What If Centralization Was Good?
Forgive the clickbait title and come along for the ride as I run through a thought experiment that I’ve been considering for the last few days: what if podcast centralization was good?
Podcasting is one of the web’s last open media ecosystems. Heck its not even ‘open’ in the way the web is (with a standards body and a formal process for new features), it’s just a bunch of tech that just so happens to work together, held together by its own success. And although luck has got us this far, it has become so successful that it won’t stay open, however much we may want it to. (Keep in mind that the loudest voices arguing against change are the ones who have been successful in the current model) Multi-national corporations are sniffing around podcasting because of this success – Google sees the last platform where advertising works, Pandora sees cheaper content and Amazon see a content licensing pipeline for its TV department. We have to face the fact that centralization is inevitable - whether it’s Amazon (as Steve Bowbrick argues), Apple, Google, Spotify or Stitcher.
Ben Thompson, writing in his piece “Podcasts, Analytics and Centralization” in Stratechery last year, outlined what I think is broadly what most people expect to happen to the podcast industry:
One can envision the broad outlines of what the business for a centralized aggregator for podcasts might look like: The centralized aggregator would likely offer hosting to podcast creators, not only to secure the user experience and get better analytics (including on downloads through other apps) but also to dynamically insert advertisements. Those advertisements would also be available to smaller podcasts that are currently not worth the effort to advertisers. Advertisers would get their own dashboard for those analytics and, more importantly, the opportunity to buy ads at far greater scale across a large enough audience to make it worth their while. Ideally, at least from their perspective, they would actually be able to target their advertising buys as well. Users would, at least in theory, benefit from a far broader array of content made possible by the growth in revenue for the industry broadly.
To move the conversation over to monetization for a moment, all of this talk is all focused on advertising (see above, RadioPublic’s Paid Listens, Podmosphere, Dynamo). Advertising is based on the number of “listens”, and the math is simple: more listens = more money. Is this what we want though? And endless quest to increase listener numbers?
There is one thing that people aren’t really talking about: subscriptions. With an open ecosystem everyone has to rely on advertising. The creator only has control over the content they make so their only option was to find sponsors and put ads into thier own episodes. Sure, things like Patreon have come along and services like Memberful have allowed some publishers to build a loyal paying fan base but these are adjacent services - services that have been hacked on to the system; distribution is done by having ‘secret’ URLs that fans are trusted not to share. This approach won’t sit well when Amazon and their legal team come to play.
What I like about the subscription model is that the focus now moves to quality. Is what you’re doing of value to your subscribers? No longer is a creator purely thinking about getting more listeners. To talk about it in terms of web publishing, it is clicks vs value. Do you write content for the clicks or do you write the content for the value to the reader?
With an open ecosystem, no one actor has enough pieces of the puzzle to build a subscription service and there is no system to corral the invested parties to move as one. Centralization would open up a subscription-based model which is better for creators (no need to sell out and read ads for underpants, no ad middle men to deal with) and better for listeners (no need to tracking and ‘audience analysis’, and no ads to skip past) And that’s why centralization could be good.