Tag Archives: economics

Podcasting—the platform battle

aPicture of young man wearing headphones by Gauthier DelecroixIf podcasting is going to become a real business it’s going to have to leave the commercial dark ages behind, evolve some more sophisticated audio platforms and —let’s face it— pick a winner. This is the second of two posts about the evolution of podcasting. Part one is about the explosion of new formats.

How did we get here?

One of the geeky pleasures of the audio boom is the secret knowledge that the whole teetering, upside-down pyramid of podcasting stands on the back of a simple technology that’s nearly twenty years old.

It’s called RSS (which stands for Really Simple Syndication) and it was designed as the simplest possible way to share content on the early web —a way to publish lists of links to stories so that other web sites could receive them automatically. We use the word ‘feed’ when we talk about RSS and that makes it all sound very active —as if you’re firing your content out into the cloud when you create one —but an RSS feed is really just a regularly-updated list with a URL— a text file that’s so simple you could create one yourself, right now, if you felt like it.

RSS is simple and it’s not perfect —in its origin it was almost the definition of ‘quick and dirty’— but it’s been exceptionally effective. It’s impossible to calculate the number of articles and episodes shared via RSS since the late 90s, and, although you may not know it, you’ve certainly used it —you’ll use it today, in fact.

And the lovely, unforeseeable breakthrough that made podcasting happen was a minor tweak to RSS (thank you, Dave Winer) that allowed publishers to add media files to their article feeds. Suddenly you could syndicate your store of audio files (and video, for that matter), turning it into a globally available broadcast channel with hardly any effort. Then, in 2005 when Apple allowed users to plug these RSS feeds into iTunes, the idea of ‘subscribing’ to a podcast was born and the whole thing took off.

But the simplicity that produced the extraordinarily dynamic DIY content industry we call podcasting has also radically limited it. This passive, statelesspublish and subscribe’ model means that publishers can know essentially nothing about who is on the other side of the transaction, downloading the audio. So, while creativity in podcast formats and content is essentially out of control, innovation in distribution, ad-tech and in understanding audiences has hardly begun.

The upside, of course, is that Podcastland, at least so far, is a near-Utopia for privacy and freedom fans. The simplicity of RSS effectively inoculated podcasting against intrusive ads, data harvesting, fingerprinting and the rest of the miserable ad-tech toolbox. At least for the time being, subscribing to a podcast is the least compromising thing you can do online. In the increasingly predatory 21st Century digital marketing landscape, RSS is a glorious 20th Century anachronism. Long may it last, cry the listeners.

For podcasters and advertisers, though, the technology is irritatingly non-dystopian. It lacks some really basic features that they’re going to need if it’s going to become a real business, a self-funding medium in its own right.

What’s wrong with podcasting now?

User data is laughably thin. There’s some subscriber data locked up in Apple’s servers but, even if you could get it, it’d be close to useless, at least from a voracious ad-tech perspective. Podcast owners can now get nice-looking listening graphs from Apple and your own server data will tell you how often each episode is downloaded but that’s essentially it. There is no equivalent for the insane level of detail you get from Facebook Insights or Google Analytics.

You’ll learn nothing useful about how people listen. Want to know where your subscribers listen? What time of day? What they’re doing on their phones while they listen? Are they running? Commuting? On holiday? And what else are they listening to? Sorry. Not happening (you can ask them, though).

You can’t serve ads with any kind of intelligence —no pre-rolls or mid-rolls, no dynamically served audio at all— so no holiday ads during the commute, no Bisto ads on the way home and no control over frequency or day part. No geotargeting, no retargeting, no tracking, no spookily accurate robo-ads, no personalisation of any kind. For the time being it’s mattress ads all the way down.

But, of course, this low-tech Eden —this splendid anachronism —is not long for this world. Be sure, the ad-tech is coming, and it’s not just commercial podcasters who want to personalise audio —public service media will want access to these tools too.

The new audio platforms are already here

There’s a generation of new podcast hosting platforms. They’re offering podcasters a way to understand their audiences and —finally —to make some money. These new platforms deal with the holes in RSS by, well, getting rid of it all together. Run a search at tech business portal Techcrunch for “new podcast platform” and you’ll get a list of a dozen new and evolving businesses —ACast, Megaphone, Anchor, BuzzSprout, Stitcher… The business models vary but the pitch is obvious. In a hundred boardrooms, this week, someone will say— “audio is the new video, something, something, true crime podcasts are like crack for millennials, something, something, there’s no Netflix for audio, something, something, the targeted ad opportunity is enormous, something, something…”

So these platforms are going to start acting like platforms. Expect them to fight it out for ownership of the big podcast brands —just like Amazon and Netflix do with the TV brands. The audio business is inevitably going to look more like the crazy mosaic of rights, territories and exclusive deals of the video business. Your latest binge listen will be on ACast or Apple Podcasts or Stitcher but not “wherever you get your podcasts.” And the abandonment of cuddly old, simple old RSS will result in a wave of new and more intrusive ad formats. Get ready for personalised ads, ads that know where you are, ads that follow you from platform to platform and —you’ll like this —ads you can’t skip.

Common sense suggests that even the fancy end of audio is never going to be worth more than a decent fraction of the video streaming business but the investors diving into podcasting now are serious about it and want to build a business with real scale. And, let’s be honest, it’s in everyone’s interest for them to succeed —the mattress ads are not going to sustain a heterodox commercial audio ecology for long and the planet’s already stretched public service providers certainly can’t do it on their own.

Realism (and good evidence from the rest of digital media) also tells us that although we’d love to see a hundred flowers bloom, the audio business is going to pretty quickly shake out to a small handful of big platforms —with one global player making the rules, setting prices, shaping supply.

Can we take an educated guess as to who that will be, though? Which of the handful of serious-looking platforms will dominate podcasting?

So who’s going to win podcasting?

All right, I’m just going to say it: it’s going to be Amazon (I’m taking bets —leave a comment if you want some of the action). “But hold on”, I hear you say, “Amazon’s audio platform is called Audible. It’s a repurposed audiobook catalogue and, despite years of effort, they haven’t made even a tiny dent on the non-audiobook business. An audio outsider like Amazon doesn’t stand a chance!”

You’re right, of course. They’re slow off the mark and Audible itself is a pretty charmless environment in which to win over the next generation of audio nuts. There’s even a reasonable chance that Amazon will just ignore the podcast revolution all together, write the whole thing off and focus on the Billions they make from retail, video and web services. But I doubt it. Here’s why it’ll be Amazon that wins podcasting:

They’re everywhere. Amazon apps —shopping, video, music, Kindle, Alexa —have hundreds of millions of installs between them. Installed on audio-ready devices and pre-loaded with credit card numbers and a detailed purchase history.

They have a billing relationship with millions of people. There are around 90M Amazon Prime accounts in the US and it’s estimated that each spends $1,300/year with Amazon (about a third of UK households are already paying members). Few have even a fraction of Amazon’s customer base, let alone paying customers. Audible itself is a subscription platform that’s cross-promoted to Prime subscribers and Amazon has made clever use of cross-promotion in launching a dozen other services over the years.

They know how to sell media to millennials. They’re no Netflix but Amazon Prime Video already reaches millions of people in podcasting’s demographic sweet spot. Audible, in fact, already commissions a small number of ‘original audio series’ (they don’t call them podcasts, of course) and cross-promoting them to the company’s other audiences will effortlessly produce the kind of listening figures that most podcasters would kill for.

They own the most promising new interface to the global store of audio. Echo is the best of the voice-controlled devices and it’s already in 11% of US homes (an adoption rate that looks similar to that of radio in the 1920s). Better yet, it turns out that audio is one of the most popular services among users (according to this RadioPlayer research, from the UK, radio is the most popular category of audio on ‘smart speakers’). The affordances are perfectly aligned. Who knew?

Their platform will permit all the scary ad-tech. No dependence on sad old RSS here so there’s nothing stopping Amazon from dynamically serving you ads, right into the audio stream —and all targeted with insane precision, because…

…let’s face it, they know everything. It’s not clear exactly what information the Audible app captures as you listen but it’s safe to assume that —in addition to Amazon’s detailed understanding of what you like to buy— they know where and when you’re listening, how often you listen, how far you get through a download, how many sessions it takes you to complete a listen. And it would be trivially easy for Audible to capture a more detailed picture, using the sensors in your smartphone to learn what you listen to while you’re working out, while you’re commuting, on your lunch break, in the woods, on an aeroplane, in bed, in the vicinity of a military base

This level of detail —especially if passed on to producers— would profoundly change podcasting, becoming the primary influence on choice of formats, voices, themes and styles across the business —just as it has in journalism and video. More, it might secure commercial viability for an industry that, frankly, still looks shaky.

The only question, for Amazon, is going to be “how much is this worth?” If podcasting turns out to be worth a tenth of video streaming, it might be worth the engineering and marketing effort to relaunch Audible as a podcasting platform. If it’s a hundredth, they’ll hesitate and may not even bother. And, incidentally, this may explain why Amazon has been slow to capitalise on Audible’s ubiquity. Is Amazon holding back because their data tells them that podcasting’s just not worth it? I do hope not.

Bonus episode

I’m aware that I’ve left out some fairly important platforms. Not because I don’t think they’re important, although, actually, I don’t think they are quite as important. But I accept that some of these stories are going to be as interesting and influential as the big ones above…

Spotify’s Podcast offer is pretty rich but it sits alongside music uncomfortably —and there are some pretty hideous interface issues. The Swedes are about to raise a lot of money via an unusual direct listing on the NYSE, though and they could choose to blow a chunk of that money expanding their catalogue of commissioned audio content (and tidying up the UI). That would be interesting in itself, because it would represent an opportunity for institutional and retail investors to get involved in the next generation of podcasting platforms pretty directly.

Meanwhile, Who We Be, a new podcast tied to one of the platform’s big urban music playlists and presented by British DJ and broadcaster DJ Semtex, is probably a model for the next wave of speech audio from Spotify.

Soundcloud is also a podcasting company. Their stock of audio is enormous and the “wherever you get your podcasts” model means that lots of producers publish their stuff on Soundcloud automatically. But the money Soundcloud raised in 2017 is going to be devoted to keeping the company afloat and finding new focus. Building a new podcast brand is off the to-do list.

Google’s approach to podcasting is to make it another checkbox on the long list of services you can access via the mobile app. This checkbox approach commodifies the business, though, and makes it difficult to build a big, prominent brand. But we probably shouldn’t rule them out: they’ve already commissioned at least one original podcast series (although it seems to be on hiatus).

Apple’s podcast app got better in 2017. The data available to producers also improved. And no other platform can match the support the company’s podcast teams supply to producers in big markets. The charts and category pages they curate remain the primary way of finding the good stuff for listeners. There’s an obvious opportunity for Apple to convert this epic organic advantage (and a tiny shred of that enormous cash pile) into a serious new commissioning platform —although the company’s careful progress into video commissioning is probably a good guide to how this will unfold (Apple has commissioned eight TV series since hiring Jay Hunt in October last year, though).

Smartphone apps are very interesting (they’ll need a post of their own, really). They’re interesting because they can deliver a lot of the important platform benefits —a logged-in experience, dense listening data, recommendation and discovery, even a billing relationship —while piggy-backing the existing RSS-and-string-based infrastructure. No need to reengineer the distribution layer. These apps depend on the continued availability of content via the old RSS infrastructure, though, so if the big podcasts disappear into walled gardens, their catalogues will shrink and they’ll be left with only the DIY end of the market.

The podcast category in your app store is packed with interesting apps —some of which have been there for years and some of which promise an improved experience for listeners and even some income for producers (if you’re using one of these apps and you like it, leave a comment —I’d love to know which apps are doing this right).

The podcasting boom will support a complex services ecology. Lots of smaller businesses —usually with a national or niche focus —are providing services to the flourishing DIY end of the business. Hosting, audience measurement, editing, audio optimisation and —in some cases —advertising/sponsorship services. This is a good sign —a complex services ecology = a viable industry. Some of these businesses will try to scale up to become platforms. One or two might actually achieve it.

The BBC and other big broadcasters and publishers are in a tricky position. They feel an obligation to participate in the audio explosion. Some, of course, are grizzled pioneers in this business —try to count the number of online audio products launched by NPR, The Guardian and the BBC over the years and you’ll soon run out of fingers. They have big existing audiences, production talent and engineering know-how to bring to the game but they can’t easily challenge the mega-platforms on range or promotional clout. This is going to get interesting.

The first of this series of posts about podcasting is about the creative battle. Also read my 11 essentials for the modern podcast.

Picture by Gauthier Delecroix, on Flickr.

Games that disappear

godfinger

You can’t play Godfinger any more. It’s gone. ngmoco, the developer, removed the game (plus a couple of others) from app stores during February – and it’ll stop working all together at the end of this month. The raw economics of mobile gaming. But what happens to games that are packaged as apps when they’re discontinued? Looks like they disappear completely, as Jared Nelson points out on TouchArcade. No shoebox of carts under the bed, no stack of dusty DVDs, no folder of neglected binaries. Gone. Absent from the record.

The closed nature of mobile platforms means you can’t capture a binary for the archives and, unless the Library of Congress has an archiving scheme I don’t know about, this piece of intellectual labour will be removed from the record for good come April, leaving a tiny but perceptible hole in the timeline. This isn’t even a DRM story. It’s just about the mechanics of distributing entertainment in the app era. Is it important? Should we just accept it: the ruthless logic of 21st Century digital creation? Or are we going to be freaking out in fifty years when we realise we’ve built a one-way conveyor-belt to oblivion for digital work and we’re all going “what were they actually DOING back in the early twenty-first Century? They seem to have left no trace.”

David Hepworth – a Q&A about curating music

Word Magazine issue 100 covermount CD artwork

It has been my privilege, over the last few years, to write a few pieces for Britain’s best music (and arts and movies and stuff) magazine The Word – including, a couple of issues back, an article about the curation boom (my articles about Wikipedia and archiving the web are on the web site).

The magazine’s publisher is David Hepworth (its editor – and the man to whom I tremblingly submit my copy – is David’s long-time publishing partner Mark Ellen). David oversees the selection of tracks for Now Hear This, The Word’s covermount CD: a monthly curatorial gem that regularly stays in our car CD player for the whole month (until the next one comes out).

I asked David a few questions about this rather successful example of 21st Century music curation (and also about his Saturday morning vinyl curation habit #platterday).


SB: tell me about the Word covermount. How does it come together each month?

DH: It’s put together by Andrew Harrison and Alex Gold with ideas thrown in by everybody else.

Are you extensively schmoozed by label PRs? Do bands send you stuff?

The record business is on the bones of its arse but you wouldn’t know that from all the stuff we get sent. Yes. PRs are instructed to try and get certain acts on the CD. it’s one of the few places where they can place unheard music and assure it gets heard.

Are there punch-ups in Word Towers about who’s on it or do you keep it all to yourself until its done?

No punch ups. You chase thirty tracks and you can’t get all of them. You might get twenty possibles which you edit down to fifteen. You need a mix.

What are the economics of the covermount? A few years ago everyone seemed to have one – and the newspapers went mad for them. How do they work?

Newspapers etc. have them for totally different reasons. They pay big money for music in order to outsell their competitors. Eventually they realised that the likes of Prince were taking them for a ride. They cost a lot of money because you have to pay mechanical royalties with them.

What’s the fate of the covermount? Will you replace it with a memory stick or a Spotify playlist?

No. It works because it’s a physical object.

Supplementary question: tell me about #platterday. Is it a model for publishing in the social media era or just what you do with a bacon sandwich on Saturday mornings?

I just got out my old deck and loved restoring the ceremony of playing black vinyl records on Saturday morning. Twitter just seemed an obvious way to share that experience. I posted a picture of a shelf full of my records and people started saying “oh play that one” which is clearly insane.

What is curation in this new sense? Is it different from being an editor?

I dunno. What I’m always trying to do is say something that doesn’t sound like the usual over-heated recommendations. It’s very hard. I find 99% of recommendations don’t actually convey anything about the nature of the thing recommended at all. They’re just endless variations on the expression “it’s brilliant!” Saying something meaningful about music is very hard, that’s why most people don’t bother.

Is there a business in it?

Shouldn’t think so.


David keeps a rather good blog of his own and curates a storytelling night called True Stories Told Live.

UPDATE: I asked David why he no longer picks the tracks himself. He says:

I did it for three years and was only too delighted to pass the job on. If you choose the tracks you have the unenviable job of writing the accompanying blurbs, which is like pulling teeth.

A parable of sorts (about the music business, I feel obliged to point out)

Dolly the cloned Sheep

The year is 1823. Nathaniel Burrell, sheep farmer, has stumbled upon a method for duplicating sheep. To cut a long story short, after years of essentially random cross-breeding he now can produce new sheep on demand at no cost. A quick twist of the tail of one of his miraculous cross-bred sheep and you’ve got a brand new one, just the like the old one, just standing there, blinking.

Burrell keeps the news to himself and makes a handsome turn selling the newly-minted sheep at the local livestock market but pretty soon people notice the smart new horse and cart in the drive and start to wonder where all the extra sheep in his fields are coming from and then a lad spies the whole process from behind a hedge and soon enough everyone knows you can get free sheep up at Nathaniel’s place.

To begin with it’s just the local miscreants but fairly soon everyone’s up there, day and night, picking up free sheep and herding them back to their own fields or back yards or box rooms. Of course, it’s not long before people figure out that the duplicate sheep have the same ability: quick twist, new sheep. Blimey.

So now everyone’s got their own and they’re busy making more for their friends. Nathaniel is pissed off. As far as he can tell, these people are stealing his stuff. “These sheep are mine!” he yells as the vicar and his wife lead four fluffy new sheep down the lane. “What do you mean, they’re yours? They’re free aren’t they?” “Yes, but they’re mine! They’re my invention, my thing!” “Does it cost you anything when I make a new one?” asks the vicar. “Well, no, but they’re still mine. And besides, I make my living from selling these bloody sheep. Nobody’s buying them now are they? Not now they can just twist-and-go!”

“I see your point, friend, but I think you’re barking up the wrong tree. Sheep are free now. I think you’re just going to have to get used to it.”

There follows a period of disquiet, during which Nathaniel makes a spirited effort to persuade the world that these free sheep are all really his. There are ups and downs. He wins a few small victories – various slow-witted judges are persuaded that the duplicate sheep actually belong to farmer Burrell, some people are even punished, although transportation seems a bit rich for the theft of a sheep that even its legal owner doesn’t actually need and even wise judges sometimes changed their minds.

Farmer Burrell even invests a few hundred guineas in an elaborate and annoying system of padlocks and sticks, which he calls SRM (Sheep Rights Management) which is meant to protect his rights by stopping people from making copies of his sheep. But the system is awkward and some people can’t get it to work at all (and it hurts the sheep) so it’s soon abandoned. Nathaniel’s not really winning the argument and the whole time people are just making more and more copies of his precious sheep.

An economist friend comes round one afternoon: “the problem with your sheep is that they’re not rivalrous any more and they have precious little excludability. They’re basically a public good now.” His friend encourages him to give up on the law suits and the nasty letters and the increasingly desperate efforts to stop people from copying his sheep. He’s just banging his head against a wall. The world has changed.

In the meantime, of course, the price of an ordinary sheep, bought in a market or at the farm gate, has fallen to a fraction of its pre-Nathaniel value and a lot of people have decided there’s no point trying to sell them at all. They’re opening innovative lamb restaurants and sheep-based circuses and generally adding value to their essentially worthless livestock. Some are given away free with another recent invention: the newspaper, some are fluffed up and sold as ‘premium sheep’ for ‘sheep collectors’. Nathaniel is resigned.

After a few years, Nathaniel has given up on making money from selling his sheep and now specialises in a range of sheep-themed experiences: a theme park, a line of clothing, club nights. It’s a blast – and he’s even making some money. And since farmer Jackson came up with a way of copying cows and farmer Finch pigs, the whole space has got a lot more competitive and everyone’s more-or-less forgotten the days when you used to have to pay for your sheep. Pay for your sheep!

Pic by Notcub.

Record label angst

If the last three generations (five years = one generation) of music industry executives had been contestants on The Apprentice they’d all have been fired by now. So many self-destructive manoeuvres, so many technological and commercial dead-ends, so little readiness to try stuff. And I speak as a supporter of the industry: I don’t believe the whole superstructure of music production, packaging and distribution could or should be swept away or that labels and publishers and collection agencies and allied trades are evil or at some kind of Darwinian inflection point.

The 100 year history of recorded music is a glorious episode in the story of human culture and we should celebrate that. The risk, though, is that the current mess turns into some kind of terminal crisis. We might easily wind up remembering that hundred-year heyday as a story with a beginning (recording, mechanical reproduction, Caruso), a middle (CDs and the shift to bits) and a particularly grisly end. Nobody wants that.

There’s a good interview over at Paid Content with Terry McBride, one of the people who could, if the industry were ready to listen to him, help save recorded music. Real wisdom there.

I’ve been really trying to get to like We7, Peter Gabriel’s latest, ad-funded, online music business, but it’s not working. There’s a lot of good stuff there and it’s all free but the ads are utterly intrusive. There’s no way around it, they just ruin the music. Every track has a short ad inserted at the beginning and sometimes this is just bizarre (try listening to Lou Reed’s miserable classic Berlin with chirpy ads between the tracks, or to Shostakovich’s vast, mournful 13th Symphony) but it quite quickly becomes utterly unbearable.

The good news is that if you download a track you’ll find that in a month’s time you can go back to the site and download it again without the ad. It’s also pretty straightforward to remove the ads yourself (and that’s not forbidden in the site’s T&Cs). But it’s all pointless. Most current or popular stuff, such as that from Sony BMG, We7’s first major label signing, can’t be downloaded anyway—you can only stream it, which makes the ads unavoidable.

So I wonder if there’s an audience that won’t be driven crazy by the ads. Is it possible that teenagers live in such an altered musical world, for instance, that they can accept commercial messages as part of an increasingly heterogeneous audio stream? If you’re accustomed to soaking up your beats from the tiny speakers in a mobile phone, maybe ads are less of an intrusion—you just tune them out. Or maybe it’s got to do with the passing of the album—ads are not a big deal if you’re not hung up on the integrity of the carrier. If you consume music track-by-track from multiple free sources they’re not interrupting anything after all: they’re just the cost of the music you love…