Don't Hold Your Breath for the Netflix of Podcasts
With each new entry of a podcast app (and there are a bunch), the forecast of a “Netflix of podcasts” is written about. It is hard to see the pathway for this to happen anytime soon.
Back in the day, people would go to Blockbuster Video in search of hot titles that inevitably were all rented. While fun for a while, the process devolved into one of frustration finding the right movies along with slow lines, and annoying late fees.
The advent of Netflix changed all of that – Unlimited movies, whenever you want, in one place, low price, plus accounts for family members. A pretty irresistible deal.
You can listen to Wondry’s excellent Business Wars podcast which details the entire Blockbuster/Netflix battle, or you can take everyone’s word that Blockbuster was doomed. They failed to pivot and thus ended up the Kodak of video rentals.
Today, in the U.S. more people subscribe to Netflix than pay for cable.
Podcasting has a different set of challenges
So, what does this have to do with the frequently forecasted “Netflix of podcasts?”
Podcasting has a different set of challenges:
Most Americans watch movies; but do not listen to podcasts - According to Edison Research, 64% of Americans are familiar with the term “podcast,” but only 17% listen weekly. In spite of momentum and plenty of press, it is a nascent business that to grow, must focus on developing more mass appeal hit content and importantly, educate consumers about how to listen. Giving the 83% of Americans, who are non-podcast listeners, a simple “on-ramp” to sample and listen seems essential before anyone will throw down a credit card.
Is “if you like that, try this” a business or a feature?
People have always paid for movies, not so for podcasts – Movies are wide-appeal and high-value entertainment content consumers have always paid for. Podcasts are free in exchange for limited commercials. With the exception of Sirius/XM, and audiobooks, audio content has largely been free. Even today, free radio, while challenged, remains a vital business. Changing the consumer’s mind-set from free is not likely to occur with speed, if it happens at all.
For a “Netflix of podcasts” to work, free content available now, that is to say, just about all podcast content, would need to migrate from the ad-supported marketplace to behind a wall. That feels daunting and risky for most publishers.
More original content behind a wall doesn’t feel like an instant win either, but rather, more like a garden hose adding water into the ocean.
Is “if you like that, try this” a business or a feature? – With hundreds of thousands of titles, it is a chore and off-putting for people to figure out what podcasts are worth listening to. Surfacing personalized content, to a large degree has been elusive. The “Netflix of podcasts” is often pitched as a search and discovery solution with algorithms and smarts. Whether that will work effectively is not yet knowable. It also is not likely to be an exclusive feature of one app. Integrated transcription, for example, is on the road map for several apps and that should improve in-episode search.
While there is palpable frustration with many of the current apps, even the most avid podcast fans have not jumped away in high numbers from Apple to other apps. Most apps have less than 2% of podcast listening. Inertia? Confusion? Friction? It is likely the result of some combination of low app awareness, poor execution or low consumer appreciation of the difference.
The graveyard is already loaded with defunct podcast apps.
It all comes down to whether the consumer is willing to pay someone to organize free audio
There are plenty of apps and yet consumer adoption is hard – Indeed, there are plenty of apps that play podcasts. Google, iHeart, Spotify, Pandora, Castbox and others are forging ahead with improving free apps. Just last week Midroll rebranded and unified their entire company behind their own Stitcher app.
Of course, Apple users have a free “Podcasts” app built into their phone and yet most people have yet to discover or use it.
Paywalls are tricky - Just ask newspapers. Several podcast aggregators and content creators have already seen how difficult it is to garner traction with their biggest podcast fans failing to pony up dollars for a premium tier with their own fledgling app offerings.
To grow podcasting, content is the driver. Easy accessibility is the on-ramp.
Netflix solved a tangible series of consumer problems, and then added an irresistible layer of compelling original content to keep people engaged beyond a stagnant library.
Indeed, everything evolves. Internet Explorer beat Netscape, and Chrome beat Internet Explorer. Before Microsoft Word, there was WordPerfect. So while today Apple has a giant lead in podcasting, it is far from impossible to envision a different competitive environment. And maybe that happens, and maybe it should, but the time and cost of getting there is formidable.
Right now, to grow podcasting, content is the driver. Easy accessibility is the on-ramp.
As far as the “Netflix of podcasting,” today, it all comes down to whether the consumer is willing to pay someone to organize free audio.
Don’t hold your breath.
Resume your regular breathing.
It is too early.