Labels Press Record on New Way to Grow Streaming Revenue: Make a Podcast
Revenue is up, listenership is climbing and new players are getting into the game as the industry spots another chance to broaden its scope.
Earlier in 2017, Sony Music sent one of its artists and an A&R executive into the studio together with unusual marching orders. They weren't going to make music; they were recording a podcast.
"I was literally writing this song about a breakup in real time," singer-songwriter LP tells RCA Records A&R rep Jeremy Maciak about her song "Switchblade" in the pilot episode of Sony's podcast The Lost Art of Liner Notes, which debuted in July.
With potential new episodes in the works that might live on artists’ home pages, the record company is dipping its toes into what’s already become a booming business for radio stations, sports networks and individual broadcasters. Surprisingly few music stars have jumped into the game: rapper Joe Budden discusses "life, music, sex and more" with his "very random friends" on his SoundCloud podcast, while Tiësto offers a podcast version of his radio show Clublife.
But opportunity beckons: National Public Radio’s true-crime podcast Serial was downloaded 40 million times in 2014, while ESPN’s podcasts set a record last year with 47 million monthly listeners. And in June, the Interactive Advertising Bureau released a study of the 20 leading podcast companies that showed that while advertising revenue was a relatively modest $119 million in 2016, it was up 72 percent over the prior year, and projected that number to grow another 85 percent in 2017, to $220 million.
"I'm very aware this will become a significant revenue-generator down the road," one major-label executive tells Billboard. "My goal is to start building a library and an audience for our talent, so you can monetize appropriately once the market becomes mature."
About 40 percent of U.S. adults -- 112 million -- have listened to at least one podcast, according to a 2017 Edison Research survey, up from 11 percent in 2006. With podcasts now raking in an average of $25 per 1,000 listeners, a show that draws 300,000 weekly listeners such as Combat Jack, hosted by former music-business lawyer Reggie Ossé, can pull in more than $7,000 a week with little overhead. Ossé won't divulge his ad rates, but he begins every show talking about a sponsor, like Tito's Handmade Vodka, which funded the last few episodes.
“I just knew in my gut it was going to turn into something,” says Ossé, who launched his Combat Jack podcast in 2011 after he’d burned out on law and left a gig editing The Source magazine. Ossé has interviewed stars such as Ice Cube on Combat Jack, while his latest podcast series, Mogul, examines the life and death of Chris Lighty, former manager of 50 Cent and Mariah Carey, who died in 2012.
Radio broadcasters have plunged most aggressively into podcasting recently: iHeartMedia this fall announced the launch of its seven-podcast Nashville Podcast Network that includes morning show host Bobby Bones’ Bobbycast, plus a show about Nashville superstardom hosted by Jake Owen and another called Geeking Out with Kristian Bush, one half of the platinum-selling duo Sugarland. So far, says John Rosso, president of market development for Triton Digital, which provides tech development for the audio industry, the ad revenue “has not really been all that meaningful -- but it's going to be important in the future."
While record companies have been slower to dive in, they have one big advantage over other podcasters: they can pepper their casts with songs without fear of being sued for copyright infringement. Combat Jack's hosts once included songs by hip-hop stars, but producers recently scrubbed out the music so that they could post earlier episodes online without risking lawsuits or royalty payments.
"I avoid using music altogether," says Mike Brandvold, host of the Kiss podcast Three Sides of the Coin, which draws 10,000 to 70,000 weekly listeners. "The licensing is such a mess."
Darcy Jeavons, a Huntington Beach, California, singer-songwriter and audio engineer, hopes her new podcast Female Mixing Engineer could advance her career. Though the money’s not rolling in yet, she says, “I'm doing something I'm passionate about, and hopefully that passion comes across and people google 'Darcy Jeavons.' It’s to show what women can do, and I want the guys to hear it.”