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June 30, 2005

Apple iTunes support podcasting

By Charlene Li

Schadler

I invited my colleague, Ted Schadler to comment on Apple enabling iTunes to find and play podcasts. I had my own take last month based on the announcement, but I thought you'd like to hear from Forrester's resident music expert. Ted's also the author of a Forrester report, The Future of Digital Audio, which is available only to subscribers. But you can watch/hear a free summary here. And here's Ted:

Apple has added support for podcasting -- a way to subscribe to audio downloads -- in its iTunes software. This isn’t the first time Apple has reached beyond downloadable music; it also supports audio books from Audible.com and Internet radio from Live365. But this is the first time that iTunes users -- those with iPods and those without -- can easily subscribe to what Apple exec Eddie Cue calls “free podcasts” (if easy means accessible to non-alpha geeks).

What it means #1: iTunes support is a big deal for podcasting. By making the podcasting application easy and available, many more people will find it convenient to search for audio downloads -- commercial radio talk shows, Wayne’s World-style programming, and subject matter experts’ personal audio blogs. Forrester expects 12 million US households to be listening to podcasts by the end of the decade.

What it means #2: There’s no money in podcasting yet. At the moment, podcasting is a feature not a market. While podcasting allows many more amateurs to create and distribute audio programming, there’s no indication yet that anyone will pay for a subscription (though podcasts of Howard Stern may convince a few more people to subscribe to Sirius Satellite Radio). That leaves advertising as the only business model. And advertising needs a generally accepted audience measurement tool before a serious advertiser will invest. The obvious measurement tool -- monitoring downloaders’ listening behavior -- is off limits for now because of security and privacy concerns. Apple will not collect listener data. That leaves surveys or emerging measurement tools like Arbitron’s Portable People Meter -- a voluntary audio tracker -- to fit the bill.

What it means #3: Music is the bogeyman in podcasts. The music industry hasn’t yet figured out how to license songs used in podcasts. That means smart podcasters will avoid commercial music -- even tiny clips like NPR uses between segments -- to stay off the RIAA’s prosecutorial radar. GarageBand.com has a nice workaround, though, as it owns the publication rights for the songs its independent musicians host on the site. That means Bo Bice’s pre-American Idol songs can be incorporated into podcasts hosted on GarageBand.com. Apple should do a deal with GarageBand.com.

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Comments

Brad Hill

Ted, there is some money in podcasting. Not much, but here's the thing people tend to forget about indie producers of all sorts: They don't need much money. Indie creators have a strong sense of something being better than nothing, and derive great encouragement from small rewards. The Dawn and Drew Show got a sponsorship deal fairly quickly, as an example of genre success. The lack of traffic measurement makes advertising and sponsorship unaccountable, but isn't that exactly what advertisers are feeling about TV these days? Isn't that why the Portable People Meter is in development?

Podcasting represents an opportunity for creators and sponsors to share a bit of risk, deal creatively, and give the medium a toehold in its climb toward legitimacy. I would say it's all happening with lightning speed.

noah kagan

completely missing on #2 is the discussion of advertising built in to the casts. as well, they can be contextual with the different type of podcasts playing. transferring the radio from the boombox to the internet, web2.0 style.

Tim Taylor

Brad's on the right track. By Apple making it much easier for the non-geeks to get a podcast, it greatly expands the reach of any podcaster.

And I don't think the lack of measurement is going to exist forever. You can measure most downloaded file types with almost any server side measurement service. They'll figure out how to measure how many folks are subscribing to a particular podcast and we'll have metrics.

Toby Mack

Forget about collecting a subscription fee for podcasts at this time. Advertising commercials is the way to make a few bucks to keep your podcast afloat. The concept is to charge an advertiser a fee for every MP3 transfer instead of a flat rate. This gives the advertisers a means of varifing as to how many people are actually hearing their information. This is very appealing to advertisers.

Example:

I have a hit comedy series called, "Jonathan Boss Agent 14 and a Half", in which I sell a 30 second spot just like real radio. My advertiser loves it.

Best regards
Toby Mack

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