Watching Podcasts

In the summer of 2013, my friend Jake and I took a group of Digital Wes interns to visit WNYC where we had a tour and roundtable discussion with a group of alums who worked there. During that discussion, one question that came up was how they thought about internet-based streaming in their audience measurement? The answer was that they didn’t — back then they considered their audience as listeners entirely coming from AM/FM dials, in commuting cars and from home and office radios. I was pretty shocked by this at time and I’m sure that that framework of measurement has evolved and expanded since. The moment has come back to me recently as the podcast world has woken up over the past year or so to the reality that enormous swaths of podcast audiences prefer watching to listening. And Youtube again reminds another content-media segment just how ubiquitous it is, having scooped the video side of podcasts’ production, distribution and their video-centric audiences just by being itself.

On one level, these are the latest versions of the innovator’s dilemma IRL and certain legacy incumbents missing the nascent signals of the next big shift in their industries. For audio-originating media, this seems to have played out a few times over during the last decade and a half. And while certainly those that have had the foresight to act and evolve have at times been established corporations, their gains have come at the expense of other legacy firms. The elephant in this conversation is Apple. Since coming up with the $0.99 per song model, Apple has struggled to adapt to demonstrable consumer behavior which preferences broad availability and ease of access over audio content that is downloaded and owned. The ten year head start they had with iTunes post Napster didn’t make them wise to that reality, allowing upstart Spotify to rapidly corral and dominant music in just a few years. History then immediately repeated itself as Spotify scooped up podcast apps as well as popular podcast series and hosts in recent years and, seemingly without competition, became the primary podcast player worldwide. In 2017, Apple accounted for 80% of podcast listening and in 2019 still dominated with 63% to Spotify’s 9.5% market share. Today, Apple clocks in at 11% to Spotify’s 25% and, news to many, Youtube’s 33%.

So with podcasts going visual, this is perhaps the first time Spotify hasn’t been able to gobble up an audio segment unaccompanied. Lately of course Spotify has moved to quickly roll out its own, in-app video offering for many of its most popular podcasts which it owns or has exclusive rights to distribute or distribute early. The jury’s out on how the new UX/UI video interstitial is performing with Spotify users. Design wise, it feels like it can be self-defeating to squeeze things in, risking clutter, confusion, and unwanted product additions. There’s no single platform that can be everything for anyone and when the variety of consumption methods potentially compromises the familiar ease of consumption (and to a lesser degree discoverability), new features can fall flat.

The recent youtube-ification of podcasts isn’t the first time that video has emerged as a complement to audio-centric media. World Radio Network in the U.K. pioneered experimentation with internet streaming and video elements for radio broadcasts all the way back in 1992. Popular AM/FM radio daily talk shows from Howard Stern to The Power 105.1 Breakfast Club have simulcast on broadcast television for years. It always struck me as odd though, being that the tv simulcast was basically just a CCTV-esque camera on a show’s hosts in the station booth. But they’ve been popular, at least enough for first cable networks and now streaming partners to keep broadcasting them. In early eras, barriers to entry at each segment of production, distribution, and consumption limited the scope and participation in radio’s tv simulcast. Surely only the shows with established enormous, reliable AM/FM audiences and broadly famous-celebrity hosts were green lit to test out live tv time on cable channels. Video production, even in these simplest forms, was much more expensive. And, though TVs had long since vanquished radios as the primary home entertainment center, screens did not yet follow us everywhere at all times in our pockets.

All of those barriers, in every direction of supply and demand value concentration and potential, are gone now. Anybody with a podcast can try out video with an iPhone or laptop camera and a youtube account. Since youtube is free-to-watch accessible with algorithmic focus on user discovery, shows are easy to find on phone, web browser, tv, or iPad. I imagine this ease is what gave rise to many podcasts dipping an organic, opportunistic toe in the video water. With primary podcast revenue coming from Spotify and Apple ad rev share as well as Patreon fan clubs and touring in some cases, Youtube/video could be a relatively passive new revenue stream. One that’s extremely low cost for essentially the same product they’re creating in audio. The “set it and forget it” 55% revenue share from youtube’s ad break interstitials are automatically paid and can print money for hosts above a certain view count threshold without them having to do more work.

I don’t mean to downplay what I’m sure can be learning curves involved making secondary video broadcast of podcasts. I mean that there aren’t steep costs, production teams, or fancy equipment required to do it. When barriers disappear, the white space presents a limitless canvas. Many podcasts have successfully let their creativity loose or otherwise leaned into overall video production quality. Shot-reverse-shot edits, slick transitions, animated episodes and some mise en scène flair can make video pods more engaging and, clearly, preferred by many audiences.

The rev share details for Spotify and Youtube are also interesting to consider as well as the audience reach and engagement priorities for each platform. At their core, both build from the RPM metric (revenue per mil) which itself derives from the CPM (cost per 1,000 impressions) pricing model both services charge their advertisers. From 1,000 ad impressions and up (trailing 30 days), Youtube splits ad revenue 55/45 in favor of creators, while Spotify splits an even 50/50. In terms of reach, Youtube dominates. Where Spotify counts 700 million monthly users of which ~190-200M are monthly podcast listeners, Youtube is closing in on 3 billion monthly users 1 billion of which are monthly podcast content viewers. These numbers alone would be enough for podcasts of all sizes to venture into video and, as mentioned earlier, Youtube as a platform prioritizes that enormous reach via new content discoverability and algorithmic recommendation to users. Spotify the podcast platform has honed in on existing audience engagement and retention, notably with their 2024 Podcast Partners Program which facilitates exclusive podcast content via additional subscription à la fan club and community models, with 100% of that revenue passed on to the podcasts themselves. More recently, Spotify, perhaps in response to the Youtube market share, has expanded their Partners Program, launching generous rev share incentives to podcasts that host their video components on Spotify.

It should be noted as well that, thus far, podcast audience size has followed a power law distribution. The top 1% of podcasts operate in a different stratosphere compared with the substantial long tail of everyone else. This is why, on top of their financial success within the models above, Karen Kilgariff and Georgia Hardstark of my beloved My Favorite Murder, The SmartLess team, and Rogen can sign $100-300M, multi-year distribution and advertising deals with the platforms of their choice. This reality also highlights a unique characteristic of the podcasts that, so far, have risen to the top of the charts first as audio only and more recently with video. The vast majority of the most popular audio and video podcasts are high-volume (2+ episodes weekly), conversational content. Some more general topically and some extremely niche, but they generally aren’t narrative, multi-episode or multi-season, fictional or investigative, heavily produced, prestige-esque podcasts. As transformational as the first season of Serial was for the industry, it’s been awhile since the series topped charts. And that’s not a knock, it’s that those lightning in a bottle, addictive narrative stories are hard to find, take time and money to produce, and, given the subject of this post, often don’t translate to visually compelling content. Consider This American Life, which endures as a narrative non-fiction audio institution. From 2007-08, Ira and the team created a tremendous televised version of TAL as a series on Showtime, it was critically lauded and won several Primetime Emmys, but only last two fleeting seasons. All parties involved were very honest about the retrofitting of masterful narrator-driven audio stories to visual media didn’t always work, especially without a given potential story coming with a stockpile of historical footage, courtroom tapes, or never before seen clips.

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Overall, I think it’s a fascinating development for a podcasting format which early on many, including myself, noted a unique engagement potential due to audio being consumable in many more day to day experiences than video. Yet if headphones and podcasts have been copacetic secondary entertainment while at work, cooking dinner, waiting in line, or trying to fall asleep, it seems that the age old on in the background attraction of television has found a surging new foothold in podcast viewers. It might be difficult to watch in the background in the office, but with WFH, minimized browser windows, and the perpetual screen in our pockets, any given day is filled with nooks and crannies to catch a glimpse or soundbite of a favorite podcast episode, with windows of non-secondary time when super fans can lock in start to finish. There’s even been examples of youtube-first shows going the other direction into audio, to their significant benefit.

Maybe we just like seeing the people we’re fond of listening to shoot the breeze, spin a yarn, or make us laugh. If a picture is worth a thousand words, how much does a video go for?