Podcasts have grown in popularity over the past few years and companies like Spotify quickly saw the business opportunity they represented. However, it was always one-way talk and Twitter is about to challenge this.
The rise of Podcasts
Podcasts first appeared in 2004 with the iPod. In fact, they are the mix of the two words "iPod" and "broadcast". However, the big surge of podcast usage only happened 15 years later. The global monthly podcast listeners grew from 287 million in 2016 to over a billion in 2020. And it is not over, analysts estimate growth up to 2 billion in 2023.
Audio streaming services noticed one juicy detail about podcasts: they are far more profitable than music because they do not have to save a slice of the pie for record labels, who are very greedy.
As you can see on the graph above, the number of monthly podcast listeners in the United States greatly increased, with over 104 million people, or 37% of the population.
The big names in the competition
- Spotify – They really went all in in the podcast game. The audio streaming company invested over $1 billion in the creation of original content for the podcast industry. They now own some of the most listened to podcasts such as the very famous "Joe Rogan's experience" - where Elon Musk smoked weed in public - as well as the Michelle Obama podcast and the Windsors family podcast "a royal podcast". They also spent a lot of cash buying podcasts companies such as The Ringer or Parcast. Thanks to this, Spotify managed to establish itself as number 2.
- Amazon – Amazon is also jumping in - is there any industry they will leave on the side? - with the acquisition of Wondery an American podcast network backed by 20th Century Fox, for $300 million. There's one goal in mind: use the same strategy as Spotify and make Amazon Music more pod-pular (totally stole than from Rick Martell, but I liked it).
- Apple – After all, Apple remains the real OG, as we have mentioned above. For this reason, they are still number one in terms on monthly podcast listeners.
Twitter might shake the way podcasts are distributed through the acquisition of Breaker
Twitter has recently acquired the podcast company Breaker, both to enhance "the health of public conversation" as well as to help with Twitter's new audio-based networking project called Twitter Spaces. The Breaker app will close in a week, so the team and technology will dedicate all their efforts towards the Twitter project. Twitter specified that they acquired the app not for their podcast content - as a matter of fact, they have no original content - but for their team and technology.
Founded in 2016 at a time where podcasts were mainly seen as a productivity tool, Breaker helped broadening the use of podcasts, introducing the dimension of a community, where listeners could comment, like - in other terms, react to the content they were consuming, with also the ability to follow friends and share their favorite episodes.
Twitter plans on using this ability to use this knowledge and experience to create an audio-based community. Users will not only be able to listen to their favorite episodes, but also chat in real time using a voice interface rather than the written way we're used to.
Today, Twitter is still working on the development of their new service. Technical issues remain to be solved, but they are also preoccupied by the new challenges that arise from hosting live audio, such as quality control and moderation.
This remains an important challenge for Twitter, which already had its fair amount of history regarding online toxicity and moderation failures. Will they be able to build a safe and quality audio space for users to interact? And if yes, will this space have a future in a reopened world where people will be able to meet and chat in public venues?
Do not only passively listen to podcast, express your thoughts!
Twitter managed to identify the number 1 problem in podcasts. Podcasts, like movies, tv series, music and art, are great conversation starters and managed to get people passionate about them. However, there is currently no way to react to and talk about them. Until now, they have been a 1-way interaction, where the listener is nothing but as passive ear. They could be fostering the social breakthrough of podcasts, but in order to do this, it seems that podcast platforms need the help of a social network.
This could also have a great impact on advertising. Less than $1 billion is spent on podcast ads per year, because such ads are not very well targeted. The laser-precision of social media ads could be the way to go and the door to boosting ad sales, both for podcasts and Twitter. Whether it will work or not, it sure makes for an interesting attempt to shake the industry.