to say, but you do want to know it doesn’t go in a black hole.
The need for better analytics
Connie: I would love a world where, in the future, you’ll know which parts of the podcast the audience…
Sonal: Resonated.
Connie: …liked the most.
Sonal: Right. My proxy for that, by the way, is — I do Twitter searches all the time for the commentary, so it’s a very skewed sample, but it’s helpful and I push the editors to do this — to close this loop, even, if they’re not active on Twitter, because there is no other way to see what resonated. And as soon…
Connie: But can’t…
Sonal: Yeah.
Connie: But can’t you see, like, a platform just like saying, “Tap your screen if you like this part?”
Sonal: Oh, totally. Well, I don’t know if this is public. Do you know this, Nick? But <redacted> is doing screenshot — audio shots of podcasting?
Nick: Yeah, I’ve heard about this. Yeah.
Sonal: Yeah. Is it public, do you know?
Nick: Not yet.
Sonal: Okay. But there will be podcasts screenshotting, and audio clips. I’m curious to see, with or without the transcript, Connie — to your point, about the importance of that — whether those will go viral.
Connie: It’s crazy to me that these things don’t have automatic transcription on the top hits. Like, that’s such an easy technical thing to do. And for a listener, that would mean that I don’t have to just pause and say like, “Oh, yes. Remember, like, go back to the 1 minute 30 seconds mark later on and take notes.”
Sonal: Well, I actually love that, too, because one of the biggest limitations of podcasting is the lack of a “screenshot equivalent.”
Connie: But that exists in China already. Not only can I see the transcript, I can then comment on it. And I can make it so only my friends can see it, or I can make it so the entire public can see it. And then there’s a discourse…
Sonal: That’s amazing. Right now, we have to manually upload transcripts.
Connie: And you basically have threaded conversations around parts of your podcasts. And so it’s okay if the listener doesn’t even get to the end, because you can have a highlights feed — all kinds of stuff right now that we just are not doing. And so I think this is, like, where the platforms can get much better at creating. Like, even if they, like, just chunked up the best clips, right? Or maybe you, as the creator — you can, like, throw out which clips you think are the best. Make it easy for them to repost on other social mediums, or make as, like, background music to whatever. And I think…
Sonal: Yeah. You can do that, actually, now on some of these tools. But to your point, it’s fragmented, it’s not centralized on a single user experience.
Connie: Fragmented. And I think, like, the main platforms don’t allow that, right?
Sonal: Mm-hmm.
Connie: And so…
Sonal: Currently, no. Spotify, and iTunes, and others don’t. In fact, this is, again, where the ecosystem is so fragmented, because the side players — there’s a whole budding ecosystem of tools that are doing this kind of thing.
Connie: So, again, it goes back to — you know, like likes, and comments, and payments, and tips — that’s just like a form of showing how much you like something. Creators don’t know which pieces of their podcast were the best parts of the episode. They don’t know where the highlights are.
Sonal: They don’t know any of it. It’s a black hole. But on the metrics, I do want to say that one of my favorite analytics for podcast success — because I do think that we need to think about what you’re measuring for, for the type of show you are — and in our case, what I care about as editor for the show is insights per minute. And this is the same thing…
Connie: Cool.
Sonal: …as insights per inch, in terms of like going down a verbal post.
Connie: Yeah.
Sonal: Because when you have a brand collective and not a cult-of-personality driven show — this is, again, where the metrics for the type of show need to vary as well, in my view. For our kind of show, if you’re not, like, a famous personality, then the insights per minute matter a lot to get people to stick and stay. And then secondly, when you think of audience discovery — audience and movements of people and fans aggregating around a piece of content — then I care about — if a show has, say, a drop-off halfway, as a drop-off point, if the first half are people who are mainstream interested in learning about quantum computing, and then they drop off 50%, I consider that a huge metric of success. And if the remaining 50% that stick around — a much smaller subset of people who are developers in quantum computing, are interested in building quantum computing, are physicists — then that’s a huge metric of success. So for me, again, this is, again, another granular way of thinking about the type of show, the type of content, etc.
Now we can’t do any of this right now. But as we introduce new storytelling and forms in podcasting, I think we’ll be thinking a lot more differently than the obvious on those fronts, too, and about podcast engagement. Which, by the way, one quick factoid for you guys — the number one thing I hear from all of the publisher network. Because one of the things that I did when I came here was reach out to various people to beg them to put their authors on the podcast — this was before authors became — like, going on podcasts became the thing to do.
Connie: Yeah.
Sonal: And there’s nothing that moves books the way podcasts do. I’ve heard this over, and over, and over again from all of my publishing industry friends.
Nick: I heard the exact same thing. The way that the podcast experience is currently constructed, it drives sales. But the question is — is that when other platforms — or when the experience changes due to technical innovations or new features added, would it fundamentally change that relationship? Will there be the same kind of sales push that we experience right now? It’s an open question.
Sonal: I do think it’s an open question.
Connie: I think it could totally work. I mean, like, to me it’s like the same way QVC is a great way to sell stuff, like, podcasts is a great way to sell content — written content that people want to read. But I think this is a bigger problem with the book publishing industry, meaning that they’re not selling books in an internet native way.
Sonal: Right.
Connie: There’s no great way to figure out the highlights of a book, there’s no way for me to read the first chapter for free, there’s no way for me to, like, get a sense of, “Do I want to pay for this entire book?”
Nick: I do that all at a bookstore by just skimming them. I mean, like, it’s… <laughter>
Connie: In a physical bookstore, yes. In a physical bookstore, you can do all these things, but on Amazon, you still can’t.
Sonal: Right. This is another way where I think we’re not thinking of the native medium. Because, it’s crazy to me that books, which are self-contained, with no context, are still decoupled in audio book form. And it’s equally crazy to me, that podcasting, because of the structural limitation of the feed pipes, don’t actually have context built into them where you can actually tie a podcast into the context of a broader show, more by this author, more on the topic — to your point about PDFs, and show notes, and related materials. It’s crazy to me that there isn’t a web-linked ecosystem for podcasting yet.
Connie: Because none of this stuff is being sold in an internet native way. I just think, like, that right now, the way we sell books, it’s like — if you had no movie trailer and you only had the movie poster.
Sonal: Yeah. <laughter>
Connie: Right? Like…
Sonal: Yeah.
Nick: It depends on the movie poster.
Connie: You’re, like, buying the book based off the cover and maybe some quotes by people who’ve read it, but you don’t get to even see the trailer. And this totally actually skews the creator’s incentive for what kind of content to create. So, like, for a book, like — are you going to pay $20 for like a 20-page book? Or will you feel better about paying $20 for like a 170-page book? And then authors might have to write extra words for the sake of selling a, you know…
Sonal: Oh, that reminds me of [the] early days of Charles Dickens where he was paid by the word, and that was, like, a funny artifact of the way the monetization was happening. But I would argue on the flip side of that, on the creator side, I think it’s more important to find your community. Because the beautiful thing about — again, podcasts are movements. Groups of people following either a show, or an episode, or a topic, “Serial” fans, whatever it is. And so, when you have “1,000 true fans,” in the Kevin Kelly phrase, that are following a particular book author, or a particular topic, or a particular podcast — in our case, what we’re doing is, we’re mobilizing the fan base. Not because of that author, but because of the way that we do our take with that author. Like it’s, sort of, the CFI take on it. So when we did Yuval Harari, it was me and Kyle talking to him about all kinds of random stuff that was probably not even related to his book.
Connie: Right.
Sonal: The point is that it’s a way to mobilize your movement, your fan base. And this goes to Nick’s earlier point about Patreon and fan bases, or Marco Arment’s point about brand as intimate connection.
Nick: So, my theory on this, sort of, notion of, like, what people would pay for — people will pay as much for a thing based on how valuable they think the thing is. And so, it’s equally plausible that a person looks at a 20-page book and thinks that it’s worth $20, as it is that a person looks at a 170-page book and thinks that they will pay $20 for that. It really depends on how that person — or how it’s messaged to this consumer, what value it is, right?
Sonal: Yeah.
Nick: And so this ties back a little bit to the notion of advertisers and analytics. Analytics, as constructed by a technology company, by a platform, by a data team — is an effort to tell the advertisers, “This is how valuable you should think this is.” And in the art world, value is constructed in a whole different amorphous way.
Sonal: Yes.
Nick: And so I think it’s, like, a one-to-one objectivity of — what is the right metric, or how do we find the truth of the value of a certain thing? These are socially constructed things. And so I think that should be a consideration when it comes to when we think about — even the book publishing industry. I guess, we should argue that celebrity books should be priced a lot higher than it is. But, you know, that’s just me.
Connie: Books is just one example, though. Like, if you think about, like, a YouTube video. Like, the creator is incented to make it long enough so you don’t purchase one pre-roll ad, but also put, like, another ad in the middle. Which means the video has to be long enough to have enough gap time between the ads, right?
Sonal: Not really, because the most popular videos on YouTube that do really well are the short, quick takes, or tutorials. Or, like, in those cases, that’s another example of — I mean, I think that’s the reason why tutorial culture has taken off because people are self-selected into, like, learning about X, Y, or Z.
Connie: But, like, some creators will lengthen their videos so they can put in a second ad.
Sonal: Yeah. I think those, to me, are the more old school creators that are doing that to monetize in that way. They’re not the ones who are the influencer creators, because the influencer creators have their eye on a much bigger ball game. They’re looking at moving their own freaking makeup lines, or like — you know what I mean?
Connie: Yeah, yeah.
Sonal: Or, like, other things. But, yes, that is sort of like the early phase of every platform and medium — is that you have a quick way to, kind of, game it to get what you need. But I don’t know if that works for the long-lasting players.
Nick: YouTube in that situation is the arbiter of the data that tells advertisers what to value. But it’s also the arbiter of the data that tells creators how to value the way that they’re creating something. It also becomes a situation where YouTube is the thing that interprets human behavior, and makes assumptions based on those interpretations through what people are valuing. And so this is, like, YouTube, sort of, defining that reality and pulling levers in a bunch of different ways. And they may be correct, they may not be correct. In any case, it’s all a proxy of reality that may or may not be aligned. We don’t know necessarily.
Sonal: I agree. I agree it’s socially constructed and value is created. And a lot of it is limited by the tools people have for thinking about pricing. And they have heuristics for doing that based on those structures. I would also say that there’s a really interesting opportunity, especially with podcasts, to flip the model — where fans get paid. And in fact, Kevin Kelly made this really interesting argument in his book “Inevitable” about how, when you swap your paradigm for thinking about attention in an abundant software world, which is what we’re talking about here, abundant digital world bits are infinite…
Connie: Yep.
Sonal: …there’s no limit on airwaves in this context, you can actually flip the model where fans can monetize their attention. So you actually reorient. And this is actually the premise of crypto, right? Or one of the premises of crypto. At least in the notion of crypto networks, where right now, the locus of data controls the platforms. With crypto, you can actually invert that, where the user is the container of the data. So if you think about this in the context of media creation and podcasting, how interesting to think about a fan monetizing their attention? Because if a fan is a sum of all the shows they watch, maybe an advertiser wants to buy that fan and the fan directly monetizes that attention. I know that sounds crazy, but I don’t think that’s impossible in a world like this. You guys are both looking at me like I’m nuts.
Connie: I think if platforms can do that, like, there’s all the stuff they need to experiment with before they even can get to something like that.
Sonal: Yeah, yeah. That is if you believe it has to go step wise. Because sometimes, technologies can leap. I agree with you, I think it will be incremental.
Connie: I’m like, “If we can’t even get subscriptions or tips of, like…”
Small bites of content
Sonal: We can’t even get downloads, for fuck’s sake. All right, I’m going to do another quick — I want to hear you quick lightning round take on interstitials and podcasting. Any thoughts on that? The idea of, like, you know, title slides, or breaks, or segmentation, etc.
Nick: I’m pro interstitials. It’s like, you know, it’s really important to orient your audience and to teach them how to listen to the thing. It’s an important creative tool. That’s my view on that.
Sonal: Connie, I feel like you have a lot of thoughts on this because it feels so China native, like, what people do and…
Connie: Describe more what you mean by interstitial.
Sonal: I mean, more, just like, it’s kind of to your point about there being granularity. Like, you can actually break up a show into sub-parts by having little breaks or…
Connie: Oh, yeah, yeah, yeah. I think interstitials [are] great. Because, again, it allows me to show you which parts of your episode I value the most and which ones I’m willing to pay for.
Sonal: Yeah, for me, I will say that we tried some early experiments with segmentation. Because I got this funny feedback from people that they’re like, “I listened to the podcast on the road, and my commute is 10 minutes. I wish they were 10 minutes long.” And then someone else is like, “My commute is 20 minutes. I wish they were 20 minutes long.” And then someone else is like, “My commute is 30 minutes,” or 40 minutes. And they have this ideal time.
For us, at least, 30 minutes has been the sweet spot in terms of, like, the ideal podcast size. But I don’t think there’s a rule of thumb. Like, some of our most popular episodes are an hour and also 20 minutes, so I don’t know. But I did, because of that — I wanted kids on campuses, like, at Stanford or wherever, to have a way of listening to an episode and, kind of, have like a nice natural stop off point. Because when you’re watching a show, the ability to, kind of, pause — so to me, interstitials are a way of creating a little bit of those moments and breaks. But then what I realized is that as an artifact of this industry, all the tools save your spot in where you were playing last in your player.
Connie: Yeah.
Sonal: And so it, kind of, became a moot point. So that experiment didn’t really work. But the driver for it is this thesis that — and, you know, Dixon says, the internet is made for snacking?
Connie: Yeah.
Sonal: And podcasts can be beautifully long-form. But I also think that there’s a consumption mode and very short, micro waiting moments, to use a term from a Park paper on this concept — that when you’re waiting in line, can you listen to a quick bite of content? Not just watch something on your thing, not just listen to it.
Connie: Super interesting.
Sonal: Yeah.
Connie: Yeah.
Sonal: And I wonder if we can fill micro waiting moments. And so I wonder if interstitials would play an interesting role as, like, a micro waiting moment.
Connie: To do that, I feel like you need really good discovery.
Sonal: Oh, yeah. Or following a show, right?
Connie: Because the likelihood of me, like, hitting something that I don’t like causes, like, this fear in the listener.
Sonal: Of course. Unless you are then — which currently is a model — of following a show or a personality.
Connie: Yeah, you just have to have so much trust…
Sonal: Yes, yes.
Connie: …that it’s going to spin up the right thing.
Sonal: Yes. Because, right, because in the cult-of-personality model, people are following the person, not necessarily the guests.
Nick: I’ll just say that the notion of short-form audio is one that is constantly talked about. This also, just as another reminder, like, what Anchor essentially attempted to do at the very beginning of their journey, and what Odeo tried to do. And it’s one of those things where it didn’t — both of those iterations didn’t quite work.
Sonal: No.
Nick: We don’t know if that has anything to do with what people want, or if it’s the case that people were not ready for that yet.
Sonal: I would argue the last one, because we have seen over and over with technology, there was, like, five Facebooks before there was a Facebook that works.
Nick: I subscribe to the view of the world in which human beings are generally plastic, and so you could force a human being to accept just about anything. And so, it’s a question of whether the right startup — or the right platform — executes the right experiment, or the right time, with the right group of people. That’s just, kind of, how these things work.
Sonal: Yeah. Human beings are creators of emergent behaviors, because this is where you can never predict the second order effects of new mediums, right?
Connie: Yeah.
Sonal: Like, Twitter spawned all kinds of interesting emergent behaviors. And that is the fundamental truth of the evolution of all kinds of technologies.
Connie: But it’s all technically — I mean, this is not like cutting-edge science or technology that doesn’t exist yet. It’s just the platform hasn’t put all of these things in place.
Sonal: Yeah.
Nick: But the fact of the matter is, is that stuff like social audio, stuff like Anchor’s initial bid to be the Twitter of audio — this stuff like Odeo, which is what Twitter was before Twitter became Twitter, which is essentially…
Sonal: Oh, right.
Nick: …Twitter for audio — is that we need proof that the consumer side will lead the way that it will stick with them. So…
Connie: But I think that’s the problem, right? If we’re waiting to have, like, survey data to see if this works, then no platform is going to experiment on it. And this is why, like, new startups and new platforms need to experiment with how to engage with podcasts. I think it’s, like, a given that everyone would prefer to have no ads in their podcasts. And that’s why it’s up to all the platforms to figure out how to create the tools so creators can still make money, and make better money than I think what they’re making now. I actually think creators are vastly underpaid in podcasts. And it’s up to the platforms to figure out how to help them monetize so we can get ads out of the podcast itself.
Nick: I don’t think we’re disagreeing. I think we’re, sort of, like, coming at it from opposite directions here. Because my number one principle when I’m thinking through these things is that no matter what happens in terms of feature development, no matter what happens in terms of whether certain platforms or tools ends up innovating on these fronts — is whether creators themselves end up controlling their destinies in this situation, whether they control the means of distribution.
Like, the entire wave — the entire learnings of what happened with YouTube and YouTube creators — really harms a lot of the people that I speak to when I report week in, week out. Does the nature of the platform being capricious and altering the way that they expect their certain revenue projections over time? And so, I’m personally all for the ability to create better tipping structures, to streamline Patreon and direct revenue, sort of, pathways straight into the listening point. But the fact of the matter is, like, all of these pieces connecting the listener to the creator are all going to be controlled by other people. And I think this is the nature of things that brings the most anxiety to the creator class right now. And, of course, the creator class would change over time with changing expectations of how these things will work.
Sonal: Connie, I’m hearing you say that there’s huge experimentation that’s already happening in China that we’re not even remotely seeing here?
Connie: Mm-hmm.
Sonal: That is also a case, however, where we have platforms, because to the point of tipping, as an example, Nick also mentioned Patreon as a good thing but, you know, clearly, one of the big structural limitations in the U.S. is that people don’t obviously always have their credit cards linked in the way that you have in WeChat, or that we’ve talked a lot about on the podcast.
Connie: Or like Apple Pay, right? Or, like, in-app payments.
Sonal: Right.
Connie: Like, people, oftentimes, will say, like, “Oh, our payment infrastructure is why none of this stuff would work in the U.S.”
Sonal: But you’re saying that’s not true?
Connie: And I don’t agree with that.
Sonal: You’re saying that’s a cop out. Okay, that’s fair. So, then, maybe tipping needs to be done at a more micro level?
Connie: It’s not even just the money — it’s also helping creators see who their real fans are.
Sonal: You want the 1,000 true fans.
Connie: And right now it’s, like, a one-way conversation. Like, why can’t the platforms that allow you to listen to podcasts also allow me to record a quick message back to you? And then also, like, use algorithms to figure out which comments are valuable or not.
Sonal: Yeah, I think we agree in that sense. Like, platforms should basically do more for their users and experiment. I also agree with Nick, though, on the point that he’s raising. I don’t like the assumption going right to platforms as the default owners of this, and the default aggregators of this. And this, kind of, goes to Ben Thompson, who writes about aggregation theory a lot — which is just a fancy name for network effects in a lot of ways. I mean, he’s much more nuanced. But it is, at the end of the day, the tension between centralization and between bundling and unbundling, and these cycles that constantly go back and forth in waves.
Competition and centralization
Connie: Especially with the YouTube platform, like, you look at how the influencers who started YouTube channels 10 years ago, they have massive followings now. They’ve continued…
Sonal: Yeah. And they’re dependent on YouTube, which is Nick’s point.
Connie: Yes. But also it makes it really hard for a newcomer to come in and create a YouTube channel and get to that 1 million subscriber count, right? And in the similar way, like, even now I hear about so many friends even starting podcasts.
Sonal: Oh, yeah. And it’s very competitive. Like there are people who barely get to 10,000 listens per episode and that’s insane. Like…
Connie: And it’s gonna get more competitive, right?
Sonal: Yes, very crowded.
Connie: And so that’s why I think all these new platforms are, kind of, interesting because as they try and pick off creators to have them exclusive to their platform, this dynamic may change. But it’s really interesting. Because, like, for video, it was like winner-take-all.
Sonal: Which is not true in podcasting. So I’m curious then for your guys’ take, because back to the point of centralization — is to give people a better user experience, and choice, and variety, and ease of use. What do we think about the moves of Spotify and Apple in this space, especially given Spotify’s news a few weeks ago of acquiring Gimlet?
Nick: So, I think the necessary background here is that for the longest time, Apple has been a primary distributor of podcasting. It used to be somewhere upwards of, like, 80%. We believe it’s now somewhere between, like, 60% to 75% maybe. But with today’s Infinite Dial, so, studies — it suggests that Spotify has grown their particular share. But we’re nowhere seeing like 50/50 parity or something. We’re just not seeing that just yet.
And so Spotify — the business case for Spotify going into podcasting, or spoken audio writ large, is pulling their business model away from being completely tethered to the dynamics of the music industry. Which is to say, a music industry that’s been very costly for them to play in. And it’s been very costly for a lot of music platforms to try to come in and take over, essentially, distribution power from the music labels. And so, Spotify looked into the situation and [goes], “We see a category of content here that is significantly cheaper, that is still unwieldy, and it’s still untamed. And we can try to figure out our place in that world and, sort of, push us off the narrative of just being a music company and giving ourselves other avenues of growth.”
Connie: And that impacts, like, the company’s branding and positioning, right? It’s no longer seen as just a music company, but, like, an audio destination for all kinds of audio?
Nick: Absolutely.
Connie: And in that same way, that, like, Spotify was also known for helping you discover stuff you’ll like, I think this is also a reflection they’re realizing, like — podcasting has gotten so large in terms of how many new creators are jumping in.
Sonal: Can you guys address the exclusive shows angle?
Connie: I actually see both models working really well. I think if you have a platform where anyone can submit a podcast, that can be great. You can have long-tail creators. But I also think a podcast that says, “Hey, I’m going to curate the top 200, 300 podcasts,” can also work really well, too. Both have great monetization potential if they want to be niche or just long tail.
Nick: Yeah. And so, I mean, we have a couple of situations that’s pretty interesting right now. So there’s been a paid podcasting attempt for quite some time called Stitcher Premium. It’s a, sort of, exclusive layer on top of a fairly popular third-party podcast app called Stitcher, which is part of Midroll. And earlier this week, we saw the formal announcement of a company called Luminary that’s attempting to be — they literally use the tagline, sort of, “Netflix for podcasts,” which is going to be difficult because the primary challenge there is that they’re trying to build a catalog of things that, you could argue, has free alternatives almost everywhere else. And I have made this argument a couple of times before, and I don’t think it stuck yet but, like — I think we should be looking at Headspace as a really interesting, like, comp here.
Sonal: What do you mean by that?
Nick: So, Headspace, essentially, is an on-demand audio app that performs a very specific function that provides a very specific genre of on-demand audio content. It fits into one’s life in a very, very specific way. You know exactly why you’re paying for it. And you can’t find quality alternatives elsewhere off that platform, generally speaking. And so we’re in a situation where there is some lane here to build a paid podcasting platform. The question is, like, will there be a really, really big one, or will it be a series of smaller ones that ends up being bundled over the long run? And I think we are at the very beginning of being able to answer that question.
Sonal: Yeah, I agree. I would also say, for people in the know in terms of the history of podcasting, in the recent — past five years, I think I’ve seen versions of Netflix for podcasts. And one of them, I remember —I don’t even know if you remember this, Nick, is 60db?
Nick: I do. Acquired by Google.
Sonal: Right, they got acquired by Google, and I don’t know what Google is doing inside.
Connie: But the problem is, like, it’s still a subscription, right?
Sonal: Why is that a problem? I would love a subscription service.
Connie: But I think I would rather pay for a specific podcast.
Sonal: Oh my God, yes. So my number one complaint — so, everyone at CFI has heard my whole thesis on this a million times. Which is, first of all — podcasting is such a homogenous word. We’ve defined it technically, and in user experience. But when I think of the content side of podcasting, I like to split it into a simple taxonomy of three types of shows. There are personality based — what I call cult-of-personality based shows. You know, like “The Ezra Klein Show,” “The Tim Ferriss Show.”
Connie: Sure.
Sonal: And my God, by the way, most of them are named after male names. Let’s just not go off on that one. Then the next category besides cult-of-personality shows is what I call, like, more collectives — or like brands, or voices of groups of people, which is what I would consider the “CFI dcast.”
Connie: Yeah.
Sonal: And then the third show is a much more produced, serialized, like, “Serial” or a narrative type of podcasting show. That’s a very loose, broad taxonomy. But if you think of these three categories, discovery for each of them — it is so frustrating to me. Again, going back to this containerization model — that discovery is limited at a show level. Again, structurally, it’s terrible. I keep bringing up structure because while everyone is so caught up in talking about discovery and monetization, they’re missing the big opportunity here, the bigger thing — which is defining a new unit of analysis of episodes versus shows. And possibly even more granular units within that. I hate that we’re still stuck in the legacy ways of thinking about this, when we can bypass things with software. We don’t have to have the CD stage first to get to the individual song stage.
Then I also talk to analytics people all the time about how feeds limit what tools outside the big platforms can do — like not being able to tag podcasts by topic. Because I believe we all need the ability to find episodes, not entire shows. [If] I like birds and birdwatching, I should be able to find any episodes on those topics regardless of show. Connie, you like real estate and crafts, you should be able to fucking find those topics and discover every single episode on those.
Connie: But see, this is where transcription, and tagging, and, like, just a much smarter internet native way of displaying podcasts makes all of that, like, automatic. There is no technical reason why we cannot automatically transcribe all the top podcasts. And again, like, I think subscription for, like, an entire platform doesn’t necessarily make sense for podcasts. Like, maybe it’s a good starting point.
Sonal: It makes sense if you have a collection of shows you like.
Connie: It’s a decent starting point. But, hey, maybe you’re a podcaster and you’re only going to create, like, a couple episodes, but it’s really, really good content. Right, like why can’t you let people pay for that? And, again, I think it’s not just about the money that’s getting transferred. The problem right now is, like — there are certain podcasts that I would happily pay for and a bunch that I would not pay for.
Sonal: Yeah, exactly.
Connie: And right now these platforms don’t give you that option, to say, “Hey, these are the ones that I ascribe more value to.” Much less even just say, “I liked this one, or comment, or anything.
Sonal: I mean, right. Well, you’re also alluding at, when you talk about the transcription of shows, though, is like — and this is obviously another key point of discovery — is it goes, again, parallel to the web. There was a curated links phase that preceded the portal phase, that preceded the search phase.
Nick: Just give it a couple of months because Google is working on that. And they are beginning to beta test all of that in terms of transcriptions, in terms of whether a podcast shows — or audio, writ large — shows up in the search engines.
Connie: But they’re not even going to have all the podcasts, right? The exclusive podcasts on Luminary, Google is not going to have.
Nick: Well, then that’s Luminary’s problem at the end of the day, right? Like, I think Google’s situation is, is that they’re going to pull in the RSS feeds, or they’re going to pull in podcasts that exist on the open, sort of, ecosystem. And they’re going to transcribe it and they’re going to index it within the search engine.
Connie: I guess what I’m saying — like, rather than rely on Google as the search engine to do it, at least very basic transcription and search, all the platforms should be able to do it themselves. And like, imagine all the other stuff you’d like to tack onto it. Like, hey, maybe in addition to the podcast on podcasts today, you have, like, five links that the listener can go in and click on…
Sonal: Click while you’re playing.
Connie: Yeah.
Sonal: I would love the ability to embed a link natively, instead of in the show notes.
Connie: Or a PDF that you can then charge more money for.
Sonal: Right.
Connie: Like, hey, to read more.
Sonal: Right, right.
Connie: Or maybe, like, all the, like, parts that you cut out.
Sonal: Yeah, yeah.
Connie: Like those special clips, maybe someone pays, like, a dollar to un-tap it, right?
Nick: I agree, I would love to pay for stuff that I want. But, I mean, look, I’m just a normal person that has, like, normal finances. I don’t think I’m going to spend more than X amount of money per month on entertainment goods.
Connie: I agree that people aren’t going to spend, like, tons and tons of money on podcasts. But I think the better creators would get more rewarded for their content, which means new creators that don’t have, you know, crazy followings to begin with can still get paid.
Nick: No, I agree. But the question is like, I’ve heard the line of argument that it’s really hard to become a Patreon supporter, or to find a way to give money to a creator that you really support. And I do wonder — the nature of that assumption. There’s only so much frictionless — so much attacking of the friction that we can introduce to that layer — that we find what the most efficient point of, you know, listeners supporting creators ends up becoming.
Connie: Okay. But that is assuming that I want to support that specific creator. Maybe I only wanted to for that specific episode.
Sonal: Yes.
Connie: Maybe I don’t actually want to give the tip to Sonal, but I want to give it to Connie and Nick, right?
Sonal: That’s fucked up, but okay.
Connie: I mean, like, no seriously. Like the way that we are thinking about paying, it’s not necessarily the same person who’s speaking even on every podcast. And the fact that we aren’t able to more directly indicate and tie our money to the products that we truly, truly value — I just think that’s [a] really lost opportunity.
Nick: Well, so, let me push back on that a little bit, right? So the assumption here is that the show is — this show is made up of you, me — and, let’s say, a producer, and let’s say, you know, a couple of people behind the scenes. But I think the reality is that most of the production structures constitute a lot more people than the listener can ordinarily see. So who a listener is moved to tip doesn’t necessarily translate to who is actually creating the content, because there’s an entire, sort of, conversation over here in terms of like how listeners value the creators, how they, sort of, make assumptions about what they want to support, how they want support, why they want to support. There are a lot of gaps of information there to give all that power to the listeners, I think. There still should be some middle point there, in terms of how support works.
Connie: I’m not saying it can’t go to a show. But a show is — even then, supporting a show is different than supporting a person.
Sonal: I’m hearing both of you guys. I also hear that there is a lot more granularity you can do because we have an infinite web. And the fact that we define things as containers of a feed, or a podcast, or a show, or an episode — these are all things we can redefine in this new era. And I agree it’s very early innings. I also agree so wholeheartedly that a thriving content ecosystem has to support its creators. And I know you’re arguing for that, too, because you’re arguing in this framework that people have more comments, [that] they have more ability to interact with their top fans. You’re saying the same thing from a different angle. But from a pure business perspective, in terms of being able to run a business that is based on podcasting, there does need to be a middle layer where creators can get the value they need.
And for me, the open question, quite honestly, is whether the assumption or thesis that happened with blogging — and this is actually the initial premise of Anchor, as well, which Spotify also acquired — is whether there will be now a new wave of mobile podcast creators who don’t have tools. And again, with tools like Descript, which democratize editing, with tools…
Connie: Right.
Sonal: …like, just being able to record a podcast in your phone, without having to have, like, a fancy Zoom recorder or mics. Like, that is an open question to me. And I don’t know if people are really going to listen to that, because we have this discovery problem in the ecosystem. And yet there are a few centralized choke points that are coming up now — particularly iTunes, Spotify, Pandora, etc. By the way, on this notion of growing the podcast ecosystem and the total addressable market size, what do you guys make of radio here? Because that has its own set of structural, and policy, and regulatory considerations. I’m curious for your guys’ take on that aspect of it.
Radio and fragmentation
Connie: Well, I think the market size for podcasts is, you know, multiples larger than what it is today. And I do think it’s tapping into radio, but it’s also tapping into other things that do really well in the audio format. So, like, audio books that are self-published for example — things that are related to the knowledge-sharing market for adult learning…
Sonal: Oh, interesting.
Connie: …I think can really, really work well for audio formats. There’s a lot of stuff where I don’t need to watch someone talking on YouTube with, like, a whiteboard, because, usually, they don’t even really need the whiteboard, honestly.
Sonal: Yeah. Although, there is a funny argument to be made which is that people also listen to audio [on] YouTube. And, in fact, Chris Anderson was telling me his son watches entire movies on YouTube in audio mode only, which I think is fricking fascinating.
Nick: I also just listen to movies on YouTube all the time.
Connie: I mean, yes, YouTube also works for audio. But, I mean just imagine topics around business, topics around finance, topics around parenting — even, like, meditation and how to, like, improve your life — all of that stuff works really well in the audio format and doesn’t necessarily always require video. So, anyways, those kinds of podcasts, at least today, are not the mainstream podcast, right? Because today mainstream podcasts are, again, around shows versus individual pieces. Instead of being, like, you know, a TV show, why can’t you be, like, a movie? And it’s, like, this one-time thing that goes really deep, which is really valuable content? And I think if you take that kind of definition for a podcast, it is so massive.
Nick: So, let’s begin [with] the whole notion of terrestrial radio, right? Like, it is an industry completely, utterly defined by the nature of the distribution points. It is antennas going out. It hits you in the car, it hits you in the radio. And it commands billions and billions of dollars. My interpretation of that industry and its sort of strange persistence has a lot to do with advertiser relationships. It is still the medium that has the most easy reach for — and that hits the most Americans, and has the most, like, history behind it. And so if you’re an advertiser, you feel significantly more comfortable, because that is your default industry to buy into. And I feel like that feeling of safety and confidence is something that should not be understated. And it’s something that all digital media, sort of, sectors — including podcasting and beyond it — should, sort of, be cognizant of, like, that’s one of the primary things driving that situation.
Connie: And I think another reason why ads work so well on radio — and it works well on podcasts too sometimes — is it comes in the voice of the creator, versus the voice of the brand or like some other random voice, right?
Nick: One hundred percent, yeah. The, sort of, buzzword that podcast industry executives use all the time is intimacy, right? And that’s why we, sort of, hear the host-read ad being the pinnacle of the podcasts’ advertising experience. And it’s also its most valuable, like, ad slot, ad type. And so, you know, that’s why like a lot of the genres that you pointed out when you sought to build the taxonomy of a podcast — it’s very personality driven, it’s very people driven. That’s why there’s a little bit of trickiness when we talk about something like fiction podcasts, or non-narrative podcasts, and how you monetize that, how you build that relationship.
Sonal: Yep, I agree. It’s, very much, native to the content of the storytelling and the medium in that context.
Nick: Absolutely. And at some point, we will see innovations in business models, innovation in distribution, in the structure. In the sort of, like, you know, container of it that will alter the advertising assumptions here, or the monetization assumptions here. But I still want to go back to — to tie it back to the very first thing we talked about. The definition of it, what we think about it, how we think about it — our assumptions of it being personality driven, or show driven, or episode driven — it needs to fragment at some point. It, kind of, needs to break up because it needs to be a universe that can hold a bunch of different kinds of experiences. In the same way that when we think about television, we’re not just talking about “Breaking Bad,” we’re talking about “Wheel of Fortune.” We’re talking about, like, so many different kinds of styles…
Sonal: We’re talking about, like, “American Idol,” which is such an important movement around the world when you think of the future of content and TikTok and challenge-based things.
Connie: That’s why you need polling, right?
Sonal: Right. But the point is that there is a whole — that was a huge — reality TV, like…
Connie: Or things around holidays…
Sonal: Right.
Connie: …or like the Super Bowl…
Sonal: Right, special events.
Connie: …like once-a-year type events.
Sonal: Right.
Connie: Like, this is, again, like, we have to break away from show culture.
Sonal: Exactly. I agree. And to your point just on the terminology thing, Nick, I would say — the word “fragmented,” we use that in the context of industry fragmentation. To me, it’s more, how to make a homogenous term more heterogeneous and have more diversity embodied within it.
Nick: Yeah. And so I think the question here is sort of like, do we think about the spread as — on the one hand you have prestige TV, and on the other hand you have reality TV? Or do we think about the spread more like — on the one hand you have Netflix, on the other hand, you have Twitch? Like, is that the way we’re going to think about the ecosystem writ large, or are we going to be a bit more specific when we use the term, when we do our coverage? I think that’s also — you know, what we talk about is just as important about how we talk about it. And so…
Advice for starting a podcast
Sonal: Do you want to say one more thing and then…
Connie: No, I want to ask you questions, because there’s so many of my friends today who want to create podcasts. And you created the “CFI dcast” from scratch to what it is today.
Sonal: Well, to full credit, it was actually created before I joined. And I took over three months in the production and then hosting it a year later.
Connie: Okay. But I know, like, the user base massively — the listenership massively grew under your care, so I think you should talk about, you know, what are your tips for someone who just wants to get started on podcasts?
Sonal: Oh my God, that could be its own episode and I’d love to do that someday. So I guess maybe in the spirit of creation, which is the theme of this episode, I’ll just say some very quick high-level takeaways. Which is, one — and I do this when I give a lot of talks and talk to founders about how to start their own things for their companies…
Connie: Yes?
Sonal: …I think the fundamental thing people need to ask is where they are in the taxonomy of shows that I outlined, because that is, sort of, a flow chart for what your next step is for either how to hire, build, or just what tools to use. If you’re a cult-of-personality show, the things you can do are very different than if you’re doing a brand show, than if you’re doing a serialized narrative show.
So the first thing I always ask people is, what is your goal and what kind of show you want? Because it’s a very crowded environment. So then the next thing is — attention is scarce. With podcasting, maybe less so, because you have a bit of a captive audience in a phone, or a commute, or a workout — or, you know, a situation where they are on a hike or a walk, where they’re only going to listen. But even then, you are competing with other shows, so the number one thing is how you differentiate your show. And one of the number one ways to get a lot of listeners is to have a lot of episodes — a variety of episodes. And so the other way to do it, then, is to enforce seasonality, where you drop a season of episodes — and then just, like, drop them. Like, you know, record 10 and drop them.
Connie: So, basically, if you want to do it, it’s like a long-term commitment?
Sonal: I don’t think it has to be, because — as you’ve also talked about — there’s a lot more tools emerging and startups emerging that will allow, like, experimentation and sharing.
Connie: But for now, it has to be a long-term commitment?
Sonal: I think Ben Thompson said this — “headcount is the biggest predictor of how much people invest in something.”
Connie: Yeah.
Sonal: And I think if a company has people dedicated to podcasting, then you know they’re serious about podcasting. I would say it’s as simple as that. So you do have to invest in it to make it happen.
Connie: Yep.
Sonal: But on the simple mechanics, one of the most beautiful things is the thing that I complained about — which is the very thing that also is the best thing about podcasting — is the feed ecosystem makes it so easy to simply record an episode, distribute wherever you want. And then it’s about using the feed ecosystem to then freely put your feed out all into the world because it’s as simple — all iTunes is doing is taking a bunch of feeds. All we had to do when we got on Spotify was, like, feed them our feed.
Connie: Yeah.
Sonal: And people can self-select the feeds into different apps, so you can use that to your advantage. And there’s a ton more about the content side. But the one thing I do want to say is that the editing process is now becoming democratized, because there’s a huge gap. I would often put it as the analogy between design and manufacturing, where there is a design phase and a manufacturing phase. And you need to close and tighten that feedback loop to get the best content out. And what’s happening with tools like Descript — you tighten this feedback loop between design and manufacturing, where you no longer have to separate creators and writers from the technical skills of actually editing a podcast.
Connie: Yeah.
Sonal: So that’s really important, because there’s a whole bunch of tools now, though, on the analytics side that will — and there are new — a bunch of distribution tools that are now connecting all these pieces and supporting creators. So it’s a very quick answer. There’s so much more I can say on this.
Connie: I think we need to do another podcast on how to create podcasts.
Sonal: Well, that would be fun. Thank you for joining the “CFI dcast.”
Nick: Thank you so much for having me. I really enjoyed this talk.
Connie: Thank you.
More About This Podcast
The CFI Podcast discusses the most important ideas within technology with the people building it. Each episode aims to put listeners ahead of the curve, covering topics like AI, energy, genomics, space, and more.