Numlock News: Ashley Carman on the industrialization of podcasting
By Walt Hickey
Welcome to the Numlock Sunday edition.
This week I spoke to Ashley Carman, who covers the audio industry at Bloomberg and who just launched a new newsletter called Soundbite. Carman’s appeared in Numlock a bunch; here’s a recent story of hers I covered:
Podcasts that distribute exclusively white noise sonic landscapes are a big business, with podcasts that specifically tout pleasant or neutralizing sounds regularly outperforming bona fide podcasts on streaming services like Spotify. One producer behind the podcast “Tmsoft’s White Noise Sleep Sounds” gets $12.25 per thousand listens from its commercial providers, which translates to around $18,375 per month for the neutral white noise sound mix. Another sound mix, “12 Hour Sound Machines (no loops or fades),” gets 100,000 listens daily, racking up 26.6 million streams.
The newsletter is great, it covers a fascinating area of the media business and one that is very rapidly industrializing and seeing widespread vertical integration.
We spoke about the massive behind-the-scene shifts going on in the podcasting business, why this is such a unique time for podcasts, and why all these large technology companies are trying to do in audio what Google did on the web.
Carman can be found at Bloomberg, where she writes the newsletter Soundbite.
This interview has been condensed and edited.
You cover podcasting at Bloomberg and have recently launched a newsletter all about it. Podcasting has been fascinating to watch grow from a niche to a business and now it's really an industry. You've been on the sideline for all that time; what have you seen?
Oh my gosh. So many things. My first podcast story was in 2018: It was about NPR trying to launch ad-tracking technology, which at the time was super controversial, needed buy-in from all the different industry players. They were seen as this behemoth in the space, trying to pull everyone together. If you compare that story from where I started to now, where you have all the big tech giants, pretty much, participating in the space? Just to compare apples to apples, more or less, Spotify just bought measurement companies in February of this year, they bought Podsights and Chartable. They're getting into the measurement space.
Comparatively, it's just like, wow, these tech platforms have entered. It's completely turned the space upside down. Things have just become much more competitive. There are a lot more independent production companies. It's just a bigger business, and we've seen bigger brands come into the advertising world. It's not just the direct-to-consumer brands that we originally thought of as podcast advertisers. You're now going to hear the Geicos, the AT&Ts, the big Fortune 500 companies that we typically would associate with radio and TV.
Yeah, it's been kind of remarkable. Just as a person who's enjoyed podcasts for a long time, there was the era where it was really just awash with the DTC business money, where it was all mattresses and toothbrushes that you got by the mail. And now it's weird hearing blue chip advertisers on this kind of stuff.
Basically you're going to be hearing a lot more of that, likely because, again, these tech platforms having entered the space, they're spending millions of dollars to be there. They pay Joe Rogan, just as an example, $200 million to exclusively license his show to Spotify and allow Spotify to monetize it. You can imagine, when you're spending that kind of money, you're going to need some big spenders to help you recoup the loss. That's where those big brands come in.
It's interesting. You wrote a story, I want to say a couple weeks ago, about Oprah Winfrey's podcast network and how now that there are a couple big players, these production houses get to shop around.
The story I published a couple weeks ago was basically just that Oprah's had a podcast network for a minute now. She does her Super Soul show as a podcast; she also does her Oprah Winfrey TV show as an audio-only podcast. A lot of these involve kind of just replays of content that already exists. So she's shopping around for a deal. I think that story just kind of emphasizes the fact that actually for me, there are a lot more celebrities in the space. Oprah's been there for a minute, so she's not totally new here, but there are just a lot more celebrities shopping around. I think the networks are starting to become a little bit pickier about who they want to work with. In the macroeconomic scheme of things, it's a little bit trickier to convince whoever is on top to give you that budget when you might be at a loss for quite a while.
A lot of these companies are kind of like what you'd call shingles in the movie business. You've got Bill Simmons has his little empire, you've got Malcolm Gladwell, he's got his thing, you've got Oprah, Kara Swisher. You've got these independent entities that have a little bit of an ability to move around. Meghan Markle just released her first podcast, I want to say last week. How is it for these kind of smaller production houses? How does that factor into the business?
You've seen these really big personalities who are established in the space build a business around themselves through their own networks. Thinking of other examples, Malcolm Gladwell's a really great one, obviously he's very well known as an author. He built a podcast network where he can really get into the conversations and sort of sign the folks that he really believes in and his team believes in. I think Kara Swisher is another really great example. She's been in the space for a long time, she's been podcasting for many years; she had seemingly a great chemistry with Scott Galloway and she brought him in, and now he's doing his own podcast as well, spun off of their Pivot show.
I think these players have just found a way to use their talents in that space to bring on the people they believe in and who they think can actually thrive as well. It goes far in podcasting, because one of the more reliable ways of marketing and podcast is through cross-promotion. Typically people want to hear a podcast recommendation when they're already listening to a podcast. And if you can say, "Hey, I'm a big host. I put my weight behind this person," that can go a long way.
Do you want to expand on that? It's been interesting, because for a while the Apple podcast app was terrible, and there was no real investment and it was a glorified RSS feed. It seems like they've only just realized that they've been sitting on something of a gold mine when it comes to a recommendation engine and charts and all that kind of stuff.
Apple's charts were the go-to as a way to be like, "Hey, look how popular our show is. We're charting." Now and then they got into the curatorial space as well. Apple has had a bit of a journey in the podcast world. Most recently, just really made some official moves in podcast land by launching its own subscription products. Basically podcasters can use Apple Podcasts and sell a subscription to their shows. I think that just for the industry was a moment of, “Okay, Apple's here, they're really doing something.” They're not just letting the podcast app be there as a thing, and not really putting any sort of new product features into it or doubling down on their investment there. The subscriptions really changed the game for them.
It's funny because don't we just call it a “podcast” because it was on the iPod?
Yeah, we can give Apple some credit here.
You had a newsletter earlier this week all about this convention in Texas that you went to and you were analyzing some of the shifts in the industry that we've seen recently. You've kind of seen that people desire the audio business to start looking like a business. What's the immediate future?
I think it's just not as much of a flush spending environment that we might have had. We might have seen some of these splashier big deals, and I think of course there will always be big deals and big podcasters' contracts will come up and then they'll shop around and they'll go to wherever they want to go and they'll probably get more money than they did before. That's the nature of how things go. I do think it's not going to just be so, “Let's spend this cash, let's just get this big star out there and put this name on a press release and it's okay if it doesn't deliver immediately.” I just don't know if that can last for much longer.
I think in the newsletter, I mentioned that a bunch of folks will now mention to me their forecast models for podcasts. That was never something that used to be said to me, which really sounds kind of funny, but it just really never came up. Now in conversation it'll be like, "Yeah, we ran it through our model and XYZ." I'm like, "Well, interesting." Now we're really referencing models here. I think they want to know, these podcast executives, they want to know that if they're investing in the show, they have buy-in from the talent and also they will actually be able to see some growth there and they have a true potential hit on their hands that can recoup the costs.
The newsletter's called Soundbite and I love it because it's kind of an open idea about the audio industry in general, which is not merely podcast. But it is a little bit of a return to form. There was a time in the early 2000s when Clear Channel was this enormous audio juggernaut, and people were worried that it was getting too big. You saw talk radio being this massive force. It's interesting to see even folks like Sirius XM as one of the biggest players in the podcast space.
Oh yeah. The radio companies, they're in on podcasting. I think they know that the days of conventional broadcast radio could probably eventually disappear. We're on our cell phones now and CarPlay and everything else. iHeart is a huge player in the space; Sirius XM, major player in this space; Cumulus, very big in the space as well; and Audacy — formerly Entercom — which bought CBS radio, they're also there, with Pineapple Street and Cadence 13. All these radio companies see potential in podcasting and are definitely present in the space.
What do you think is one of the more interesting moves from the past year or two? Just because it seemed like there have been a lot of companies changing hands, they're signing with Spotify or somebody's leaving Spotify. What is a personnel or corporate move or realignment or merger acquisition that kind of made you say, "Wow, that's particularly interesting?"
I think one of the most important moves in this space was Spotify buying Megaphone, which is a podcast-hosting platform that also has a marketplace that they call now the Spotify Audience Network. It's a marketplace on Megaphone that inserts ads. I think that move was so critical because it really showed that Spotify was ready not just to have its own content networks and really be content with distributing shows, but actually being like, "Hey, we want a hand in other businesses." Basically, lots of podcast networks will host on there. They'll receive their ads from Spotify, directly, and Spotify, of course, will take a cut of that.
Amazon made a similar move with Art19 when it acquired Art19. They haven't been as loud about their goals there. With Megaphone, Spotify's been pretty in front on that, but I do think when these big tech companies got into the hosting space and the monetization space, that was a pretty big moment in the industry.
I think so much of the news is just talking about the content deals, but all the stuff that's going on underneath the hood seems to be kind of getting some of that vertical integration that you typically see before these industries really pop.
The story of the ad tech is honestly the biggest story, because podcasting really was this sort of person-to-person, “Let's broker this deal and do some direct response advertisements, I'll read the ad for you, I'll talk the promo code, I believe in the product.” That was kind of how the industry worked and now we're moving toward a space that's all about programmatic advertising. Those big brand advertisers getting slotted in.
Google's not really present in the podcast space. They have a podcast player, but they don't have this massive ad product like they do for the web. I think that it's left this open room for someone to figure out, can we be the biggest player in programmatic advertising and do what Google did for the web?
It seems like Google's not even fighting in the space beyond YouTube.
Well, that's the thing. They have their podcast player, Google Podcast, but then they just recently, last week, launched a podcast landing page in the U.S. for YouTube. They're a little behind the ball there, but at the same time they are one of the biggest podcast platforms, kind of inadvertently.
Joe Rogan, we think of him as a YouTuber, Logan Paul, Emma Chamberlain, they have podcasts and they also are YouTubers. Logan Paul, I'm pretty sure, puts his video podcast on YouTube. People are still consuming podcasts there. It's just what we traditionally think of as a podcast with our RSS feed gets really wonky. It's not there. They're not doing that yet. So it is a little bit different for sure.
I guess before we kind of wrap it up, what are your favorite podcasts?
Oh my gosh. So I used to work at Vox Media. I'm still a big Vox Media podcast listener. I do love Pivot. I'm really loving Sam Sanders' Into It show from Vulture. It's so good. I'm really, it's a very, very fun listen for me. I'm loving Shameless Acquisition Target from Laura Mayer, which is built for me. I don't know if you've seen what this is, but it's a podcast where she basically, she's a very famous podcast person, she's well known in the space, and she basically tries to build her own podcast empire that will get acquired and she is very shameless about it.
It's literally just built for me. It's basically a Podcast Business 101. Those are the three that I would say I listen to pretty regularly. I'm always trying new shows, for sure, always trying to find new things.
The newsletter is Soundbite, why don't you tell folks about it and where they can find you?
I have this newsletter Soundbite, it's about all things audio industry. It's a lot of podcast coverage, but it'll also be about the music business and what's going on there, because I'm pretty sure that those two worlds are going to intersect and there are going to be some interesting stories that come out of it. So that is Soundbite.
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