The New York Times’s podcast success was a fluke
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The New York Times’s podcast success was a fluke
New York magazine published a long, satisfying profile of The Daily, the New York Times hit podcast that is throwing off, at minimum, $12 million a year in advertising. The podcast’s impact on the newspaper is best summed up by a quote from Sam Dolnick, head of its audio division: “The Daily is the modern front page of the New York Times.” Its 2 million daily downloads, the New York article points out, is larger than the entire circulation of the weekday print version of the paper.
The Daily’s success was never a preordained conclusion; the Times assigned it a tiny staff at the beginning, and even its now-famous host, Michael Barbaro, wasn’t sure if the experiment would pan out. In fact, most don’t remember this, but the Grey Lady had dabbled in podcasts in the pre-Serial era and then abruptly shut its audio operations down after they failed to produce much revenue. Given its checkered past with the medium, the Times didn’t have high expectations for The Daily.
This underscores a point I made in a column last year: every publisher should have a podcast strategy. It’s easy to create compelling audio by merely placing a microphone in front of your beat reporters, and even if the podcast never becomes sustainable on its own, it provides a way to establish a closer intimacy with your audience that’s difficult to achieve with text content alone. This is especially important for publishers that have launched subscription paywalls; podcast listeners have been shown to be more likely to subscribe and less likely to be lost through churn.
And who knows, just as the Times executives were pleasantly surprised with The Daily’s success, you may end up with a hit podcast on your hands.
News publishers aren’t the only companies that should have podcast strategies
Podcasting is quickly becoming an essential component to any content marketing strategy. I have years of experience producing my own popular podcast and, through my work as a media journalist, have expansive knowledge on the inner workings of the industry. Check out some of the services I offer over here: [link]
Business Insider’s fascinating approach to paywalls and free content
Why should a publisher treat all content as containing the same monetary value? A metered paywall looks at a 500-word news story and a longform investigative piece and assumes that a reader is just as likely to pay for one as the other. In reality, this doesn’t make any intuitive sense. [link]
The rise of editorial newsletters
I think it’s safe to say at this point that digital publishers recognize the importance of email newsletters to their audience growth strategies. In 2016, Facebook pulled the rug out from underneath a media industry that had, until then, relied on it for hockey stick growth, and over the next several years publishers generally warmed to the idea that the decentralized distribution offered by email newsletters would prove more reliable than the fickle whims of social media giants.
Today, nearly every media company has a robust email marketing strategy, and some news startups interact with their readerships almost entirely within the inbox. We’ve also seen the launch of platforms that make it easier for individual writers to distribute their own newsletters and monetize them through paid subscriptions.
So are newsletters reaching a saturation point? Are they generating real ad revenue? And can newsletters actually replace Facebook as a referral source?
These are just some of the questions I put toward Ernie Smith, the creator and editor of Tedium, a fantastic newsletter that operates as a kind of Wikipedia of obscure topics. Smith also runs a popular Facebook group for the newsletter industry, and he’s one of the most knowledgeable people I know when it comes to newsletter trends.
To listen to the interview, subscribe to The Business of Content on your favorite podcast player. I also rounded up some of the biggest insights from the interview over here: [link]
Netflix isn’t competing with Disney+
One thing that’s always mildly annoyed me about virtually all coverage of the various streaming video services is how they’re always pit against each other as competitors. Thus any move by Disney+ is framed as a strike against Netflix, and if Netflix misses growth forecasts in its quarterly earnings report, that sprouts a million think pieces about whether the proliferation of new streaming apps is finally taking a toll on the company. These columns also like to cite Netflix’s growing debt as evidence that its content budget is unsustainable and bound to sink it as soon as its subscriber growth comes to a halt.
The reason I’m mentioning all this is because Netflix reported its Q4 earnings recently and missed its US subscriber growth forecast. The aforementioned think pieces quickly followed suit.
First, let’s address the argument that Netflix is competing with other streaming apps, namely new entrants like HBO Max, Apple+, Disney+, and Peacock. While yes, these services are jockeying for user attention and money, they aren’t competing in a zero sum game. It’s likely that the average consumer will subscribe to several streaming apps at once.
In fact, journalists who frame these streaming apps as competitors do their readers a disservice because they overlook Netflix’s actual competitor: the expensive cable bundle. As each cable subscriber cuts the cord -- and they’re doing so at an increasing frequency -- roughly $100 is freed up to be spent across several lower-cost streaming services. Americans currently spend something like $89 billion a year for expensive cable packages, so there’s still a tremendous amount of wealth to be divvied up among streaming apps as they lure away more and more cable subscribers.
As for the argument that Netflix’s content budget is on an unsustainable path that will crush the company under a mountain of debt, it’s based on the faulty assumption that Netflix will maintain its current levels of spending into perpetuity.
To understand what I mean by this, consider the content arsenal Disney had at its disposal on the very first day that Disney+ launched. Netflix debuted its first tentpole original TV series in 2013, which means that Disney had a 90-year head start in building its content library of films and TV shows. And that’s before you even take into account the legacy catalogs of its acquisitions, including ABC (founded 76 years ago) and 21st Century Fox (founded 85 years ago). Other streaming services launched by legacy media conglomerates, including HBO Max and whatever comes out of the CBS/Viacom merger, will also carry extensive back catalogs of evergreen content.
Netflix, faced with the reality that many of these same media conglomerates are pulling their content from its catalog, has found itself in an arms race in which it only has a few years to amass a content library as large as The Walt Disney Company’s. Hence why it’s spending $17 billion this year on content and is releasing a new show and movie each week.
Once its executives have deemed its library of original content to be sufficiently large, it can rein in its spending to a much more manageable level and focus on growing the audiences for the hit TV shows and film franchises on its platform.
The tech and business press have been notoriously bad at assessing Netflix’s status within the marketplace stretching all the way back to its DVD-by-mail business, The current group of naysayers are no different in that regard.
Want to interact with me directly?
I have a secret Facebook group that’s only promoted to subscribers of this newsletter. I try to post exclusive commentary to it sometimes and have regular discussions with its members about the tech/media space. Go here to join. [link]
Apple’s initial bet on original podcasts may be too conservative
Back in April, I made the bold prediction that Apple had no choice but to start producing its own original podcasts. You can go back and read it to get the full thrust of my argument, but I basically contended that, because Spotify was spending hundreds of millions of dollars acquiring podcast companies, Apple had no choice but to get off the sidelines and build out a content slate of its own, lest it lose both its podcast AND music market share to Spotify.
Not long after I published that piece, we saw some initial rumors that Apple was approaching podcast creators in pursuit of exclusive deals, and this past week Bloomberg reported that its initial content slate will be primarily focused on developing podcasts around its Apple TV+ shows.
Now, on its face, this isn’t a terrible strategy. Hollywood has generally signed on to the idea that there’s a lot of synergy between podcasts and TV, and Netflix has invested heavily in growing a podcast network that gives fans exclusive access to the stars and creators behind its hit TV shows. Given that Apple TV+ has signed on the biggest A-list actors and directors that money can buy, giving a podcast host access to those A-listers could result in some hit podcast shows.
But will this be enough to shield Apple from Spotify's major encroachment in the podcast space? Apple TV+ shows still have relatively tiny audiences, meaning their corresponding podcasts might have limited appeal. And with Spotify plopping down multi-million dollar deals with the Obamas and bidding $100+ million for the Ringer podcast network, I’m not sure Apple is doing enough to protect its stature as the world’s biggest distributor of podcasts. If it wants to defend that title, then it needs to put more skin in the game.
Other quick headlines
I certainly think The Athletic is an innovative company with a unique value proposition, and I understand why it needs a lot of capital to execute on its vision. I guess my question is: at what point has it taken on too much capital? [link]
Facebook Watch is canceling all its scripted TV shows, but it isn't the only platform to pull back on this sort of programming. YouTube also mostly pulled out of scripted TV about a year ago. I think it's safe to say that scripted TV is too expensive for platforms that are entirely ad supported.
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Simon Owens is a tech and media journalist living in Washington, DC. Follow him on Twitter, Facebook, or LinkedIn. Email him at simonowens@gmail.com. For a full bio, go here.