Did you hear that? Podcasts are the sound of the future

Most of the conditions that made podcasts become part of the modern urban habits will still be valid in the years ahead

02.Oct.2020 17:14 BRT
UPDATED 30.Dec.2020 11:29 BRT

In recent years, podcasts have gained more and more space in people’s lives, with ratings indicating steady growth in the listening audience. This rise showed that audio never went out of style, what happened was a decrease in the cultural weight of radio in the life of people in the big cities. Pure audio, which had the radio as its main broadcaster, was affected for sure, and this cultural weight was exactly the thing that podcasts helped to recover. The segment has evolved a lot since its creation and should continue to adapt to the constant evolution of the digital world. But what will be the changes that will dictate the evolution of podcasts?

There was a time when radio was ubiquitous in people’s lives. But the rise of TV changed the habits of families and radios became something restricted to cars. The reign of TV has been a long one. In the past decade, however, smartphones have begun to steal the attention that used to be on TV screens.

Podcasts are not radio

Many people like to compare podcasts to the radio. But it’s not that simple. While the radio content is short-lived and happens live, the podcast is what is called a cold medium: pre-recorded, designed to be consumed today or years from now.

Podcasts were created in 2004 because of an ex-MTV VJ and a programmer that wanted to distribute digital audio on demand. People would subscribe to the shows and copy their episodes to their iPods, the iconic MP3 players that helped resurrect Apple. Podcasts remained in the nerdy niche for another 8 years, until Apple made an important move: it began distributing the Podcasts app embedded on iOS 5, bridging the gap between users and audio content on demand. It is not that there were no dedicated apps on smartphones. But they needed to be searched and installed on the devices. Boarding a dedicated app has changed everything. Soon, Android followed the trend.

Podcasts have gained space not because they have cutting edge technology or because they are new, but because they fill a gap in people’s lives. The modern urban citizen, a smartphone user by nature, spends about two to three hours a day commuting to and from work. Wash dishes for half an hour, walk the dog for 15 minutes, go to the gym twice a week. At these times, on-demand audio entertainment is the only one that meets perfectly the needs of its listeners.

Voices of Brazil

Brazilians embraced podcasts since the beginning. The oldest active podcast in the country, Nerdcast, was launched in 2006 and is still going strong. It has over a million listeners per episode and is the most popular weekly title in the local market. The newspaper Folha de São Paulo came up with a podcast about Brazilian presidents in 2018, an election year. But the country felt a huge bump in the market when big media got into the fray. Grupo Globo published a slate of news shows with its top talents. The result: Folha’s Café da Manhã is the most popular title on Spotify, and Globo’s O Assunto (something like “The Topic”) is always right after, at the top five in the platform. In 2019, a research from Ibope registered that 40% of the population already knew what was a podcast.

In 2020 the production of new shows grew 103% in Brazil, according to the study State of the Podcast Universe, from Voxnest. We love to hear them and we are making them more and more.

There are many podcast creators making money and exploring new formats. The veteran Nerdcast is in the market since 2007. Other indies, like Braincast, Mamilos, Somente Elas, and Um Milkshake Chamado Wanda started making money later, as the production got more professional. There are now big players, able to make new shows happen. Black and LGBTQ+ podcasts are becoming more popular as well. Shows like Historia Preta (“Black History”), the blockbuster AmarElo Prisma (Yellow Prism, in a translation that does not get all the meanings of the title), made by Brazilian superstar Emicida, and Santíssima Trindade das Perucas (something like The Saint Trinity of the Wigs).

Brazil already has a true-crime podcast that became a hit: Projeto Humanos (Project Humans). In its third season, the show told a story about the assassination of a kid in a small city in the south of Brazil. The gruesome story generated a book and is going to become a documentary series on Globoplay, the local VOD service built by Grupo Globo to face Netflix and Amazon Prime.

The brands are making podcasts as well. They are putting money in novel ideas and using the shows as vehicles to meet their clients. Our company, Ampère, made over ten different titles for the Brazilian branch of HBO, talking about their shows, and helped 99 (the ride-sharing leader app in Brazil) create Papo de Motora (something like Driver’s Chat), to build a direct conversation with their huge base of drivers. Bradesco, the biggest bank in Brazil, it’s the main sponsor of Mamilos and made possible a Brazilian version of Good Night Stories for Rebel Girls.

All in all, the growth of podcasts resulted in bringing back formats that, in some parts of the world, had been forgotten for decades, when the radio abandoned them: audio-dramas, game-shows, feature-length or serialized documentaries, the list can go on and on.

That’s why, looking ahead, you need to think about how the world will change to imagine how the podcast will continue to remain integrated into people’s lives.

After COVID-19

According to Podrac, a company that tracks ratings for over 500 of the biggest podcasts in the US, the quarantine was the only thing capable of somewhat slowing down audience growth. During the most acute months of social isolation (between March and May), having people confined at home, without commuting to work or going out to the gym, affected the growth rate. The most popular podcasts have had little or no impact on the number of listeners. But the segment’s growth, which had peaks of 20% per month in the previous year, fell to almost zero. The usual prime time, commuting periods between home and work, fell by 26%. But in a few weeks, the audience was redistributed throughout the day and even over the weekend. People started listening more to podcasts at home and, because they had people around all the time, they started to listen to the shows together. So far, podcasts, for the most part, were designed for people who would listen to them with headphones on their smartphones. But in the post-COVID world, with people spending more time at home during their workweeks, we may see the rise of a new type of podcast: shows made to be heard by groups.

In any case, the impact of the pandemic on business has also affected sponsorship contracts for several programs and has caused many people to stop supporting their favorite podcasters. In the face of a global recession, it will also be a challenge for the segment to maintain healthy levels of growth in monetization.

Economy: easier distribution and mature influencers and business models

The arrival of giants such as Spotify, which reached 299 million users worldwide and 138 million premium subscribers in the second quarter of 2020, was crucial for the popularization of podcasts. Given the investments made by the company in acquisitions and exclusive contracts with relevant creators, an even greater boost can be expected in the coming years. Another difference that Spotify offers podcasters is a really detailed metrics package. Until now, creators worked with little information, such as the number of downloads, reproductions, subscribers. This was because the segment’s decentralized structure made people listen to programs in different applications that did not reveal statistics. As Spotify podcasts are played within the platform, the company is able to accurately show users’ behavior every second. This data helped several podcasts to make a leap in quality.

Spotify’s entry in the field is also creating a favorable environment for the arrival of companies capable of creating and developing valuable intellectual property. Companies in the creative industry, such as movie studios, TV channels, and major book publishers, look at the podcast as an interesting environment for testing ideas that can then be explored in the form of games, movies, TV series, etc.

Despite Spotify’s influence, it is important to remember that podcasts do not depend on a single distribution channel. This condition is a problem for the programs to be discovered, but it also makes creators less dependent on a single distribution platform, as happened with Youtube in the video market. Spotify (yes, them again) can change that and become even more influential when they create an efficient monetization program that can attract independent creators.

Podcasts are also kind of an “overnight success story built over 16 years”. That is, it became a known media channel when it was already mature. Its biggest influencers are people who have already set up business models that work for them. Professional podcasters make money from advertising, subscribers, or supporters and, following the script outlined by influence marketers, they are writing books, giving lectures, teaching courses, and licensing products.

Now, do you know what podcasters care little about? Automated ads. Much of the earnings from podcast advertising happens when the presenter makes the spots in a handmade, personalized way. Automated advertising, if done indiscriminately, destroys this value, because it works on very large scales. These kinds of ads are only of interest to podcasters if applied to their oldest inventory. But for that, they need to have a really large back catalog of old episodes and a huge level of interest in these libraries.

To infinity and beyond: cheaper production, voice interfaces, and autonomous cars

In 2020, Nvidia launched intelligent systems able to process audio captured in real-time and silence any background noise (even from a jackhammer) to capture only the voice of an announcer. By the way, the result is impressive and very convincing. In a few years, we can expect that the development of this technology will make spending on expensive studios and equipment unnecessary. Recording a podcast with almost pro-quality will be easier than ever.

Another thing that is getting cheaper and more pervasive is the personal áudio assistants. More and more, people will have Siri, Alexa, or just Google helping them in the most common tasks. Personal voice assistants are already at a very advanced technological level. And they will get better and better. For podcasts, the main effect of their arrival in the homes of millions of consumers is the idea that there will be speakers in virtually any room in the house. Although voice assistants allow users to do things like turn on the light or turn off the TV, the main effect of these systems is to change the relationship between humans and audio. Try browsing interfaces like that. It is very different to think about the result of a search, the use of menus, or how an interruption is going to happen. Audio is interrupted less and the levels of attention to what is being said are greater.

Looking further ahead, we can imagine the effects of events such as the arrival of autonomous cars on the market. Smart cars are expected to have several huge economic and social effects. Millions of jobs will no longer make sense or become niche products. In this world, cars tend to become impersonal vehicles, shared by several people. But what will be the real effect on podcasts? Those who do not drive have more options for consuming content. Instead of just being able to hear something, you can read, watch videos, work, interact on more complex cognitive levels.

The tech and cultural seesaw

Over the past few decades, we have seen a media seesaw. When new media channels come up, the previous ones don’t necessarily disappear, but they gain or lose cultural influence in people’s lives. Just remember what this article said about radio and TV. The podcast found its space fitting in the needs of millions of listeners. The coming years will bring several challenges that will test the entire cultural market. Podcasts and their creators have conquered their space, created a new market, and will continue to try to grab new slices of the pie. It is part of the pains and pleasures of joining the main team.