By Charlene Li
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.



