Will Podcasts come of age as a revenue avenue for streaming platforms?
While its current contributions are minuscule, experts believe that podcasts have the potential to become major revenue streams for platforms in the coming years
Podcasts on music streaming platforms are fast gaining popularity, witnessing an uptick of 29.3% in consumption post the COVID-19 pandemic, as per KPMG - A Year Off Scripts report.
Podcasts have helped the music streaming platforms not only increase user engagement, which has led to increased listenership but also open new avenues to boost advertisement revenues.
"There is tremendous potential for podcast growth within the Indian Market. Every smartphone user is a potential podcast consumer in this country. We’re looking at 750MM smartphone users in this country, which gives you a fair idea of the current market potential,” Ishani Dasgupta - Lead - Podcast Partnerships at JioSaavn
She further added, “Growth within India is going to be heavily rooted with how effectively platforms (and creators) can diversify their regional catalogue. One of the biggest advantages of podcasts is how easy and cost-effective they are to create. You can have a podcast on just about any topic in just about any language thereby capturing a large chunk of the potential 750MM by building out comparatively smaller, but highly engaged communities."
Stating the similar thought, Prashan Agarwal, CEO, Gaana shared that advertising tends to follow the users and users are definitely tuning to a new way of entertainment, gaining knowledge and engaging with their favourite subjects through Podcasts. He said, “On Gaana, we are seeing increasing consumption of podcast content and this is generating a lot of interest from the advertiser community who are looking at unique ways of engaging with audiences.”
As per the KPMG report, India is already the third-largest podcast listening market and it is expected to be valued at Rs 17.6 crore (INR 176.2 million) by 2023 growing at a steady CAGR of 34.5%.
Despite encouraging numbers, the current contribution of podcasts to the overall revenue of their platforms is still very small.
Dasgupta believes that there is tremendous potential to generate revenue within podcasting. "Advertising revenue within the medium was estimated to be 700mm USD, globally in 2019. This was expected to hit close to 1bn USD in 2020 - but these were pre-pandemic estimates, with a large focus on mature podcast markets,” she added.
The scenario in India is slightly different. The podcast medium is still in a relatively nascent stage here. It needs to be evangelised with not only the community of consumers/ listeners but also advertisers. Brands need to now start looking at including podcasts and their engaged audiences within their media mix to get better returns on their advertising spends.
Dasgupta said, “That being said, IP sponsorship has been a successful model for generating revenue for platforms like JioSaavn. Overall podcast streams have grown by 18% in the last two months. JioSaavn's All About Corona Podcast channel is growing by 14% on an average per week, with multiple podcasts bringing in important updates about the pandemic."
The podcasts open up more avenues for streaming platforms. For instance, for Gaana, there are two types of content -- syndicated and fully branded content piece.
In the former, a brand can associate as a sponsor on a podcast that's already been produced for example HDFC Life associated with Umeed - by Zakir Khan on Gaana where the brand enjoys high affinity with content and the host and is able to create awareness with the users.
In the latter, the entire concept and execution is designed specifically for a client based on a brief. The brand has a far higher degree of innovation and presence in these content pieces. Gaana recently executed a Podcast -- Let's Crack It -- for Unacademy that was hosted by Cyrus Broacha.
Shahir Muneer, Founder and Director, Divo Music too believes that podcasts in India still have a niche number of audience, but the listeners are increasing. With the majority of people staying indoors and looking for new types of content to consume, the user base has grown in the past few months. The users are very highly skewed to urban category A audience. Content providers have also increased in the last few months.
“While podcasts are getting popular, more so in the lockdown, the advertising revenue there is still at a very nascent stage. Podcasts are much bigger in countries like the US, Australia, UK & Europe where people are listening to five to seven podcast episodes a week. While India is definitely a great marked for podcasting, it still has another two to three years to get there.
"Streaming platforms will look at the usual monetization routes for podcasts, sponsors for the show, brand integrations in the show content, and pre-roll/mid-roll ads - pretty much like how Radio & OTT platforms do,” said Rajni Daswani, Director - Brand Experience & Employee Engagement, SoCheers.
"Numbers are hard to predict since the market is at a very nascent stage right now," she added.
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