There is no doubt the podcast industry has taken off in recent years. Particularly since the COVID pandemic, there is now an abundance of shows available across a number of platforms. With global podcast listeners forecast to grow to 504m by 2024. 

The rise in podcast popularity has been driven by not only the rise in listeners but also a fall in production costs. Making podcast production more affordable and therefore accessible to creators. On top of this, recent years saw an influx of corporate cash from the likes of Spotify, iHeartMedia, Amazon and SiriusXM investing money into these shows in pursuit of greater ad revenues.

However, the podcast industry is starting to brace itself for recessionary concerns. With studios reigning in budgets and layoffs across the board this could be a tough year for the industry. Big spending from media houses is likely to be scrutinised and come to an end. Coupled with more selective dealmaking in a slower ad market. Additionally, the extraordinary listener growth of the last few years is beginning to falter.

While listener numbers are still growing, the enormous increases we have seen in recent years are dropping off. In key markets like the US and UK, listener growth was 5% in 2022 – a meagre rise compared to double-digit increases seen previously.

Is the podcast industry at a tipping point?

As we enter a period of industry introspection, production company belt-tightening is starting to take force. The first half of this year might be rough. For example, advice by investment banks in January this year downgraded Spotify from “buy” to “hold”. On the basis that convergence between music, podcast, audiobooks and fandom was happening much slower than expected. Alongside this slowdown, Spotify might struggle to excite investors over the potential to see subscriber churn if it increases prices, much like Apple, during a recession. 

In the past, podcasts have relied predominantly on two methods of monetisation: subscriptions and ad revenue. With change on the horizon, the current ad-driven monetisation format in particular may need reviewing. Unless you’re part of a larger, more diversified business or funded by a backer that does not rely on income from your show for their survival. 

There is limited infrastructure for tracking user journeys on external platforms back to podcast listens. Which makes it difficult for advertisers to measure the full impact of their campaigns. Podcasts are generally seen as a brand-building exercise as opposed to a direct sales conversion tool. Marketers may choose to hold back some of their podcast advertising budgets and instead focus on safer conversion pipelines. Podcasts can be a tool to bring in audiences, but it can be hard to monetise them through traditional monetisation methods. Particularly with brands refocusing on sales conversion rather than overall awareness.

Indeed, podcasts are not typically considered the biggest money-spinners out there. In fact, the old saying goes that the best way to make money from a podcast is to sell your equipment. Jokes aside, podcasts are still a handy tool to create engagement among customers, especially when they are used to support another business venture.

Looking at what makes a successful podcast, there are some common features when we consider the most popular shows:

• A lauded front person, whether that be a distinguished host or a celebrity guest who is invited on to the show in the hope of bringing their own audiences with them

• Authentic content

• Format: Specialisms in either long-form story-telling or short and informative formats tend to stand out from the crowd

But listeners are getting bored of traditional podcast formats. They’ve heard interviews with all the A-List celebs 5 times over and they don’t want to listen to another true crime story. It’s no wonder that creators are niche-ing down to find unique content to bring to the market. It’s time for creators to get truly creative and think outside the box, even outside the studio.

The shows that will really thrive are the ones that use the platform they have created to engage their audience through multiple channels, like live shows and events. Think Fearne Cotton’s ‘Happy Place Festival’ and Rory Stewart and Alistair Campbell’s ‘The Rest is Politics’ in-person current affair debate. Each has effectively leveraged virtual listeners and monetised through ticketed live events. Similarly, utilising multiple channels can be effective, such as through video which can be played out on social media to build engagement with an even wider audience.

With the future of the podcast industry (and the traditional ad formats) changing, we can expect to see the most successful shows as the ones that diversify into other product spaces and channels, or who use podcasts to create greater engagement for a separate business venture. 

Although we may be seeing a tipping point in the industry, this isn’t the end. For such a new industry, we are likely to see changes in the industry landscape as the economic turmoil plays out, but the view on the other side may just look a little bit different. Ultimately, great business models should prevail and creators will still innovate. The short term may be hard, yes, but if it means an end to bad practices and silly money from marketers, then that’s no bad thing.

At Manifesto, we are experts at building fantastic digital experiences with companies across a variety of sectors that can drive value from your customers at every stage of the customer journey. We have a wealth of knowledge and experience in the media sector specifically, having worked with a number of leading media companies to drive customer engagement and growth for their businesses. Contact us to find out more.