Wednesday, November 30, 2005
AUDIO: Will NPR's podcasts birth a new business model for public radio?
URL: http://www.ojr.org/ojr/stories/051129glaser/
Posted: 2005-11-29
Will NPR's podcasts birth a new business model for public radio?
How the public radio giant has become a leading podcaster in just two months.
By Mark Glaser
Online Journalism Review
Last summer, the folks running National Public Radio started to get a clear
message from their listeners and member stations: Give us podcasts! They
received e-mail requests from listeners for months, and the term "podcast"
was one of the most searched terms on NPR.org. The public spoke, and NPR
listened, launching podcasts on Aug. 31.
Talk about pent-up demand. According to Maria Thomas, vice president and
general manager of NPR Online, it took only six days after launch for NPR's
"Story of the Day" podcast to reach the coveted No. 1 spot on iTunes for
most downloaded podcast. On Nov. 21, NPR's podcasts held down 11 spots on
the iTunes Top 100, more than any other media outlet.
But NPR has done much more than simply repurpose its own material for
podcasts. The radio giant is hosting podcasts for member stations, and
selling and splitting underwriting revenues with them. Plus, it's launched
three original podcasts under the new alt.NPR brand as an incubator for
edgier content.
In a wide-ranging interview on NPR's podcasting initiatives, Thomas told me
that there were two driving forces for NPR: listener demand for portable
audio, and the chance to find a new business model for working with
stations. Previously, NPR's income was split evenly from fees paid for
content by member stations (who raised money from pledge drives), and
corporate and foundation underwriting spots. Podcasting gave NPR a new model
for selling underwriting, and sharing the proceeds with stations.
"We are actually working with a subset of stations that are providing audio
to us, and we're organizing that audio in a central database, so we can put
consistent inventory units around the audio," Thomas said. "And we would
sell those inventory units to underwriters, and if we are successful with
that, we would share that revenue with the stations. That's a different
model than what we have on the radio. The whole principle is that we'll have
to act differently on these new platforms because the model we have on the
radio might not work in this world -- but we have to be in this world." At
launch, NPR already had sold underwriting to Acura as a premier podcasting
sponsor.
So what makes NPR's podcasting a different animal? Rather than just offering
podcasts of entire NPR radio shows, the most popular NPR podcasts have been
"best of"-type offerings by topic. For instance, podcasts such as NPR
Movies, NPR Technology and NPR Music take content from various radio shows
on the same topic. That way, it's easier to sell to underwriters interested
in a particular topic.
On the news side, NPR has had success with its nightly podcast wrap-up of
hearings on the John Roberts Supreme Court nomination, and will repeat that
with the upcoming Samuel Alito hearings in January. The NPR podcast
directory now includes 174 podcasts (including those of member stations).
Thomas says the original 17 podcasts it offered from the start have been
downloaded more than 5 million times.
The importance of original content
While a lot of Big Media companies have jumped on the podcasting bandwagon,
much of the content is simply repurposed material from offline programming.
While NPR has done that with most of its podcasts, the alt.NPR brand is a
chance for NPR to look beyond the usual fare. The first three offerings for
alt.NPR include a commentary on the gambling world by NPR reporter Mike
Pesca, downtempo electronica music from independent Net radio station
SomaFM, and a selection of the best young public radio producers on Public
Radio Exchange (PRX.org) called "Youthcast."
These three mark different approaches to podcasts for NPR -- one being from
an in-house reporter, one being an exploration of new music, and another
taken from PRX, which has worked with NPR before. SomaFM receives a
freelance production fee from NPR.org, while PRX will share revenues from
underwriting that NPR sells. Thomas considers this as an experiment for NPR,
which will release more podcasts after it gauges the success of its attempts
so far.
"If we're going to make it on the portable platform, we have to act
differently," Thomas said. "With podcasting, we're acting like producers and
seeking new voices but at the same time we're working cooperatively with
stations to find a way to help all public radio become more meaningful,
which is something we didn't accomplish in the first 10 years of the
Internet."
So what type of content works best for podcast listeners? Thomas believes
that shorter content has been more popular, perhaps because people listening
to podcasts are multitasking and don't have the attention for long-form
content. A case in point is the "Story of the Day" podcast, which runs from
four to eight minutes, highlighting the editorial pick from NPR as the most
important and unique story that NPR produced that day. Because it has
occupied the No. 1 slot at iTunes for so long, Thomas believes it might be
the most downloaded podcast ever.
Kris Jacob is vice president of business development for PodShow, the
venture capital-backed startup from "podfather" Adam Curry, which is
aggregating podcasts into an ad network. Jacob told me that repurposed
mainstream content might bring in a larger podcast audience of consumers,
but that podcast listeners in general like the close bond they feel with
independent productions.
"The fundamental mistake that media companies, large and small, make is that
they adopt the model but not the philosophy," Jacob said. "They look at
things as the adjunct to the core product that they're providing, and not as
a fundamental shift in the way that they are creating media itself. ... What
listeners tell us is that mainstream programming converted to MP3 files and
redistributed and called a podcast is interesting to a point, but it's not
what they are really compelled by. What they are compelled by is unique
independent niche programming that appeals to them and allows them to
develop a relationship that they can't forge with mainstream programming."
Rusty Hodge, SomaFM's founder and general manager, agreed that shovelware
wouldn't cut it for podcasts, and that the democratizing effect of so many
new voices emerging was much more important.
"The most interesting content on the Internet has not been repurposed
content from somewhere else (which we've all heard already), it will be that
content that didn't have an outlet before," Hodge said via e-mail. "I think
that NPR is using the alt.NPR podcast project as an incubator, to try out
new content and explore areas that they don't have the space to do over the
air."
PRX has been running its own podcasts culled from all the radio pieces
people submit to PRX. (PRX acts as a non-profit intermediator between
independent producers and public radio stations and networks.) Plus, it
released Pubcatcher, a free podcast tool for public radio stations to use on
their sites. Jake Shapiro, executive director of PRX, told me that
podcasting might bring a new generation of talent into public radio.
"I have high hopes that out of this wave of energy around podcasting, with
all of these people trying to become audio producers, that a bunch of them
will emerge as truly talented new voices that will bridge into radio,"
Shapiro said. "It doesn't have to be either/or [podcasting or broadcasting].
My hope is that podcasting does identify a whole new rising generation that
is producing a different sound with different ears and that public radio
will embrace them."
The challenges and potential of podcast ads
As for making money or getting underwriting for podcasts, everyone agrees
that there are a slew of issues to iron out -- though there's a lot of
potential. First off, anyone who sells advertising usually has to have
metrics on the audience: who is listening, how often do they listen, what's
the demographic of listeners. These remain a mystery for podcasts, because
there is no current way to track who actually listens to podcasts. Just
because you subscribe to a podcast, doesn't mean you upload it to your MP3
player or listen to it.
NPR.org's Thomas admits that this is an initial problem, but she said she
hopes to get listener information when technology companies can solve the
metrics issue, as long as it doesn't invade personal privacy.
Along with the measurement dilemma, there's also bandwidth costs to
consider. The more popular your podcast is, the more it costs to support
downloads. Thomas says NPR.org has already been serving streaming audio for
some time, so it could negotiate good bandwidth deals with vendors.
"We went into this business with eyes wide open because we've been streaming
audio -- lots of it -- on NPR.org for nearly a decade," Thomas said. "We did
a lot of work upfront, pushed hard on vendors and [did] estimating and
scenario planning. Frankly it helped shape our content offerings. We're
keeping it shorter not just for the user experience. I'm not at all
convinced someone wants to listen to two hours of 'Morning Edition' on an
iPod. You're penalized for success, but we're trying to build an
infrastructure that supports a business."
Another issue is the intrusiveness of ads on podcasts, a medium born out of
people's frustration with the ad-saturated nature of broadcast radio. So
far, most podcasts have toned down the commercialism, and tried to use more
low-key sponsorships and spots voiced by the host. NPR has an advantage
because it is already well versed in using less intrusive ads in its radio
and Web programming.
Thomas told me NPR would only do one "gateway" sponsor ad for 12 to 15
seconds at the beginning of podcasts, along with a three-second closer at
the end. For podcasts less than 30 minutes long, that would be the limit.
For longer podcasts, NPR is experimenting with a sponsor ad in the middle of
content. Host-spoken ads would likely only happen in entertainment offerings
-- not in news podcasts.
PodShow's Jacob says the potential for advertising in podcasts is
"absolutely huge." But rather than repurpose radio ads, advertisers and ad
agencies will have to get more creative, and collaborate more with the
audience.
"The research we've done indicates strongly that the listeners are
interested in interesting advertising," Jacob said. "They don't want the
same thing they're getting in the mainstream. They want to participate in
that process. That has to do with context, with host involvement, and it has
to do with the advertisers, the agencies, the buyers and [PodShow] all being
very creative about how we do this, and listening to the response."
While Madison Avenue types are swarming over the prospects of ads in
podcasts, the typical DIY podcaster shouldn't expect to get a windfall
profit anytime soon. SomaFM's Hodge says that it's hard, but not impossible,
to make a living doing independent podcasts. Though SomaFM has been going
strong since 1999, Hodge still has a day job running Internet operations for
a computer hardware maker.
"If you start by saying, 'I'm going to start a podcast or Net radio station
and get rich,' you're on the wrong footing," Hodge said. "It takes a long
time to get established, and it will be a lot of work to become successful.
But I know some folks running Net radio stations who are mostly supporting
themselves from it. They're not getting rich, but they're making an OK
living. And you'll have to really hustle as a salesperson if you're going to
get sponsors (or donors for that matter). You can't just sit back and expect
the money to come to you."
©1999-2005 USC Annenberg Online Journalism Review.
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