Over 15 years after the term was coined, podcasts are experiencing an explosion in growth. This may seem like a step backward, especially in an age where content creators are churning out high production value videos, but there are various reasons as to why the podcast format is making a comeback.
Like radio scripts, the goal of podcasts is to engage. The difference lies in technique – podcasts often borrow narrative storytelling techniques from movies and television to flesh out content, while radio scripts rely heavily on a conversational style. Podcasts are also generally written to be consumed individually, which turns listening into an active process and creates an intimate atmosphere that radio lacks. This builds a relationship between the listener and the host, encouraging listeners to tune in regularly.
On top of that, podcasts have a lower barrier of entry as compared to radio stations, which means that there is a podcast out there for every niche interest imaginable. The flexible and immersive nature of podcast content makes it an alternative on-the-go entertainment source to many audio and even visual formats, sans the screen time.
We discuss podcasts and audio-entertainment with Joseph Phua from Turn Capital
Commercial publishers are already deriving significant revenue from podcasts, especially in the United States. The New York Times reaches 2 million listeners everyday with their podcast arm The Daily. Over half of online magazine Slate’s total revenue comes from podcasts. Podcasts are even beating radio- the NPR forecasts $55m in podcasting earnings next year, overtaking radio sponsorship income.
New platforms are shaking up the podcast market with new ideas and deeper pockets. According to a report published in December 2019, Apple accounts for the majority of podcast use, Spotify has doubled its market share in the last year with Netflix-type subscription payment models, acquisition of exclusive content and paid in-house content providers commissioning original content.
What about Asia?
While the adoption pattern in Asia has yet to be studied in depth, it is safe to say that the podcast industry in Asia is still in its nascent stages, but is slowly gaining traction in the market. As Spotify and Apple make huge forays into the space, it is expected that Asia will catch the podcast bug sooner rather than later.
The rise of the podcast industry in Asia is visible from the success of Taiwan-based podcasting platform Soundon, which focuses on original content from Asia. Holding over 70% of the market share, SoundOn collaborates with more than 10,000 active podcast programs and podcasters.
The pace of the startup’s growth is in line with the growth of YouTube during its initial popularity in Taiwan. Just a year after the business was founded in late 2019, Soundon achieved a 20 times growth in traffic and garnered over 35 million downloads a month. SoundOn is projected to hit 500 million downloads a month this year. Compared to more mature podcast industries such as the US, Taiwan has essentially fast-forwarded growth of five years and condensed it into one year.
Following the footsteps of international giants, SoundOn produces its own original content shows featuring some of Taiwan’s top influencers. With Taiwan’s robust influencer scene, these podcasts have been wildly popular with the local audience, with a few mainstays in the top podcast rankings within the market. The podcast platform has also established itself as a monopoly with its own podcast player app and website, which has been the go-to source for discovering new podcasts in the Taiwanese market.
Due to its popularity, SoundOn possesses the most complete podcast database in the Taiwan market, and has in turn expanded into a robust advertising platform that connects podcasters to advertisers, allowing them to retain podcasters as well as listeners.
Advertisers prefer to work with SoundOn due to the ability for SoundOn to quickly scan and filter thousands of podcasts by volume, gender breakdown, and demographic. Instead of having to sift through hundreds of podcasts, advertisers can get pricing, statistics and recommendations all in one from SoundOn. We also expect SoundOn to experience exponential growth in its revenue and profitability in the next 24 months.
Soon, there will be additional business models that can be adopted, such as subscriptions, donations, merchandising, as SoundOn continues to build upon its app into other audio-related mediums, such as live content, audiobooks, and others.
Predictions for Southeast Asia
Following Soundon in Taiwan, the Southeast Asia podcast industry can expect the same trend of high growth. With an increasing number of investors venturing into the space, there might also be a significant number of podcasting ventures popping up soon.
One striking feature of the podcasting scene in the United States is the strength of local podcast production companies such as Gimlet, Stitcher, and Wondery. These studios monopolise the industry, with only 7% of the top 200 shows being non-domestic. The strong local competition creates high barriers of entry in the market.
Podcast winners in Southeast Asia will undoubtedly be local, but for a different reason. The homogeneity of the English-speaking United States market is a stark contrast to the heterogeneous and diverse countries like France, where 87% of the trending podcasts in France are locally produced. Moreover, audio is less versatile due to the lack of subtitles.
In Southeast Asian countries where English is not the native tongue, The dominance of a language in the region will influence its popularity. It is likely that domestic podcast scenes will grow even stronger than the US market and the popularity of US podcasts are predicted to decline in the region.
Content-wise, it is unclear what audio content format works best, but winning formats will evolve to consumer trends before consumer trends will fit into winning formats.
Currently, narrative formats are popular, with people turning to podcasts for daily news, entertainment and inspiration. As podcasts gain traction among working professionals and busy students, listeners will often be on the go. This could explain why 5-10 minute short-form podcasts, or microcasts, are on the rise. In the age of productivity, microcasts cut out the unnecessary chit-chat and are packed with quality content that will enrich listeners’ workout routine, morning commute or grocery runs.
Southeast Asian arts, culture and travel podcasts also have the potential to be met with success in foreign markets. As 3 in 4 podcast listeners in the US turn to podcasts for education, authentic local insights and experiences from Southeast Asia will definitely appeal to culture geeks across the globe.
Video killed the radio star, and it is inevitable that people will default to just one or two products for their audio needs. Podcasts may be in now due to forward-thinking investors, but attention spans have never been shorter. Producers will have to adapt to constantly changing consumer trends to remain competitive, but with an intimate format that breeds active listening, podcasts seem to have anchored itself in the media landscape for now.
This article was contributed by Joseph Phua, co-founder and Non-Executive Chairman of 17LIVE Inc
About the author
Joseph Phua, Co-Founder and Non-Executive Chairman of 17LIVE Inc., led the merger of Paktor, the leading regional dating group, and 17 Media, the global leader in live streaming to form M17 Group (now 17LIVE Inc.) in 2017.
Joseph co-founded Paktor in 2013 while completing his M.B.A., and served as CEO of Paktor from 2013 to 2017, and CEO of M17 Group from 2017 to 2020. Joseph previously held positions in the consulting and banking industries, at McKinsey & Company and Citigroup, and spent a few years in luxury retail with Da Vinci Asia, based in Shanghai and Beijing, China, from 2008 to 2011, where he oversaw nationwide operations for the company’s fine watch and jewelry businesses. Joseph holds an M.B.A. degree from the University of Chicago Booth School of Business and a Bachelor of Science in Finance from the Leonard N. Stern School of Business, New York University.
Turn Capital was established in 2020 as the family office of Joseph. Turn Capital seeks to invest in and/or acquire companies across stages, supporting founders and management with its operational expertise, together with its venture and private equity partners. Ticket sizes range from US$500k from venture investments, to >US$10m for private equity investments.