Midweek Grilling: Audible UK's MD Chris McKee on Who's Making Money from Podcasting

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Podcasts have well and truly crossed over to the mainstream, with big guns like the BBC getting involved, and Ricky Gervais well on his way to making his next million from his paid-for podcast.

As MD of Audible UK, Chris McKee has the ideal vantage point on the latter podcast, but also has opinions on the balance between subscription and advertising-supported podcasts, what the prospects are for grass-roots podcasters, and why your favourite celebs could soon be blaring out from an iPod near you…

Why is there such a buzz around podcasts at the moment?

It feels very much like the Internet in 1995. A lot of people are thinking they need to be there. They’re not entirely sure why or how, or how it’s going to be monetized, but they know there’s something important here and they have to play a role.

Who’s getting involved?

We’re seeing a whole range of participants from major media conglomerates who see it as a way to reach a wider audience with versions of their existing content, through to people who are creating new content – some of whom are amateurs, some are semi-pro, and some are very professional. The big factor is that quality is going to win out.

You’ve been involved with the commercialisation of the Ricky Gervais podcast for its second season. How successful has it been?

If you use iTunes as a barometer, look at the album charts. Six out of the top ten albums are Ricky Gervais, which really is incredible! What we’re seeing is that people are buying individual episodes, but also buying a subscription to the complete season two. We’ve also bundled up the 12 episodes from season one that were originally free, and are selling those – they’re at number eight in the iTunes chart.

So people are prepared to pay for podcasts even if they’ve previously been free?

Yes, that’s what we’re seeing. People are happy to pay for this kind of high-quality content. The lesson here is that there’s value in an archive, which is exciting if you’re a podcaster who’s been putting up regular periodical shortform content in the past.

How is demand split – are more people wanting subscriptions or paying per episode?

We’re certainly seeing a demand for both. One interesting factor was that when we announced season two, there was a commitment to a minimum of four episodes with pricing of 95p per episode, or £3.95 for a subscription to the whole series. Now we have a commitment to six episodes, so the subscription looks even better value. We’re still looking at what the optimum pricing for this kind of content is, but the results have made us confident that we chose the right price in this instance.

That’s one side of commercial podcasting, but how about advertising and sponsorship?

It’s definitely emerging. We’ve developed a technology called Wordcast which addresses a couple of opportunities. First, it gives people the opportunity to accurately track the number of downloads and listeners, so they can apply a rate card to sell advertisements or sponsorship. Second, it also makes it easy for them to insert the adverts into the audio as they upload it.

Does this benefit the smaller grass-roots podcasters then?

Yes. If you’re a media conglomerate with an advertising sales department, you’re used to this sort of thing. But we have to also make it easy or the private or semi-professional podcasters to do this. That’s why we’re providing them with the tools.

Will listeners kick against advertising or sponsored podcasts? After all, they’ve been used to it all being ad-free so far.

We don’t know yet. Certainly one issue in the past was whether people would be prepared to pay for podcasts, and what we’ve proven with the Ricky Gervais product is emphatically that they will, both for new content and archive material. So what could have been a concern for people, we’ve proved that if the quality is there, people will be prepared to pay for it. In the case of advertising and sponsorship, look at TV and radio. There’s no backlash against the fact that there’s advertising there.

The BBC is doing a lot of podcasting at the moment, and offering it all for free. Might this have a negative effect on commercial podcasters trying to charge or include advertising?

The BBC are a unique case, in that they’re funded by the taxpayer, so can give the content away for free. However, they’re working to a seven-day model, where content is given away free for seven days, so I don’t think there’s been a final decision yet as to what happens after those seven days. But in terms of their effect on the rest of the market, I’d look at the example of radio, where there’s a clear understanding that it has been funded in a particular way that is ad-free, but other commercial stations are funded by advertising. People are intelligent enough to appreciate this.

As commercial podcasting takes off, will there still be a place for the grass-roots podcasters who started this whole thing off?

It would be nice to think so. I would come back to the basic point that quality will always win out. If people have a high-quality production and content that is compelling to an audience, they will do well. But I think we’ll also see some high-profile celebrities coming into this who’ve seen what Ricky Gervais is doing in terms of speaking directly to an audience.

So hang on, instead of writing columns in celebrity magazines, Coleen McLoughlin could just do her own podcast?

Well, there is a British fascination with celebrity, and podcasting is a new means for people to bring that kind of commentary!

Lumme. Our last question is about mobile phones, as there’s an increasing number of handsets which can play digital music – and thus by extension, podcasts. Is this a big opportunity?

Definitely. The first route into this is through smartphones. We support all the Microsoft-powered smartphones, Palm, Symbian Series 60 and we’ll shortly be making an announcement about another one we’ll be supporting.

Is this via the PC?

At the moment, we support tethering your phone to your computer so you can transfer over the file. But we’ve also launched AudibleAir, where we can download over the air onto these smartphones. It’s all programmable too. If you have a one-hour commute to work, you can program your phone so that during the night, you download the next hour of audio, whether it’s the next chapter in a book, or a digest of your newspaper, or whatever.

Is this all through Audible, or are you looking to do deals with the mobile operators?

We’re looking to do deals with the network operators to roll that out. We’re waiting for unlimited data plans to become available, but we’re seeing that start to happen now, so we’re hopeful of doing some deals.

Stuart Dredge