The rapid growth of podcasting is slowing down as major platforms scale back investments and implement layoffs.
On Tuesday, Spotify announced plans to cut around 200 jobs, or 2% of its workforce, as it faces challenges in monetising its podcast business. The layoffs will impact the podcast vertical and other functions as the platform reorganises its podcast unit to focus on partnerships with its top stars.
Spotify is combining Parcast and Gimlet's podcast studios into a "renewed" Spotify Studios operation. While Spotify's move into the podcasting industry sparked competition among media and tech companies, profitability has not kept up with the level of investment in the sector.
The platform's restructuring follows earlier layoffs in January. where Spotify let go of around 600 employees, or 6% of its staff, as part of cost-cutting measures after a pandemic-related spending spree.
Has the bubble burst?
2019 marked a booming era for the podcasting industry, with media companies investing heavily to expand their podcast offerings.
Spotify made notable acquisitions during this time, including Gimlet for $230 million in 2019 and The Ringer for approximately $200 million in 2020, signalling its expansion into areas beyond music streaming.
While investments in podcasts have been substantial, profitability prospects have not always matched the level of investment which has seen several podcast publishers, including Vox Media and Pushkin Industries, aside from Spotify, recently make job cuts.
In addition, media companies like Acast, Amazon, SiriusXM, and NPR have reduced their podcast budgets over the past year.
Camapign understands Spotfiy is only monetising their podcast inventory in Australia at the moment, and not the wider Asia Pacific.
When asked how Audible adapts to the changing market conditions, Karen Appathurai Wiggins, vice president and head of content for APAC at Audible, claims the platform has seen 'incredible growth' in the format it passionately believes in.
"There are many keys to success, but for us, it always comes back to great storytelling," Wiggins tells Campaign.
"Our service has continuously operated at the intersection of technology and entertainment, and we are always looking for new ways to leverage technology to help connect our members with their next best listen. We have a variety of ways to help connect Audible listeners with content they will love, ranging from algorithms to traditional editorial recommendations."
Timi Siytangco, the key account director for Asia at Acast, argues as a nascent industry, it is natural for the growth rates to vary, but claims the platform does not see a stall in podcast creation.
Siytangco claims Acast hosts more than 100,000 podcasts globally, and creators continue to join the platform at 'an incredibly healthy pace'. She admits there is not one silver bullet for growing a podcast, which is why Acast equips podcast creators with different tools needed to produce shows.
For example, Acast has an integration with YouTube to allow audio to be easily shared on the platform, tools like Headliner to create social assets as well as offering educational resources, collateral, and industry expertise to creators to help them attract new listeners and maintain their audience.
The platform also introduced a new subscription product Acast+ to help creators monetise content and build loyal listener bases of paying subscribers.
While the breadth and variety of podcasts is great, one of the challenges podcasters have is finding their audiences, or having their audiences find them.
"Podcast discovery has long been a hot topic," Siytangco explains, which was a key motivator for Acast to acquire podcast directory Podchaser's database last year. "Creating the most extensive and deepest database of podcasts worldwide allows us to help solve that problem for podcasters, advertisers and listeners alike."
The shift to smaller podcast shows
Podcast platforms are addressing this by shifting their focus from big-budget deals to bundling smaller shows, aiming to offer more inventory and reach a broader range of listeners. Platforms shifting their focus enables reach, scale, and measurement for advertisers through tools like dynamic ad insertion and programmatic ads.
In India, Audible launched Vice Media's latest podcast series, The Dark Side, on its platform. The Dark Side is a deep dive into revealing secrets and untold perspectives and shines a spotlight on the underbelly of India, looking at four essential themes love, money, Bollywood and cricket.
According to GWI, India is at the forefront of podcast consumption, with over 68% of the population tuning in on a monthly basis. Listeners enjoy a diverse range of content, including news, entertainment, and education.
According to former Spotify executive, Kym Treasure, who now runs audio ads marketplace Audacia, a notable trend is most Indian listeners prefer English-language podcasts, with over 97% accessing shows on their smart devices for on-the-go convenience.
“Delhi, Pune, and Bangalore are the top cities for podcast listening, while Kolkata stands out for its love of conversational podcasts, which are more popular there than in other regions,” she tells Campaign.
Wiggins explains to Campaign the platform is always looking for differentiated content experiences that appeal to its members.
"We keenly observe what our customers listen to on our service and consume across the broader content landscape. This led us to seek Vice Media to produce original and exclusive content, especially for Audible listeners," Wiggins explains.
According to Wiggins, Audible has been working with Vice since 2019. The first collaboration by both parties was in Australia for 'No Gangsters in Paradise', hosted by Vice journalist Mahmood Fazal, who drew on his own experiences as a gang member to tell the inside story of Sydney's Lebanese gang wars.
Audible's next show with Vice was in Japan, which was the first in the 'Dark Side' series, 'The Dark Side of Japan: Yakuza Saga', an audio-documentary featuring never-before-heard interviews with real-life organised-crime figures, recounting their most notorious deeds.
Nilesh Zaveri, the managing director for APAC at Vice Media, explains the publisher worked closely with Audible to craft the story arc for each episode and present it across 12 episodes of 20 mins each.
According to Zaveri, knowing the consumption habits of Audible consumers and making sure the episodic length is just right to keep the audiences hooked for the next episode.
"Vice has a solid audience base across our channels in India, so we understand what kind of content young audiences in India like to consume," Zaveri tells Campaign.
"Based on our insights, we presented the four original series under the Dark Side banner in India, using Vice's cultural and investigative lens. Our objective is for audiences of these podcasts to be informed and gain a larger context to stories mainly told from only one perspective in India."
Are podcasts still attractive to advertisers in APAC?
Despite the format's monetisation issues, advertising continues to grow. With more listeners turning to audio platforms, ad budgets are keeping pace with users in the Asia-Pacific markets. Audio ad revenues are projected to more than double across APAC to $4b between 2023-2025 according to the IAB.
Across Southeast Asia, major brands looking to tap into niche audiences of a certain affinity, continue to look to podcasts as a solution.
In the Philippines, whisky brand Glenfiddich used podcast audio ads and sponsorship to promote its 'Where Next Club,' a platform where Filipino innovators connect and inspire the next generation of changemakers.
Working with Acast, the brand used the voice of its Southeast Asia brand ambassador, Brett Bayly, in its ads across three Acast Show Collections closely aligned with Glenfiddich's target audience of young affluents, premium, and society and culture.
Glenfiddich also worked with the Philippine podcast network PumaPodcast, which connected the brand with a digitally savvy and educated audience. PumaPodcast listeners are mainly in the 24-44 age range, and 70% hold a bachelor's degree or higher, demographic desirability by the brand.
Ling Versteegen, the head of marketing for South East Asia at William Grant & Sons Singapore, which owns Glenfiddich, explains it was essential to consider the unique listening experience of podcasts, as the audience is engaged in listening rather than scrolling or clicking, for example.
Therefore, the brand had to adapt its measurement approach to ensure we accurately captured the impact of the podcast advertising.
"We compared the results of exposed and controlled podcast listeners to determine whether exposure to podcast advertising positively impacted their perception of Glenfiddich," Versteegen tells Campaign.
"The results show a 2.3 times lift in brand awareness and a 139% lift in brand favorability. This is highly positive as they easily exceed Acast's global benchmark for favorability of 45%."
Audacia’s Treasure notes Filipino audiences love their podcasts and tune into a mix of international and local content such as "Queerfully Yours," "Ted Talks" and "Barangay Love Stories".
“Trends also show consumers enjoy ASMR and podcasts that help you fall asleep in the Philippines more than any other country in Asia,” says Treasure.
'Sleeping Pill with Inka', in fact, is one of the bigger podcasts, which gives you the feeling of being tucked into bed and hearing bedtime stories as Inka reads short tales and poems to lull you to sleep.”
Siytangco points out that as attention is becoming an increasingly critical metric in the media landscape, podcasting presents a compelling value proposition.
She notes that podcast advertising campaigns have been planned and purchased at the show level rather than by targeting audiences directly, resulting in much of the potential audience attention going untapped.
"A big focus for us recently has been developing our industry-leading suite of targeting capabilities called conversational targeting," Siytangco tells Campaign.
"These allow advertisers to target as granularly as individual episodes and podcast conversations. This opens even more of our network to advertisers as they can target beyond just what category a show falls into and go as deep as what keywords a particular episode uses."
According to Siytangco, Acast sees the best results when the company prioritises the depth of the listener relationship over show size, emphasising the importance of an audience-first approach.
Acast's insights indicate that when campaigns are planned by considering the audience first and including a range of sized shows, they can be even more effective in engaging audiences with ad messages.
"Actual audience-led planning is achievable through the open ecosystem, one of Acast's core values. Our podcasts are distributed across all podcast listening apps, including Spotify, creating an open ecosystem that allows brands to reach their audiences in their preferred listening app," says Siytangco.