The following was transcribed from a recent interview on The Agile Brand with Greg Kihlström podcast.
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Today we’re going to talk about the future of podcasting with someone who has been at the center of this movement since he founded his company in 2015. To help me discuss this topic, I’d like to welcome Josh Nielsen, Founder & CEO at Zencastr.
[Greg Kihlstrom] Let’s dive in here and start with a little background on podcasting itself. So, you know, while it’s extremely popular now, there were technically podcasts back in the early 2000s, though they weren’t nearly as popular, with such a broad demographic. What do you think brought about such a rise in popularity over the last several years?
Well, I can tell you what happened because I watched it happen. When I started building Zencastr, there was nowhere near as much excitement in the space as there is now. It was sort of a sleepy industry. And I’ve really got to say I didn’t even know it was going to be as big as it became. But, you know, I got lucky, I suppose. But really what happened, to answer your question, is – I’m trying to remember, this was as I was building the initial versions of Zencastr that started to blow up, and really the wave kind of built. And it was because you had podcasts like “Serial” and “This American Life,” I think, were the two sort of breakouts that happened in, I don’t know, 2016-ish, where they suddenly were getting millions of – I think it was “Serial” hit a milestone where they got a million downloads per episode. And they were hitting that regularly. And then everybody’s head started to turn, like “Whoa, that’s a lot of eyes; that’s a lot of brand impressions,” from an advertiser perspective.
And so people realized, “Hey, there’s gold in those hills,” if there’s going to be that many people interested, as you mentioned, you know, in the United States alone 60-plus percent are listening monthly, if not more. And it’s just continued to grow. And I think I just saw the brand spend projections. It was projected to be the market size tripling by 2023 to 3-point-something-billion. Now the new projection is by 2026 it’s going to be 6-point-something-billion, another doubling. So it’s hitting an exponential growth curve. And it’s really just because so many people are interested in podcast content. It fits into their day in a way that many other mediums can’t and don’t. You can listen to it while you do your laundry, while you’re exercising, while you’re driving. And that’s a lot of time that people are spending and listening to content, and a lot of opportunity for creators and brands to get in front of people.
So I’m very familiar with Zencastr because I’ve been using it since I started this show in 2018. But maybe for those a little less familiar, can you give a little background on what exactly the platform is and does, and how do you differentiate it?
Great question to provide some context there. Back in those days, and the way I got keyed onto this market was I was actually working on a totally different company in the audio space. It was around music and helping electronic musicians collaborate together online. It didn’t work out, for many reasons. But someone said, you know, “Hey, podcasters have this problem getting high-quality assets back and forth. Maybe you can help there.” I honestly sat on that for a few years because I was focused on something else, but it always stuck in the back of my head. And I started looking into that problem, and I realized that podcasters at that time were using mostly Skype to do remote recordings, and most podcasters had either a remote co-host or a remote guest on most of their episodes. It’s really hard to find all the top performing people in your hometown that are going to come to your house, right? So you’ve got to cast a wider net. The problem with that, though, is that Skype, at that time, and now Zoom, which a lot of people use, has the same problem. It records on one end. And so the hosts might sound really good, but the guest is getting recorded with all of the voiceover IP artifacts, could be compressed. It can sound really robotic if the Internet connection is unstable. It can completely drop out at times. And that is really, really annoying to a podcast audience. They’ll jump your case on Twitter; they will stop listening to your show, if you’ve just got poor quality audio. It’s really annoying to the brain. And so it was a major pain point for podcasters at the time.
And that was, kind of, the initial problem and the initial entry point that we solved, long answer to your question. It was a double-ended recording solution. So you send a link to whoever you want to record with; it records them locally on their end; records you locally on your end; and then we mix those tracks together after the fact so that you have a really high-quality recording on both sides that is easy on the listener ears and sounds great and professional. And I should add, that was our entry to market. Now we’ve expanded and we realize there’s a lot of other problems in helping podcasters create high-quality content. And so now we’re helping them produce the content, distribute it, grow the audience and also find monetization.
I wanted to follow up with that, anyway, because you started Zencastr in 2015. I think it was audio only, and limited set of features, even though they were much needed features. But can you talk a little bit about those early days versus now? You know, what’s changed, both in the platform but also just from how you’re seeing people use the platform?
Yeah, I mean, A, the market is just blowing up. It’s white hot. And that’s been a big change, a lot more interest, a lot more bigger players in the market, a lot more people coming from other mediums to get into podcasting as well. It’s starting to become just another arrow, like a necessary arrow, in your quiver of your content marketing strategy, and for a lot of people the most powerful part of that. But, you know, I just went to the Podcast Movement Conference about a month ago, and one of the big things that I noticed there, and a big shift that’s happening now in the industry, is it used to be, you know, if you had a podcast, it was oftentimes mostly a passion project. You were probably spending out of your pocket to do this. You weren’t making a lot of money, if any, and sometimes you were spending hundreds if not thousands of dollars a year on all the tools and services around it. Now what’s starting to happen, now that you’re getting creators from YouTube and other platforms getting into podcasts, the expectations are changing to where it’s more of, instead of I’m going to pay you for your service, It’s like, “Hey, how are you going to help me make money, and how are we going to make money together?”
And I think that’s actually a great transition in the space. It’s a much needed thing. Most of these podcasters should be getting rewarded for the value that they’re providing into the ecosystem. And a way that I kind of describe what we’re trying to build is the YouTube for podcasts. If you’re on YouTube and you’ve got over a thousand downloads a month, there’s a button you can push, and now you’re monetizing; you’re in a rev share agreement with YouTube; you’re making money. And some of these guys are making a lot of money. And that doesn’t exist in podcasting right now, and it really should. And there’s no reason why it can’t. It’s been proven in other mediums. And that’s what we’ve built at Zencastr and are leaning heavily into. We believe that, if you’re a creator, you should be able to create and be rewarded for the time and effort you’re putting into it. And there’s a lot of people out there to listen, a lot of brands out there that are looking for more channels to grow. And podcasting is a great option there.
So that’s a big shift that I’ve seen that’s been happening, and now if you go to the conference, that’s where the money is at; you know, the service companies are in the small booths, and then the advertising companies are renting out the galleries and throwing the big parties.
Yeah, and, I mean, do you see that as, I would say that’s a maturing industry, right? Is that kind of how you would characterize it?
The podcast ad market? Oh, yeah, I mean, it’s still very Wild West. I think it’s still even too early to call it maturing, like, it’s all over the place, and a lot of opportunity. You know, for example, we’ll go talk to some of our creators and we’ll just ask them an open-ended question like, “What does it cost to run an ad on your podcast,” to get a sense of how people are valuing themselves and the content. And you’ll get answers anywhere from, like, a five-cent CPM to a $500 CPM. And it’s just because the market is so all over the place right now. And, you know, that’s not a bad thing. It just means there’s a lot of work to be done to actually help people figure out how to actually make money and also not waste a ton of time.
That’s another big thing, not just monetization, but if a podcast takes you six hours per episode, which is what our old surveys we used to do before we started building all this product, that was the average, six hours; some people were spending a lot more time. And so just bringing that time to creation down and also making it so that it’s valuable for the creators is really a big part of what I think the podcasting market needs. There’s so many people that try to get into podcasting every day, hundreds, If not thousands, probably. And very few of them actually make it out of the other end of producing content and continuously making a show. It’s not because they don’t want to. It’s not because they don’t have talent. It’s just, it can be really hard and difficult without the right tool chain and the right help to not only help you create the content quickly. find your audience and then start kicking on the money as well, without having to be everything to everyone, like right now so many podcasters are trying to be a marketer, a podcast host, ad sales broker, social media, and nobody can really do all of that stuff well on their own. You kind of have to focus. But so many are being pulled in those directions right now.
I think that’s where it is kind of pointing to what you were saying earlier, it’s got some room to mature, surely, as a communication tool and as an industry, even though it is being used so prevalently. As far as content goes, I mean, I think that’s certainly a key thing. I mean, you can have the greatest team in the world, but if the content of the show is not compelling and everything, it’s not going to get that audience that is going to stick with it. What have you seen in terms of trends in content? I mean, I know there’s more podcasts than ever, so probably more diverse content, but are there any things that you’re seeing, and maybe just to focus that question, you know, content as far as those those brands and those marketers out there that are looking to get into podcasting, like any trends that you’re seeing there?
You know, one thing I’m seeing is just more and more brands are getting into it, in one way or another. I’m always sort of surprised at the different kinds of content. And there’s just such a diverse array of all different kinds of interests that I couldn’t even tell you, like there’s the obvious ones, like true crime is hot, right? I think everybody knows that. But, you know, aside from that, we try not to focus too much on what the content is but just helping give everybody the tooling that they need. As far as trends, I think a lot of it is just this move towards kind of a creator economy that you’re seeing happen in other places is definitely strong in podcasting now. People are coming into podcasting, like obviously they have passion, but it’s also with an expectation that they’re going to be able to build a business out of this. And that’s kind of the goals they’re coming into. Podcasters are very entrepreneurial people, very strong-willed. The ones especially that are successful now because, and in the past, because it’s not been an easy road to walk down. And now we’re just seeing there’s a lot of demand for people to come in and build a business out of podcasting, by and large.
So what’s on your roadmap with Zencastr? What do you see in the next couple years ahead?
Well, as I mentioned, we’ve recently launched the full creation suite, not just recording but production and editing, promotion and monetization. Further down the road, I think we’re leaning pretty heavily right now into helping them monetize through advertising as clearly everybody wants to do that in some way, but there’s a lot of other options, I think, that make sense for podcasters to monetize with that you’re seeing a lot of people already engaging with, which is like private RSS feeds, backer programs. You’re seeing live streams, and like paid kind of other sorts of events, also like merch. You know, there’s all different ways that you can monetize. And I think, if you’re a new podcaster and you’re growing, you know, getting off the ground, you may have an easier time making money with a backer program. I’ve talked to some podcasters that have maybe 5,000 downloads a month or less, but they’ve got a really strong, loyal audience and a backer program. And 500 of their audience members a month are paying them as part of a backer program, and they’re making real money off of it. And that’s a really high engagement rate. You’re not going to get that out of an ad, right?
And so I think, depending on your content, depending on the size of your show, there’s different monetization options that make sense for that stage. And we want to be there to serve in all of those different areas. So that’s some of where our head’s at moving forward, is not just monetizing through advertising but finding all of the different ways that you can provide value to your audience and provide a deeper connection there that’s going to be valuable for them.
About the Guest
Josh is the Founder & CEO at Zencaster, one of the leading podcast recording platforms.
About the Host, Greg Kihlström
Greg Kihlstrom is a best selling author, speaker, and entrepreneur and host of The Agile Brand podcast. He has worked with some of the world’s leading organizations on customer experience, employee experience, and digital transformation initiatives, both before and after selling his award-winning digital experience agency, Carousel30, in 2017. Currently, he is Principal and Chief Strategist at GK5A. He has worked with some of the world’s top brands, including AOL, Choice Hotels, Coca-Cola, Dell, FedEx, GEICO, Marriott, MTV, Starbucks, Toyota and VMware. He currently serves on the University of Richmond’s Customer Experience Advisory Board, was the founding Chair of the American Advertising Federation’s National Innovation Committee, and served on the Virginia Tech Pamplin College of Business Marketing Mentorship Advisory Board. Greg is Lean Six Sigma Black Belt certified, and holds a certification in Business Agility from ICP-BAF.
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