Michael Geoghagen, a leading figure in podcasting, has posted that podcasting is a community, not an industry. He focuses a lot of the attention of the difficulty podcasters experience making money via advertising supported podcasts and the failure of the podcast advertising networks to deliver real big dollars.
While I agree with virtually everything he says in the post, I find it funny that I never thought of podcasting as an industry. Publishing is an industry of which downloadable media is just one part.
It seems clear to me that podcasting is just one of the many channels that publishers have available for distributing content. And if we view the business as publishing then there is a much bigger pool of advertising money’s available for publishers.
But if we look at the publishing business, the first step is to build scale in audience and in ad sales. Publishers who make good money don’t rely on ad networks to provide their primary advertising revenues. The ad networks provide fill in ads for unsold inventory and the CPM from ad networks a much, much lower than ad inventory sold directly to advertisers. Podcasters who aren’t able to build significant audiences (big and/or valuable) and direct advertising sales will struggle to make much money.
Publishing is a tough business and all you have to do is look at the industry’s supply and demand curves to understand that impression based business models will continue to weaken. Even large scale publishers like Yahoo struggle to sell their inventory and have to resort to ad networks to fill in their unsold inventory. Inventory is expanding at a rapid rate and demand growth is severely restricted. That translates into deflationary pressure on revenue realization across the industry as the number of people dipping into the pie is increasing faster than the growth of advertising.
If you want to build a real publishing business, you better be prepared to go beyond advertising and think about how you build a valuable audience and provide them with lots of ways to pay you money.
[tags]podcasting, publishing, Michael Geoghagen[/tags]