At Oxford Road, we’ve been on the front lines as Podcast has grown from a fringe marketing channel to the mainstream powerhouse it is today. As they say, “it’s hard to read the label when you’re inside the bottle.” So, this week we turn to venture capital firm Andreessen Horowitz (a16z) for their insightful assessment of the Podcast space. With a bit of history and future predictions, we believe it’s one of the best and most comprehensive reports on the state of the industry we’ve seen. In the article, the team at a16z covers the following:
- A short history of Podcast as a medium.
- Podcast’s meteoric rise from a niche internet community to now reaching one-third of all Americans.
- The uniqueness of the Podcast listenership demographic.
Whether you’re a marketer considering Podcast for the first time or one of the Podcast Pioneers, The Influencer considers this a must-read.
In the world of podcasting, the flywheel is spinning: new technologies including AirPods, connected cars, and smart speakers have made it much easier for consumers to listen to audio content, which in turn creates more revenue and financial opportunity for creators, which further encourages high-quality audio content to flow into the space. There are now over 700K free podcasts available and thousands more launching each week.
As new tech platforms hit scale, we on the consumer team have been closely watching the future of media and the technology driving it — in all forms. We’re interested in investing in the next wave of consumer products and startups coming into the ecosystem, and that includes the audio ecosystem.
Our investment philosophy is to not be too prescriptive, so we do the kind of “market map” overview below to help us have a “prepared mind” when we see new startups in the space. The below deck and commentary (with some sections redacted, of course) was presented to the extended consumer team, including general partners Connie Chan and Andrew Chen, who are investing in this space. If you’re working on anything interesting in this area, we’d love to hear from you!
A brief history of podcasting
Simply put, podcasts are digital audio files that users can download — or in some applications, stream — and listen to. While podcasts differ widely in terms of content, format, production value, style, and length, they’re all distributed through RSS, or Really Simple Syndication, a standardized web feed format that is used to publish content. For podcasts, the RSS feed contains all the metadata, artwork, and content of a show.
To listen to a podcast, a user adds the RSS feed to their podcast client (such as Apple Podcasts, Spotify, etc.) and the client then accesses this feed, checks for updates, and downloads any new files. Podcasts can be accessed from computers, mobile apps, or other media players. On the podcast creator side, creators host the RSS feed as well as the show’s content and media on a hosting provider, and submit the shows to various directories, such as Apple’s podcast directory.
Podcast content is typically available for free, though creators can choose to set up private RSS feeds that require payment to access.
Current headlines about podcasts today hail them as the next major content medium, describing them as “suddenly hot,” as the next battlefield for content and as an “antidote” for our current news environment.
From niche internet community to one-third of Americans
Over the course of the last 10 years, podcasts have steadily grown from a niche community of audiobloggers distributing files over the internet, to one-third of Americans now listening monthly and a quarter listening weekly.
Americans listening weekly to podcasts grew from 7% in 2013 to 22% in 2019. 65% of monthly podcast listeners have been listening for less than 3 years.
People are already spending a lot of time on podcasts, and it’s growing: listeners are consuming 6+ hours per week and consuming more content every year.
Among weekly podcast listeners, there’s high consumption: 7 episodes per week and nearly 1 hour per day.
The demographic of podcast listeners is not your average American. Roughly half of podcast listeners make $75,000 or more in annual income; a majority have a post-secondary degree, and almost one-third have a graduate degree [source]. There’s also a gender gap with podcast listeners skewing mostly male, mirroring the gap among podcast creators as well. However, the gender gap has narrowed from a 25% gap in 2008 to 9% today.
Podcast listeners are not your typical American: they’re affluent, highly educated, and skew male.
In the years following the release of Apple’s podcast app in 2012, smartphones pulled ahead of computers for podcast consumption and have grown to become the dominant way that consumers listen to podcasts. The green line includes smart speakers, which have grown 70% year over year in terms of listening.
Since Apple launched its Podcasts app in 2012, smartphones have quickly grown to become the most common device for podcast consumption.
What may surprise people living in heavy commuter markets is that listening primarily happens at home, which represents almost half of all podcast consumption.
We would also anticipate that more recent technologies like Bluetooth-enabled cars and smart speakers — now owned by 53M Americans or 21% of the population — could change the mix of where podcast listening happens.
The lion’s share of podcast listening happens at home, followed by taking place in a vehicle.