Pandora’s new Apple Watch app lets you leave your iPhone behind

Support for standalone streaming has come to Pandora’s Apple Watch app. The company today announced the official launch of its new standalone app for Apple Watch that lets you listen to music and podcasts on the go, even without your iPhone. The launch makes Pandora the first major third-party — meaning, first besides Apple Music — to offer a standalone app for Apple Watch.

To be clear, Pandora is not the first non-Apple music service to offer an Apple Watch app. Spotify notably debuted its own Watch app in 2018. Others, including SoundCloud, Napster, Deezer and more, also have Apple Watch experiences.

However, Spotify’s app still needs to be tethered to the iPhone in order to work. This has been a sore subject with a core group of Spotify’s customers — particularly those who want to enjoy music on their Apple Watch while exercising, for example, when carrying around an iPhone is more cumbersome. In some cases, these users have even defected to Apple Music, calling Spotify’s watch app a mere “remote control,” as it still hasn’t even implemented offline support. 

Pandora’s new app, on the other hand, lets users leave their phone behind as it supports both streaming and offline downloads.

The app notably takes advantage of the new streaming APIs Apple introduced last year at its annual developer conference. With watchOS 6, app developers can now create independent audio consumption experiences that no longer need to lean on the iPhone.

For Pandora, this change means users can go directly to the App Store on the Apple Watch to download the watch app to log in and start streaming. Even without an iPhone, users can play, pause and skip songs; pick up where they left off on podcasts; thumbs-up their favorite music; adjust the volume; and more.

Pandora Premium subscribers also can search and play specific songs, artists and albums on-demand, right from their wrist.

Meanwhile, offline listening is available to Pandora Plus or Premium paying subscribers, which lets you save tracks for offline play. This is helpful if you’re in an area where you have a poor connection or none at all, like on an airplane or underground train, for instance.

The new Pandora Apple Watch app will roll out to all users who already had the older version installed, as well as to those who updated to the latest version of Pandora’s iPhone app.

Because the app relies on Apple’s new streaming APIs to offer standalone streaming, it requires watchOS 6 to work. This version of Apple Watch software is available to Apple Watch Series 1 and higher users, but only those on Apple Watch Series 3 and higher will have access to standalone streaming, per Apple’s requirements. In addition, both streaming music and downloading require an internet connection, either Wi-Fi or cellular.

News of Pandora’s updated Watch app actually broke last week. But after a number of news reports announced its arrival, the company clarified it was only then rolled out to a small group (1%) of users at that time. Earlier this year, Pandora also rolled out a redesign of its Watch app that included offline playback.

As of today, the updated Apple Watch app should be available to all in the U.S.

SiriusXM and Pandora test bundle discounts

It’s been less than a year since SiriusXM completed its $3.5 billion acquisition of streaming music service Pandora, but the two companies have already leveraged their collective assets to boost each other’s services. For example, SiriusXM talk shows arrived on Pandora as podcasts, while a Pandora-powered station now streams popular songs for both sets of listeners. Now, the company is considering tying the two services together in a different way — by packaging them as a discounted bundle.

What that bundle deal will look like isn’t yet known.

Pandora today offers four tiers of service: a free ad-supported version, the $4.99/month Pandora Plus service, and the $9.99/month Spotify rival Pandora Premium. It also offers a multi-user Pandora Premium Family plan for $14.99/month.

SiriusXM, meanwhile, also offers its own set of packages, with the most popular being a $5/month plan for the car and home (via an Echo device), an $8.25/month plan for in and out of the car, and an $8/month plan for streaming outside the car only.

Before rolling out a bundle deal, the company wanted to know what sorts of package price points and features customers would respond to best.

The company confirmed it’s been testing different cross-promotions, including those aimed at both Pandora and SiriusXM subscribers that offered discounts if you sign up for the other service. Essentially, the company wants to know what price point makes sense for consumers when it comes to subscribing to both services.

Today, these cross-promotions are aimed only at people who already subscribe to one or the other service, so it’s not really being marketed as a “bundle” deal yet. It’s just a promotion, if you want to get technical about the terminology.

“We would email our Pandora listener base or the SiriusXM listener base — we would test it with different user bases as a promotion,” Chris Phillips, SiriusXM/Pandora Chief Product Officer & Head of Technology, told TechCrunch. “We actually have a formal study going on to do it,” he said.

SiriusXM and Pandora haven’t yet settled on what a potential bundle deal will look like, but it aims to make a decision based on its tests this year.

“The power of the Sirius brand and power of the Pandora brand are very distinct. And people see unique value in the two,” Phillips added.

One challenge, however, is that people don’t understand that SiriusXM and Pandora are now one company, so the promotional emails confused them.

Similarly, people often find the language around “Pandora-powered” stations in SiriusXM confusing, as well.

One potential solution is to pick one consumer-facing brand and merge assets, including both programming and apps.

When asked if the two apps may merge into one in the future, Phillips said the company is “looking at what those opportunities might be.”

In the meantime, the company continues to explore how it can enhance both products using assets it has from the respective products.

“We are cross-pollinating content and features…into the distinct [user interfaces],” he said.

A recent example of this includes a new button within the SiriusXM app that allows you to launch a Pandora station based on what you’re currently streaming. And this new Pandora-powered station can then play right in the SiriusXM app — you don’t have to launch Pandora separately to hear it.

Efforts like this are aided by the fact that SiriusXM immediately put the two companies’ development groups together following the acquisition.

“We’re giving listeners choice. But when we give them choice, we want them to be able to have the best of what we offer in many places,” noted Phillips, of these sorts of integrations. “In the future, the idea that there’s a single opportunity — we’re looking at what that might be,” he said.

Nothing is yet determined, so all these plans could change, of course.

SiriusXM ended 2019 with around 30 million self-pay satellite radio and a record high of 34.9 million total paid subscribers. In 2020, SiriusXM forecasts revenue of $8.1 billion and earnings of $2.5 billion (adjusted EBITA).

Combined, Pandora and SiriusXM reach 100 million U.S. listeners per month.

Instreamatic signs deals to allow people to talk to adverts on streaming services like an Alexa

Most in tech would agree that following the launch of Alexa and Google Home devices the ‘Voice Era’ is here. Voice assistant usage is at 3.3 billion right now; by 2020 half of all searches are expected to be done via voice. And with younger generations growing up on voice (55% of teens use voice search daily now), there’s no turning back.

As we’ve reported, the voice-based ad market will grow to $19 billion in the U.S. by 2022, growing the market share from the $17 billion audio ad market and the $57 billion programmatic ad market.

That means that voice shopping is also set to explode, with the volume of voice-based spending growing twenty-fold over the next few years due to voice-based virtual assistant penetration, as well as the rapid consumer adoption of home-based smart speakers, the expansion of smart homes and the growing integration of virtual assistants into cars.

That, combined with the popularity of digital media – streaming music, podcasts, etc – has created greenfield opportunities for better brand engagement through audio. But brands have struggled to catch up, and there has not been many ways to capitalise on this.

So a team of people who co-founded and worked at Zvuk, a leading music streaming service in Eastern Europe, quickly understood why there is not a single profitable music streaming company in the world: subscription rates are low and advertisers are not excited about audio ads, due to the measurement challenges and intrusive ad experience.

So, they decided to create SF-based company Instreamatic, a startup which allows people to talk at adverts they see and get an AI-driven voice response, just as you might talk to an Alexa device. 

Thus, the AI powering Instreamatic’s voice-driven ads can interpret and anticipate the intent of a user’s words (and do so in the user’s natural language, so robotic “yes” and “no” responses aren’t needed). That means Instreamatic enables brands which advertise through digital audio channels (streaming music apps, podcasts, etc) to now have interactive (and continuous) voice dialogues with consumers.

Yes, it means you can talk to an advert like it was an Alexa.
 
Instead of an audio ad playing to a listener as a one-way communication (like every T.V. and radio ad before it), brands can now reach and engage with consumers by having voice-interactive conversations. Brands using Instreamatic can also continue conversations with consumers across channels and audio publishers – so fresh ad content is tailored to the full history of each listener’s past engagements and responses.

An advantage of the platform is that people can use their voice to set their advertising preferences. So, when a person says ‘I don’t want to hear about it ever again,’ brands can optimize their marketing strategy either by stopping all remarketing campaigns across all digital media channels targeted to that person, or by optimizing the communication strategy to offer something else instead of the product that was rejected. If the listener expressed interest or no interest, Instreamatic would know that and tailor future ads to match past engagement – providing a continuous dialogue with the user.

Its competitor is AdsWizz which allows users to shake their phones when they are interested in an ad. This effectively allows users to “click” when the audio ad is playing in the background. One of their recent case studies reported that shaking provided 3.95% interaction rates.
 
By contrast, Instreamatic’s voice dialogue marketing platform allows people to talk to audio advertising, skipping irrelevant ads and engaging in interesting ones. Their recent case study claimed a much higher 13.2% voice engagement rate this way.
 
The business model is thus: when advertisers buy voice dialogue ads on its ad exchange, it takes a commission from that ad spend. Publishers, brands and adtech companies can license the technology and Instreamatic charges them a licensing fee based on usage.

Instreamatic has now partnered with Gaana, India’s largest music and content streaming service, to integrate Instreamatic into Gaana’s platform. It’s also partnered with Triton Digital, a service provider to the audio streaming and podcast industry.

This follows similar deals with Pandora, Jacapps, Airkast,
and SurferNETWORK.

All these partnerships means the company can now reach 120 million monthly active users in the United States, 30M in Europe and 150 million in Asia.

Thet company is headquartered in San Francisco and London with a development team in Moscow and features Stas Tushinskiy as CEO and co-founder. Tushinskiy reated the digital audio advertising market in Russia prior to relocating to the U.S. with Instreamatic. International Business Development head and co-founder Simon Dunlop previously founded Bookmate, a subscription-based reading and audiobook platform, and DITelegraph Moscow Tech Hub, and Zvuk.

Pandora launches interactive voice ads

Pandora has begun to test a new type of advertising format that allows listeners to respond to the ad by speaking aloud. In the new ads, listeners are prompted to say “yes” after the ad asks a question and a tone plays. The ads will then offer more information about the product or brand in question.

Debut advertisers testing the new format include Doritos, Ashley HomeStores, Unilever, Wendy’s, Turner Broadcasting, Comcast, and Nestle.

The ads begin by explaining what they are and how they’ll work. They then play a short and simple message followed by a question that listeners are supposed to respond to.

For example, the Wendy’s ad asks listeners if they’re hungry, and if they say “yes” the ad continues by offering a recommendation about what to eat. The DiGiorno’s pizza ad asks listeners to say “yes” to hear the punchline of a pizza-themed joke. The Ashely HomeStores ad engages listeners by offering tips on getting a better night’s sleep. And so on.

The new format capitalizes on Pandora’s underlying voice technology which also powers the app’s smart voice assistant, Voice Mode, launched earlier this year. While Voice Mode lets Pandora users control their music hands-free, the voice ads aim to get users to engage with the advertiser’s content hands-free, as opposed to tapping the on the screen or visiting a link to get more information.

The company believes these types of ads will be more meaningful as they force listeners to pay attention. For the brand advertisers, voice ads offer a way to more directly measure how many people an ad reached — something that’s not possible with traditional audio ads, which by their nature aren’t clickable.

Pandora announced its plans to test interactive voice ads back in April of this year, initially with San Francisco-based adtech company, Instreamatic. At the time, it said it would launch the new format into beta testing by Q4, as it now has.

The ad format arrives at a time when consumers have become more comfortable talking to digital voice assistants, like Siri, Alexa, and Google Assistant. There’s also an increased expectation that services we interact with will support voice commands — like when we’re speaking to Fire TV or Apple TV to find something to watch or asking Pandora or Spotify to play our favorite music.

But consumers’ appetite for interactive voice advertisements is still largely untested. Even Amazon limited voice ads on its Alexa platform for fear of alienating users who would find them disruptive to the core experience.

In Pandora’s case, however, users don’t have to play along. The company says if the user doesn’t respond within a couple of seconds or if they say no, the music resumes playback.

Pandora says the ads will begin running for a small subset of listeners using its app starting today.

 

Pandora puts its personalization powers to work in a revamped app

Pandora is doubling down on personalization and revamping its app in order to better compete with rivals like Spotify and Apple Music. Today, the company is introducing a new mobile experience which includes a dedicated “For You” tab where a continually updated feed of content is presented to users, including both music and podcast recommendations and more. This content is personalized to the individual, based on factors like the day of the week, the time of day, and Pandora’s predictions about your mood, among other things.

The new personalized feed will also help the company to better showcase more of its exclusive content — like its music-and-podcast combos, called “Pandora Stories,” for example. Or the dozens of SiriusXM talk shows that became Pandora podcasts, following its acquisition.

“Our listeners have told us that they love the utility of Pandora — it’s drop-dead easy, it works, it knows me, It’s really simple,” explains Pandora’s Chief Product Officer, Chris Phillips. “But what they haven’t been able to understand and have easy enough access to is all the content and programming that we have available on Pandora — the new content, new programming, and the unique content that you can’t get other places,” he says.

The For You tab aims to change that by turning Pandora’s personalization capabilities onto its broader catalog and exclusives, then crafting a scrollable feed with dozens of ways to listen.

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Here, you’ll be able to tap into Pandora Modes,  for example, which is a new way to listen to Pandora Stations. The feature was previously available on the web, and has now come to mobile for the first time with today’s launch.

Pandora Modes let you toggle between ways to customize your stations. You can opt for modes that will tweak the station to play things like the most popular songs (“crowd faves”), the deep cuts, new releases, artist-only tracks, and more.  You can also opt for a “discovery” mode to have Pandora introduce you to new artists you may like, as related to the station in question.

Another section in the For You tab lets you browse by categories, including by genre, by new music, podcasts, moods, playlists, decades and by trending.

The “Moods & Activities” section, meanwhile, will present collections of music based on current trends — for example, one of the available “moods” is “fall” and another could be “rainy day,” matched up with the day’s weather. You can also dig into this section for moods to match your activity, like workout, gaming, studying, family time, and more.

As you scroll down the For You page, you’ll come across your podcast recommendations and personalized playlists. And Pandora can create some 80 different versions of the latter, which include playlists by moods, activities, genres, and more all powered by its Music Genome.

Plus, the combined Pandora and SiriusXM editorial team of around 25 creates hundreds of human-curated playlists, too.

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In total, there are some 35 different modules in Pandora’s new For You feed, some of which are shown to every user while others appear dynamically based on time of day and day of week. Its suggestions will also be tailored to your own likes and interests, thanks to your own listening behavior and explicit signals, like thumbs up and thumbs down.

That means your For You tab will be unique to you, and you can later be targeted with specific promotions — like the content to emerge from that deal between SiriusXM/Pandora and Drake, for example, if relevant to your interests. (Hey, it’s better than that time when Spotify put Drake’s face on every playlist.)

Despite the personalization, the feed will still include some insights powered by the larger Pandora population, so you can see what’s popular and trending more broadly across the service.

In time, Pandora plans to roll out even more modules to build out the experience further.

100 billion thumbs are what’s powering all this,” adds Phillips, speaking of Pandora’s recent milestone, which measured the number of thumbs up and down clicks from users. Until now, he says, Pandora “hadn’t really brought together the community…and the power of our personalization, but not just for stations — for all the playlists, albums, songs, and artists,” Phillips continues. “And then the idea that we lay on top of all of this…the idea of what time of day it is, and what might be interesting based on what we predict your mood is right now,” he says.

The “For You” tab and other features are arriving today on Pandora for iOS and Android.

How Kobalt is betting on music’s middle class and DIY stars

Streaming services have made music ubiquitous, driving more exploration by consumers who don’t have to pay for each song or album individually. Musicians are correspondingly able to find their own niche of fans scattered around the world.

(This is the third installment of our EC-1 series on Kobalt Music Group and changes in the music industry. Read Part I and Part II.)

As Spotify gained rapid adoption in his native Sweden in 2006, class="crunchbase-link" href="https://crunchbase.com/organization/kobalt-music-group" target="_blank" data-type="organization" data-entity="kobalt-music-group">Kobalt’s founder & CEO Willard Ahdritz predicted music streaming and the rise of social media would increasingly undercut the gatekeeping power of the major label groups and realign the market to center more on a vast landscape of niche musicians than a handful of traditional superstars.

Both of these predictions have proven directionally true. The question is to what extent and how are industry players actually realigning as a result?

What musicians need in addition to the administrative collection of their royalties (explained in Part II) is a menu of creative services they can tap for support. Kobalt’s AWAL and Kobalt Music Publishing divisions provide such services to recording artists and songwriters, respectively, and do so on purely a services basis (getting paid a commission but not taking ownership of copyrights like traditional labels and publishers do).

Niche middle class vs. Global superstars

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Image via Getty Images / rolfo eclaire

The whole music industry is growing substantially due to streaming music’s mainstream penetration in wealthier countries and increased penetration in emerging markets.

As the overall pie is growing, the non-superstar segment of the market is indeed growing faster than the superstar segment, taking over a larger portion of industry royalties.

According to data from BuzzAngle, the top 500 songs in the US in 2018 accounted for 10% of on-demand audio streams — a dramatic decline in market share compared to 2017 when the top 500 songs accounted for 14% of streams. Stepping back, the top 50,000 songs made up 73.2% of all US streams in 2017 but that declined to 70.5% in 2018.

Pandora debuts a desktop app for Windows with support for music & podcasts

Pandora today is launching a desktop app for Windows users following its debut of a native Mac app earlier this year. On Mac, Pandora offers a variety of features for desktop users like on-screen notifications, keyboard controls, and a way to select listening “modes” and more. It didn’t, however, include support for streaming podcasts. The new Windows app includes a similar feature set, and adds support for podcast streaming.

Like its Mac counterpart, Pandora’s Windows app can be used by both free users and paid subscribers alike.

The free users will have access to Pandora’s ad-supported stations, while Pandora Plus subscribers get ad-free stations, unlimited skips, personalized stations, and up to four offline stations. Pandora Premium subscribers, meanwhile, get the same, plus the ability to make and share playlists, play albums and songs on-demand, and take advantage of unlimited offline listening.

Both of the paid subscription tiers can also stream podcasts via the Windows app.

Also like the Mac app, the Windows version supports keyboard controls for doing things like playing, pausing, replaying, shuffling, thumbs up and down, etc. And it supports the Pandora Modes feature which lets you refine your personalized stations by asking Pandora to focus more on certain types of songs — like crowd favorites, the discovery of new artists, deep cuts, songs from a select artist only, new releases, and more.

Desktop users often prefer to use a native app instead of leaving a service open in a browser tab as it allows them a more seamless and integrated experience. That said, Pandora’s Mac version didn’t have the best reviews from Apple users.

Still, Pandora’s rollout of native desktop apps helps the SiriusXM-owned company better compete with rivals like Apple Music and Spotify, both of which have long offered desktop applications. In Apple’s case, it actually built so much into iTunes, that the company decided to finally break it up into parts with the next version of macOS. Pandora doesn’t have the same problem because it doesn’t include a user library or marketplace.

Windows users can download the Pandora app from the Microsoft Store starting today.

The app works on Windows 10. (Pandora also supports streaming to Xbox via the Microsoft Store app.)

How Kobalt is simplifying the killer complexities of the music industry

Backed by over $200 million in VC funding, Kobalt is changing the way the music industry does business and putting more money into musicians’ pockets in the process.

In Part I of this series, I walked through the company’s founding story and its overall structure. There are two core theses that Kobalt bet on: 1) that the shift to digital music could transform the way royalties are tracked and paid, and 2) that music streaming will empower a growing middle class of DIY musicians who find success across countless niches.

This article focuses on the complex way royalties flow through the industry and how Kobalt is restructuring that process (while Part III will focus on music’s middle class). The music industry runs on copyright administration and royalty collections. If the system breaks — if people lose track of where songs are being played and who is owed how much in royalties — everything halts.

Kobalt is as much a compliance tech company as it is a music company: it has built a quasi “operating system” to more accurately and quickly handle this using software and a centralized approach to collections, upending a broken, inefficient system so everything can run more smoothly and predictably on top of it. The big question is whether it can maintain its initial lead in doing this, however.

The business of a song

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Image via Getty Images / Mykyta Dolmatov

Pandora now lets you share music and podcasts to your Instagram Stories

Pandora today announced a new integration with Instagram that will allow users to share to their Instagram Story their favorite music and podcasts. The feature comes well over a year after Spotify launched a similar integration with Instagram Stories, and only days after Spotify introduced sharing to Facebook Stories, as well.

In Pandora’s case, accessing the feature is also a quick and easy process — you just tap the “Share” button from the Now Playing screen in the app, then choose “Instagram Stories” as the destination.

A cover art card for the music or podcast will then be generated on your Instagram Story, which you can further decorate with text and stickers, as usual. You also can choose to send the story as a direct message to a friend or a group chat instead of all your followers.

Where Pandora’s experience differs from Spotify’s is what happens when that story is viewed.

When a friend taps the “Play on Pandora” button from the Instagram story, they can gain direct access to that content — even if they don’t have a Premium account. Those who aren’t paid subscribers will be able to view a short ad then gain access to both the shared content as well as a session of free, unlimited, on-demand music.

This is made possible through Pandora’s Premium Access ad solution, which rewards users with free, on-demand sessions for watching video ads.

That means Pandora’s take on Instagram sharing won’t just be useful to artists looking to promote their music, or fans looking to engage their friends — it also will potentially serve as a way to convert free users to paid subscribers after they get a free taste of what Pandora has to offer.

The feature also can be used to promote podcasts, which is a newer battleground between Spotify and Pandora these days. The former has spent on acquisitions and hosts a number of exclusive shows while Pandora is now benefiting from (new owner) SiriusXM’s talk radio programming and its own “Genome” classification technology. 

Pandora says the Instagram Story-sharing feature is launching today for select users, and will support sharing songs, albums, podcasts and playlists.

It’s rolling out to a limited number of Pandora users to start, and will gradually reach the rest of the user base in the weeks ahead.

After a breakout year, looking ahead to the future of podcasting

2019 has been a breakout year for podcasting. According to Edison Research’s Infinite Dial report, more than half of Americans have now listened to a podcast, and an estimated 32% listen monthly (up from 26% last year). This is the largest yearly increase since this data started being tracked in 2008. Podcast creation also continues to grow, with more than 700,000 podcasts and 29 million podcast episodes, up 27% from last year.

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Thanks to this growing listener base, big companies are finally starting to pay attention to the space — Spotify plans to spend $500M on acquisitions this year, and already acquired content studio Gimlet, tech platform Anchor, and true crime network Parcast for a combined $400M. In the past week, Google added playable podcasts to search results, Spotify released an analytics dashboard for podcasters, and Pandora launched a tool for podcasters to submit their shows.

We’ve been going to Podcast Movement, the largest annual industry conference, for three years, and have watched the conference grow along with the industry — reaching 3,000 attendees in 2019. Given the increased buzz around the space, we were expecting this year’s conference to have a new level of energy and professionalism, and we weren’t disappointed. We’ve summarized five top takeaways from the conference, from why podcast ads are hard to scale to why so many celebrities are launching their own shows.

Rise of celebrity podcasters boosts listenership

We’ve officially entered the age of celebrity podcasters. After early successes like WTF with Marc Maron (2009), Alec Baldwin’s Here’s The Thing (2011), and Anna Faris’ Unqualified (2015), top talent is flooding into the space. In 2017, 15% of Apple’s href=""https://www.allaccess.com/net-news/archive/story/172268/apple-podcasts-charts-top-20-most-downloaded-podca"> top 20 most-downloaded podcasts of the year were hosted by celebrities or influencers — this jumped to 32% of the top 25 in 2018. And of all the new shows that launched in 2018, 48% of the top 25 were celebrity-hosted.

Screen Shot 2019 08 21 at 1.21.50 PMThough podcasts are undermonetized compared to other forms of media, talent agents now consider them to be an important part of a well-rounded content strategy. Dan Ferris from CAA tells his clients to think of podcasting as a way of connecting with fans that is “much more intimate than social media.” Podcasts also help celebrities find a new audience. Ben Davis from WME said that while his client David Dobrik has a smaller audience on his podcast than on YouTube (1.5M downloads per episode versus 6M views per video), the podcast helps him reach a new group of listeners who stumble upon his show on the Apple Podcast charts.

While some podcast veterans grumble about the rise of celebrity talk shows, famous podcasters are good for the industry as a whole. Advertisers are drawn to the space by the opportunity to get to access A-list talent at lower prices. One recent example is Endeavor Audio’s fiction show Blackout, which starred Rami Malek, who was fresh off an Oscar win. Endeavor’s head of sales Charlie Emerson said brands might have to sign a “seven or eight figure deal” to advertise alongside Malek’s content in other forms of media. Other podcasters also benefit from new listeners brought into the medium by their favorite stars — a Westwood One survey in fall 2018 found that 60% of podcast listeners report discovering shows via social media, where celebrities and influencers have huge existing audiences to push content to.

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Creator backlash against “walled garden” apps

Paid listening apps represent a fairly small percentage of podcast listenership, with production platform Anchor estimating that Apple Podcasts and Spotify control more than 70% of listenership. A venture-backed company called Luminary is trying to change this — it raised $100M to launch a “Netflix for podcasts” this spring. Consumers pay $7.99/month to access Luminary-exclusive shows alongside podcasts that are free on other apps. Because podcasts have RSS feeds, distributors like Luminary can easily grab free content and put it behind a paywall. The platform, not the creator, benefits from this monetization.

Within days of Luminary’s launch, prominent podcasters and media companies (The New York Times, Gimlet, and more) requested their shows be removed from the app. It’s interesting to note that YouTube has a similar premium plan — for $11.99/month, users can access and download ad-free videos. Unlike Luminary, however, YouTube, pays creators a cut of the revenue from these subscriptions based on how frequently their content is viewed.

Unsurprisingly, creator sentiment is more positive toward platforms like Spotify and Pandora . Though these companies do make money from premium subscribers who listen to podcasts, creators can choose whether or not to submit their shows. And podcasters benefit from making their shows discoverable to the existing user base of these platforms, which already dominate “earshare.” Spotify alone has 232 million MAUs, which dwarfs the 90 million people in the U.S. who listen to a podcast monthly.

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Industry anxiety around maintaining quality at scale

Podcast ad revenue has been scaling quickly, with $480M in spend last year and a projected $680M this year. Over the past four years, ad revenue has scaled at a 65% CAGR, and this growth is expected to continue. In its early days, the podcast ad market was largely been driven by D2C brands — you’ve probably heard hundreds of Casper, Blue Apron, and Madison Reed ads. However, bigger brands are also starting to enter podcasting (Geico, Capital One, and Progressive made the top 10 list for June 2019) due to the growing audience scale and increased precision around targeting and attribution.

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While many attendees were excited by the massive growth in ad revenue, others worried that it may kill what makes podcasting special. They’re particularly concerned that podcasts may go the way of online video, with annoying, generic, low CPM ads. Podcast hosts typically read their own ads, and are often true fans of the product — they share personal stories instead of reciting brand talking points. This results in premium CPMs compared to most digital media — AdvertiseCast’s 2019 survey found an average CPM of $18 for a 30-second podcast ad and $25 for a 60-second ad, more than 2x the average CPM on other digital platforms.

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While these ads are effective, they’re time-consuming and expensive to produce. Big brands interested in podcast ads often expect to reuse radio spots — they aren’t used to the process of crafting and approving a host-read ad that may only reach 10,000 listeners. Podcasters, meanwhile, value their trust with listeners and don’t want to spam them with loud, unoriginal radio ads. The tension between maintaining the quality of ads while scaling quantity was an underlying theme of most monetization discussions, and industry veterans disagree on how it will play out.

Podcasts are still undermonetized — but there is hope!

Despite the growth in ad revenue and relatively high CPMs, the industry is significantly undermonetized. Using data from Nielsen, IAB, and Edison, we calculated that podcasts monetize through advertisements at only $0.01 per listener hour — less than ten times the rate of radio. Podcast monetization per listener hour has increased over the past year, up 25% by our calculations, but still substantially lags all other forms of media.

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Why are podcasts so undermonetized? Unlike many other forms of media, the dominant distribution platform (Apple Podcasts) has no ad marketplace. Creators have historically had to approach brands themselves or sign with podcast networks to construct custom ad deals, and the “long tail” of podcasters were unable to monetize. This is finally changing. Anchor, which reported in January that it powers 40% of new podcasts, has an ad marketplace that has doubled the number of podcasts that are running ads. Other popular platforms like Radio Public have launched programs for small podcasters to opt-in to ad placements.

The second major hurdle in monetization is attribution. Podcasts have historically monetized through direct response campaigns — a podcaster provides a special URL or promo code for listeners to use when making a purchase. However, many people listen to podcasts when exercising or driving, and can’t write down the promo code or visit the URL immediately. These listeners might remember the product and make a purchase later, but the podcaster won’t get the attribution. Thomas Mancusi of Audioboom estimated that this happens in 50–60% of purchases driven by podcast ads.

Startups are trying to bring better adtech into podcasting to fix this issue.Chartable is one example — the company installs trackers to match a listener’s IP address with a purchaser’s IP address, allowing podcasters to claim attribution for listeners who don’t use their URL or promo code. Chartable currently runs on 10,000 shows, and the early results are so promising that ad agencies expect to see higher CPMs and significantly more spend in the space.

Podcast fans of the future ≠ podcast fans today

As podcasting grows, the listener base is diversifying. Edison Research looked into data on “rookie” listeners (listening for six months or less) and “veteran” listeners (listening for 3+ years), and found significant demographic differences. Only 37% of veterans are female, compared to 53% of rookies. While the plurality of veterans (43%) are age 35–54, 54% of rookies are age 12–34. Rookies are also 1.6x more likely to say they most often listen to podcasts on Spotify, Pandora, or SoundCloud (43% versus 27% of veterans). And social media is an important way that rookies discover podcasts — 52% have found a podcast from video and 46% from audio on social media, compared to 41% and 37% for veterans.

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These new listeners will have a profound impact on the future of podcasting, in both the type of content produced and the way it’s distributed. Industry experts are already noting significant new demand for female-hosted podcasts, as well as audio dramas that appeal to young people looking for a fast-paced, suspenseful story. They’re advising podcasters to share clips of their content on social media, and to leverage broader listening platforms like YouTube and Soundcloud for distribution.

International markets also represent an enormous opportunity for growth. Most podcast listeners today live in the U.S. or China, but content producers are starting to see significant demand elsewhere. Castbox’s Valentina Kaledina said that many fans abroad have resorted to listening in their non-native language, with the top 100 shows in each country comprising a mix of English and local language. Adonde Media’s Martina Castro, who recently conducted the first listener survey on Spanish-language podcast fans, said that 53% of the survey’s 2100 respondents reported listening to podcasts in English — and only 20% of them use Apple Podcasts.

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Larger podcast producers are beginning to translate shows for non-English-speaking markets. Wondery CEO Hernan Lopez announced at the conference that the company’s hit show Dr. Death is now available in seven languages. Lopez noted that it was an expensive process, and he doesn’t expect the shows to generate profit in the near future. However, he believes that Wondery will eventually see a significant return from investing in the development of new podcast markets — and if they do, other podcast companies will likely follow in their footsteps.