Three podcast market trends to watch in 2023
All of entertainment is facing new challenges in the recession. Both creators and platforms are doing everything they can to keep audiences as entertainment spending is at risk. While audio platforms have already seen notable cuts to programming, podcasts are exploring new ways to expand the format to new audiences. Here are three shifts to watch in the coming year:
1. Moving beyond podcast ads
Advertising revenue is a core part of the business for both podcast streaming platforms and creators. However, ads are also one of the biggest sources of friction, resulting in creators and listeners steadily finding ways to remove ads from their content. The podcasting industry must either make advertising work as a true value exchange — rather than simply a source of friction — or find new ways to drive revenue beyond advertising as economic realities cut advertising budgets.
Podcast subscriptions let paying listeners experience their favourite shows ad-free, but this model may struggle to reach mainstream adoption. Apple expanded subscriptions by creating subscription channels for entire podcast networks that consumers might see as a better value proposition than subscribing to individual shows. Amazon Prime has differentiated its podcast service by going ad-free, integrating ad-free podcasts as a perk of a $9.99 monthly subscription that also includes shopping, video streaming, and music. Finally, the complexity of the podcast market value chain may make transforming the ad business challenging. Unlike video and music streaming content, creating a paid podcast tier that removes ads is not as simple for streaming platforms, as many creators use a third-party hosting site to input ads before the podcast arrives on the streaming platform. Unless the show is a platform original, it is currently difficult for platforms to have a say in how a creator incorporates ads.
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2. Enhanced listener experience and blurring format lines
Podcasting is a clunky experience for consumers: Oversaturation makes it difficult to navigate and discover podcasts as most are a lengthy time commitment and growth relies on habitual listening. However, they have already started to evolve with Spotify’s introduction of Q&A’s and polls so listeners can interact with podcast hosts. In 2023, expect to see more innovations that improve the listener experience. For example, Spotify is rolling out podcast chapters and timestamps (like YouTube) that allow listeners to easily navigate a podcast to identify key content points. With this addition, the question of differentiation between a podcast and audiobook still lingers. Spotify recently attempted to combine the two mediums into a “Bookcast” that saw James Patterson and Dolly Parton take on their exclusive novel in the podcast format. For consumers, the line between the two formats will continue to blur, and both can benefit by potentially growing together.
3. Podcast videos are opening doors
Speaking of blurring lines, podcast videos are introducing audio content to new audiences and helping podcast creators win in the attention recession. As 22% of consumers watch video podcasts monthly, this format is quickly growing out of niche penetration (Source: MIDiA Research consumer survey Q3 2022) and across platforms. For instance, Spotify and its upcoming deal with former YouTube star Emma Chamberlain includes video podcasts. Moreover, podcasters can utilise clips on video based social media platforms, such as TikTok, to find new audiences. Videos are becoming an essential marketing tool that podcasts need to utilise to reach mainstream listeners, and platforms offering video capabilities may be better positioned to attract creators than others.
The rapidly developing entertainment market is being shaken by recessionary spending constraints and the growing importance of social promotion. While platforms scramble to mould themselves to benefit users of all varieties, those that encourage cross-platform content sharing while adding additional value to their own subscription services will be best set to take on 2023.
Look out for MIDiA’s upcoming audio report on how video will transform the podcast market, out next month.