Flip The Switch Episode 58: Podcasting 101
Austin. Today on Flip the Switch. The guys are back after a hectic Black Friday weekend to talk about the current state of podcasting and how big the medium has gotten. We cover the numbers of podcast listeners versus radio, and what you can expect from podcasting in 2019. In news and trends, we discussed paramount teaming up with Netflix, Apple teaming up with A24 (that’s the production company that made lady bird), and how Amazon c-suite of executives is branching out to run other businesses in the tech space. Let’s get into it!
01:06 AUSTIN: Welcome to Flip the Switch presented by Power Digital Marketing. This is episode number 58.
01:11 PAT: Number 58. Our Jack Lambert episode.
01:15 AUSTIN: Who the hell is that, Pat?
01:16 PAT: We just looked him up. He’s a hall of fame linebacker, played 11 years for the Steelers, he won four super bowls…
01:23 AUSTIN: Steel curtain!
01:23 PAT: He was named to the pro bowl team nine times (I’m reading this off a bleacher report–but nine pro bowls).
01:28 AUSTIN: Oh yeah! The reason why we say this is because we too are a powerhouse just like the Steelers and their franchise of winning all these super bowls. And then this guy just being an absolute powerhouse himself, so that’s us!
01:42 PAT: That’s us. These reaches with the athletes are getting harder and harder, to make.
01:46 AUSTIN: Yeah, it turns out that most athletes don’t have extremely high numbers on the back of their jersey. They’re all like kind of normal and thirties and the twenties, maybe like eight or two, but no we’re gonna keep doing this! We’ve gone way too far down the rabbit hole.
02:01 PAT: We have a great episode lined up for you guys today. We have some business news and trends that we’re gonna cover with you guys, some really interesting activity coming from the former Amazon executive team that we want to talk with you guys about (a company that we follow really, really closely).
02:13 AUSTIN: I think you all know Amazon.
02:14 PAT: Yeah, you guys might have heard of a little company from Seattle, Washington. Yeah, real small family-owned business called Amazon. And then we’re gonna get into our main segment where we talk about the current state of podcasting. There’s some super interesting trends that have come about as a result. But before we do that, let’s hop into business news and trends.
02:32 AUSTIN: All right. Let us start with not Amazon… We’re gonna leave that to the second half, and we’re gonna start instead talking about Netflix. Because I just watch that not a lot of Netflix on thanksgiving break, which I’m sure we all did and they’re also doing some things that are pretty incredible. This just coming out on the Hollywood reporter that Netflix is teaming up with paramount studios, which is owned by Viacom, to produce a lot of new content. Pretty much the game plan behind this is to go against competitors Disney and warner brothers, who are about to start their streaming programs next year.
So, for Netflix what pretty much what they need to do is produce as much original content as humanly possible. Because next year around this time, Disney’s gonna drop a hammer and they’re gonna drop it big. They’re gonna unload all of the shows that people grew up with, pretty much. Along with a bunch of new stuff that they’ve been producing to draw people in and get them off of Netflix.
03:30 PAT: Yeah, it’s pretty interesting. I read something about what Disney’s gonna do. They’re coming out with like a Star Wars TV show geared towards little kids to get them invested in the series, so when they drop new movies–they’re literally using it as a lead generation source–which is so interesting from a business perspective. And my thing too is if I’m Netflix, I’m definitely a little bit concerned. I was a first mover in the space. We were like the private studio that had the means as well as the medium so to speak. And now there’s these other players coming in that have a really deep pockets like a Disney.
04:03 AUSTIN: And the experience.
04:04 PAT: Exactly and the connections within the industry to actually pose a viable threat. And I think we’re facing another example here of a first mover needing to adapt to maintain it’s market share.
04:14 AUSTIN: Absolutely, and we’re looking at them partnering with paramount which is a hundred and six-year-old studio. They made the godfather. They’ve done the transformers. They’ve done all these feature films and they are pretty much hoping that this will be a lifeline to grab that kind of shock factor in potential new clients or keep their current clients happy by bringing in these titans of the industry, so to speak, with original content and I’m sure they’ve got something in the works to bring on those type of movies. I know the godfather’s already on there. That series is in place.
04:47 PAT: Best trilogy of all time.
04:48 AUSTIN: It is, I think you’re right. But I think for Netflix what they’ve realizing is that for them to grow their audience base they need to continue to come out with original movies. They’ve dumped a ton of cash, I believe that they’re going to invest in an additional two billion in original content…
05:03 PAT: With a b!
05:04 AUSTIN: With a b. Billion–next year, I believe, or in the next coming years to keep this up. Because this is what we want as consumers at this point and also we are not okay with maybe so to speak just things coming out randomly. We want things that we specifically like. So that’s why Netflix is doing a lot of a data analysis on the market on who’s watching what.
05:25 PAT: Yeah, they’re curating their content! It’s the same thing that you do as a business owner with your website. You look at what people are looking for the most and you put that in front of them because they’ve shown you with their actions that they are asking for that, right? It makes sense. It’s the same reason that rate… And we’ll get into this in a little bit too… But it’s the same reason that there used to be like Nielsen surveys and Nielsen ratings and things like that. People wanted to understand what type of stuff you cared about on the radio or on tv. And it’s just a different medium and it’s interesting you can curate a full-length feature film based off of what people want to see.
05:56 AUSTIN: And I think the comparison you’re making of radio versus what we’ll get into podcast and then movies versus Netflix is actually a really good analogy, because it’s the same concept, right? With radio it’s just a general audience. You’re hoping that someone’s tuning in as they’re either in the car or in some place of business. That they listen. What we’re seeing with movies is that’s kind of the way it’s been too.
Now, Netflix it’s a choice, right? I’m sitting down on my couch. I’m going to click through to the specific genre that I like and find a plethora of films that I enjoy. That is Netflix, podcast being the same thing. They’re high intent. We get to choose exactly what we want. So, these studios (let’s just call it Netflix) is realizing that they’re not in this game yet and that’s why they’re coming up with this platform.
But the big difference is yes, they’re aware of it but they also just have way more money, way more money than Netflix. Netflix is big, it totally is, but Disney’s a hundred-year-old company, right? Closing in on it. And they are the largest now, the largest telecom company in the world. So that puts them in a position of power of they own this entire space and they can just buy what they want. They literally just bought I believe is 21st century fox this year. That’s gonna close next year. So that they can dump all that content onto their platform as well.
07:14 PAT: Yeah, and Lucasfilm!
07:15 AUSTIN: And Lucasfilm, yeah.
07:16 PAT: They own all of Indiana Jones, all of Star Wars, everything that was its own independent, like adventure style. And the reason that we kind of get into that too is that speaks a little bit to the… I guess the credibility that Disney brings as a brand to the markets. Netflix is you don’t want to devalue your brand. You don’t… When you’re going up against a Disney you better be bringing the heat with some premium content, because you know that they’re going to be. And they’re gonna have that brand name behind it that evokes that either some type of like nostalgic thought within people that’s gonna make them more inclined to want to watch it. Or it’s gonna bring the heat with some credibility and people are going to know okay, Disney’s about to put out a new Star Wars tv show. It’s gonna be pretty good.
07:59 AUSTIN: I do want to talk a little bit about Apple first. Before we transition into Amazon. And they are a part of this as well. They just partnered with A24. That’s a as in Apple, 24 studios and I think at least us in this room are very aware of them because that’s our demo. They are an independent film production studio that does a lot of original content. That’s strictly what they do.
08:19 JOE: They’re the best movie studio on the planet right now.
08:22 JOE: They’re the best movie studio on the planet because of their creative value, right?
08:26 JOE: Because they take risks. They do things original. If you look back at the last four or five years of the Oscars, they always have at least five to about seven films, kind of nominated for the top honors. All the stuff they do is original. They take risks. They take risks on new people and it always seems to pay off.
08:45 AUSTIN: Yeah, one quick one is “Moonlight.” that won the Oscar, I believe, last year… Two years ago.
08:49 JOE: Oh yeah, I could start ringing ’em off. I’ve been following A24 since about 2014. It first started kind of emerging with “under the skin.” and they’ve just been hit after hit after hit. A lot of my favorite movies like “Ex Machina,” that was A24 and it was really their pick off point so…
09:06 AUSTIN: And I think what we’re getting at here is this space is becoming extremely crowded right? Cause Apple is now saying, “hey we need to get in this game too. It’s ours for the taking as well. Let’s bring another element to this puzzle, if you will.” and that is the demo of what A24 is in that audience that they capture and growing that.
And then likewise for A24, they’re seeing this is kind of the jump off point, right? They know that they’re big, but they’re not necessarily a household name yet. Just that type of thing is maybe people know the movies but let’s become a paramount, let’s become a twenty-first century fox.
09:37 JOE: They’re definitely on the cusp of that kind of moment in their, I guess timeline, but when I first heard about this news, I was kind of dreading it. I was like, “they’re gonna lose their originality.” but then I kind of realized they’ve gotten this far. And Apple is smart and they would have hired them for a certain reason, so on the flip side this is probably the smartest thing that Apple could have done.
09:59 PAT: It was pretty cool too because you think about Apple as a brand, they really do value that creative element more than another really, really … Like Apple’s corporate, don’t get me wrong…
10:07 JOE: Another superhero movie?
10:08 PAT: Yeah, exactly.
All right let’s move on to some more boring business stuff really quickly. No, but this is actually super interesting. So, it just came out recently on tech crunch, robin hood hired a 20-year Amazon veteran, a former VP of finance there to their CFO role, because they are… I mean they announced at their investor meeting at the end of last quarter they’re eyeing an IPO. Basically this, and robin hood for those of you that don’t know it’s a zero-fee stock trading app and it’s also a cryptocurrency exchange. So basically, if you’re getting into investing for the first time it gives you a really easy way on your mobile to just make trades, buy and sell throughout the day if that’s what you want to do. Okay.
The start-up just hired Jason Warnock. He’s a former executive at Amazon their former VP of finance. He was there for 20 years. Think about really quickly how much growth has occurred at Amazon over the course of the last 20 years.
11:00 AUSTIN: Their entire company.
11:01 PAT: Their entire company. Exactly. They went from just a reseller of books and seller of books online only. To a conglomerate essentially, in multiple verticals, that’s consistently taking over the supply chain and cutting margin. Why this is significant for robin hood in my opinion is because there have been a lot of other companies that have eyed that IPO. The crux of that and the issue has always become that they don’t know… The people that created the technology don’t know how to use it for profit. They don’t know how to flip a profit. They don’t know how to be profitable enough to get people the eps that they’re looking for out of that initial IPO when they buy.
So, they bring in a guy like a Warnock, he’s there to cut costs, he’s there to increase their margin as they scale towards that IPO. I think it’s an incredibly, incredibly smart move on robin hood’s part.
11:51 AUSTIN: Yeah and I think that what we’re getting at here and we’ve talked about this I believe it was snapchat who hired an Amazon exec away to kind of run and hopefully flip their financial situation on its head. Because we know they’ve had a terrible year.
Is that the individuals coming out of Amazon are extremely savvy and more so savvy than others in the tech space. And you might think that someone in a start-up situation would have a little bit more of a jump, because it’s their niche. But it turns out that finance doesn’t always change just because you’re in more of a niche tech sector. And what Amazon knows is that that is very true. They own a lot of different companies, they’ve grown to be a conglomerate as pat is saying and they’re not just in the service industry. They’re not just in the supply chain industry. They’re in every single industry, so that means that from a financial standpoint they need to be almost templatized. They need to be very focused on keeping things the same across the various platforms and businesses that they run, so it all makes sense.
So, a person like this who’s leaving this company has that in their brain, because they’re not just thinking of one stream of revenue, they’re thinking of all these various different streams of revenue becoming one, right? And balancing those books and playing the PNL’s of a conglomerate is much different than one line of revenue. So, he’s gonna take that mindset to a smaller company that they may be very confused from a book standpoint, right? They’re trying to understand how to even turn a profit at this point and he can say, well this is nothing compared to what I’ve been doing, right?
13:24 PAT: Yeah, exactly.
13:25 AUSTIN: And the deals that he has to be a part of in just the day-to-day… And I think it’s really smart hire and I think that’s the reason why a lot of people at Amazon are being hired away for probably extreme prices, because they are the ones that have kind of trial-by-fire grown this business to be huge and it’s successful.
13:41 PAT: Yeah, think about it… So, we were talking about this off the air, think about it like the New England Patriots, right? You have Bill Belichick as the head coach. He implements a winning program, a winning game plan so to speak. Jeff Bezos is Bill Belichick. Okay, we get that. A ton of Bill Belichick’s former assistant coaches and things like that… Offensive coordinators… Are head coaches elsewhere now because they got such an in-depth knowledge of the game when they were there learning from one of the best. That in my opinion is the biggest asset that these execs from Amazon that are being hired away to these other companies are bringing to the table. It’s not just experience, it’s a winning game plan.
Just in the last week Airbnb hired Dave Stephenson as its new CFO. He used to be a VP of finance at Amazon. A few weeks ago, Zillow hired Alan Parker, another Amazon finance VP, to its CFO role. This movement is happening. These companies are seeing “hey, Amazon knows what they’re doing. And maybe I can pay a premium to get that guy in more of a position of power and learn something about what has made Amazon into what it is from a financial perspective and from a scaling perspective.” and for companies that are looking to IPO, that’s the name of the game. Profitable scaling.
14:53 AUSTIN: It also looks really good to the shareholders, right?
14:56 PAT: Oh, and it’s a great, it’s a great move.
14:59 AUSTIN: I brought in the VP finance from Amazon to run the books. What do you think about investing?
15:03 PAT: So, you could say things are going pretty, pretty good.
15:07 AUSTIN: Yeah, it makes a hundred percent sense for these guys to pull this off. Like we said, I do expect all these companies to do pretty well and I bet you if things don’t go well, they can run back to Amazon.
Alright, we’re gonna transition into our main topic.
15:28 AUSTIN: Main topic for today, we are talking the current state of podcasting. As podcasters here (part-time podcasters) we are very in the crux of podcasting, and we’re always talking about new ones that we like, but we realized we don’t ever talk about the whole industry and how that’s a big, big, big part of people’s lives now and especially 2018 it’s everywhere and everyone that I talk to, at least in my little world, is listening to shows and I think that that is something that we can dissect.
15:57 PAT: Oh 100%, and obviously this is something that’s really interesting to us but it’s interesting to anybody that, like basically if you’re a business owner this is an easy way to start to get people in the door. Podcasts are being used way more now for targeting your market, because people have such a wide selection of shows they can pick what… So, we were touched…
Okay, backtrack. We were just talking about this with Netflix. People can pick what genre they want to listen to with a podcast. There’s millions of podcasts out there, you know?
16:29 AUSTIN: There’s literally millions.
16:29 PAT: There are literally millions of them and so when somebody goes and looks for a business podcast, the intent behind that user is that they want to learn about business. Well, if you’re smart and savvy you can get in front of some of those users, either by getting in touch with some of these podcasters for advertising space, doing podcast influence or outreach. It’s really, really targeted, authentic, credible advertising for your business.
And if you’re a company that wants to establish thought leadership for people that are interested in your industry or your services (kind of like we do) it’s a good foot in the door with those people by offering them something upfront, you know?
17:08 AUSTIN: And it’s also a really good way to grow your personal brand too for your business, is if you’re a thought leader in your space, this is your next step. This is your kind of larger jump off point for 2019, it’s getting on podcast. And it doesn’t need to be Joe Rogan. You can find a podcast that fits your niche that has maybe five to ten thousand listeners and it’ll boost your credibility and also lead to business. For lead generation situations, it’s not about the volume, it’s about who you’re talking to. Podcast gives you that ability over a radio commercial and we’re gonna get into that a little bit too on how radio’s going down and podcasting is going up.
But from what we see in our business in what we offer is a service is the ability to have pitching people to be on podcasts whether you’re a client of ours and we can get you in that right sec.
And then also what we see just from an advertising standpoint is that dollars are flowing into podcast. Because of what pat said, you can actually see who your audience is. It is not 98.7 where you don’t know who’s tuning in and maybe you get that Nielsen report or whatever it is occasionally. This is “I want to advertise on a podcast about building cars and specifically vintage cars because I sell vintage car parts.” I mean, it’s really that simple at this point.
18:20 PAT: Straight up. All right, I’m gonna hit you with some facts real quick.
18:24 AUSTIN: Do it.
18:24 PAT: Some of these are very crazy sounding. Okay, 64% of Americans have heard of podcasts. Okay that doesn’t sound like that many. That’s more than who know who the vice president of the united states is.
18:34 AUSTIN: Oh ho!
18:35 PAT: So there’s that.
Second, forty four percent of Americans have listened to a podcast. 12 million listened to a podcast for the first time last year. So people are actively looking, right? Even though it’s a medium that’s been around for a little while the amount, the variety, allows people the option to get in there for the first time and find something that they like.
18:55 AUSTIN: Yes.
18:55 PAT: Okay, here’s the good stuff. 26% listen monthly. A third of all Americans, aged 25 to 54, listen to podcasts on a monthly recurring basis.
19:07 AUSTIN: You know what just went off in my brain? Dollar signs, because that, my friend, is where people are spending money. 25 to 54.
19:15 PAT: It’s super true. Yeah, so that’s more than all Americans… Than any other sector of American demographics. And then also there’s a stat down here that I’m trying to find really quickly. Oh yeah, so podcast fans listen to 40 percent more shows than they did last year. So, people that listen to podcasts are also delving into more topics, most types of podcasts, more shows for the first time this year than they did in the year before. Part of the reason for that, as a subsidiary of that listeners are slightly less loyal on a per episode basis to shows this year than they were before.
19:57 AUSTIN: That one is huge, because that tells us that people are actually more interested in the topic and less interested in who’s talking about it. So, you as an advertiser are okay with hitting every single podcaster in that space. You can advertise on all of them and you’re gonna reach the audience, right? We know that just because joe Rogan’s the biggest doesn’t necessarily mean that people are only gonna listen to Joe Rogan. They might also listen to… Let’s name another big one … Something on NPR, right?
20:24 PAT: Tim Ferris.
20:24 AUSTIN: Tim Ferris. Thank you.
20:25 PAT: Nerd.
20:25 AUSTIN: Right, nerd, but a big nerd. So, this is what we’re learning from this type of thing is that it’s not about the person, it’s about the topic, and that niche.
20:36 PAT: Exactly. And I think too, it really lets you know you need to bring the heat from a content standpoint. Like you really do need to bring the heat. Because there’s so many other places people can go. Like if you’re not bringing quality content right from the start like hopefully we’ve brought to you guys today and that’s why you’re still sticking around, people will bounce. Because there’s so many more options than there were before.
20:59 AUSTIN: And something to keep in mind too is you might be thinking, “well, I better start advertising on podcasts tomorrow.”
You should, but you also have to remember that you can’t just throw up a regular commercial on there, because this audience also have the ability to just skip it. We can literally just click the button. It goes every 30 seconds on your iPhone, and it’s over.
So, what a lot of people have gotten really good at is writing creative ad copy for the podcast hosts, and what that does is it allows the podcast host to connect with the audience so that people don’t skip it. It makes it a bit more enjoyable. Maybe people don’t realize that it’s an ad read and more of just being part of listening to the show.
These are also massive keys to understanding your audience, because if you can write ad copy for your demo and it plays and people aren’t skipping it… That tells you know your audience extremely well, which you can take that material and put that into your other marketing channels, right? You’re probably running Facebook ads. You’re definitely doing SEO and you want to run shopping campaigns on a PPC, or for AdWords so that tells you that you know your audience. So that’s something to think about as well, if you’re gonna do podcasting.
22:03 PAT: Well, speaking of knowing your audience too, here’s a few more demographics that are crucial… If you’re a business owner this is your gold mine right here: 28% of all avid podcast listeners (people that listen on a weekly basis) are 25 to 34 years old. Podcast listeners are 68% more likely to be postgraduates. People that are out of college have disposable income. They have money to spend. And on top of that people that listen to podcasts are 32% more likely than other sects of the population to have an annual income of 75 grand or higher.
That is a goldmine. If you’re bringing the right content to these people as a business owner, that is a perfect example of how you can penetrate a market and know exactly who you’re talking to in a way that will actually end up resulting in bottom-line progress for your business, which I think is super interesting.
There’s a very even split among gender, which is to be expected to an extent. Podcast listenership increased by fourteen million women in the last year though. So again, this is just kind of letting you know that it’s like you do need to come at this from a unbiased standpoint. You need to come at it from a very like… These are the facts. You need to be presenting educational material to these people, because they are electing to be more educated on that topic. They’re post-grad, more times than not, they don’t care if you’re… They don’t want to be spoken to like they’re… They don’t want be condescended to, is what I mean.
23:35 AUSTIN: I want to talk about the top listens per show, pretty much. Or by even publisher, right? Because we’re seeing just like radio, there are our conglomerates of podcasting, right? NPR is the biggest one that comes to name. They are also a gigantic radio station, so we know that they’re pretty much every city in America bringing you local news, very grassroots. They’ve also got into podcasting and they got in it early, so they’re the biggest ones. A unique monthly audience, 18 million a month. Global unique streams and downloads: one hundred and sixty five hundred million a month. Excuse me. So they’re absolutely destroying…
24:14 PAT: You thought that was a year!
24:14 AUSTIN: I thought it was a year for a second, and then I almost…
24:16 PAT: That’s video game numbers. That doesn’t make any sense.
24:20 AUSTIN: One hundred and sixty-five hundred million downloads per month for NPR and that’s with forty-two active podcasts. The next up would be iHeartRadio. They have a hundred and twenty-six shows and they’re only doing a hundred and forty-seven hundred million.
24:36 PAT: That’s crazy.
24:37 AUSTIN: Only. With thirteen, just under fourteen million unique monthly audience. This is extremely big numbers that are bridling radio. They’re meeting radio, but it’s a better audience. It just is. It’s because people are choosing to listen to them. It’s not the radio in the passing, this is an active listen. They’re clicking, they’re finding, they want their show, they need their show and more and more people are doing that.
25:00 PAT: And a common misconception is that people are always listening to their podcasts in the car. Only 23% of podcast listeners are in the car. Almost fifty percent, forty nine percent are at home. So again, going back to that active listenership. Like when I’m at home I don’t just have something on in the background. I need to be like I… When I’m at home and I decide to listen to a podcast or something, like that is what I am doing at home. I’m fully invested.
25:25 AUSTIN: That’s a great time because you know people can buy.
25:28 PAT: That’s what it is! They’re on their commute.
25:30 AUSTIN: They have their ability to go on their computer, they’re on their phone, they’re messing around. You catch their attention with some sort of deal, you just lock them in. It’s better than a Facebook ad, because they’re already listening, and they’re most likely not going to take the opportunity to skip it unless they’re bored. So just place a deal right in the beginning in the ad and you’re guaranteed to get them to listen.
25:48 JOE: I think too, to kind of tie it back to Netflix is the emergence of the long-form content that everyone needs. Where you can get all of that information that you need. You don’t have to rush, you don’t have to cut everything out, you don’t have to filter it. Things like that. Netflix, a show comes out, a new season of “Ozark” comes out, you sit down and you binge that show for ten hours.
26:08 JOE: Whatever may be. And people have no problem with that. There’s a huge trend and people doing that.
Same thing with a podcast. People will sit down, listen to other people talk, listen to groups of people talk about a certain discussion or a certain topic. And they’ll be engaged and listening to you for up to three hours. And people love to do that and somehow, some way it’s become addicting to people. And it’s kind of turning that tide where yes, we do like that… We have short attention spans, now we want that instant gratification. Or our generation does. But also, there’s a huge sect of people and people are coming around to the idea of long-form content and really buying into that and really enjoy that.
26:45 AUSTIN: It’s crazy to think that the most popular shows are two hours an episode and you’d think that’s ridiculous, that’s a movie! People listen to the whole thing.
26:53 PAT: People listen to a movie a day.
26:54 AUSTIN: Yeah, they listen to a movie a day on podcasting. It’s actually unbelievable, but it is what the data is telling us, is that it’s active listenership, which is what pat was talking about. Don’t imagine someone just actually sitting there and listening two hours straight even. They’re doing other things. They might break it up a little bit throughout their day.
27:11 PAT: Oh, for sure.
27:12 AUSTIN: On their commute, on their way home, maybe they had a lunch break, but they’re finishing the whole show.
27:16 PAT: And they have the option to do that instead of with the radio, if they just lose their attention, they can’t pause it and get that back. That’s a fleeting thought that’s gone forever and that potential retention is completely gone.
And joe said something pretty interesting just now that I wanted to touch on too. So, the younger generation especially, they care about instant gratification, whatever. I think the reason that binging is such a prevalent trend though, is because people care about a quick indulgence of information. They want quick accessibility to information. I don’t think they necessarily just want instant gratification. So, if there’s a topic that interests them and they can access it super easily they’re going to… That’s the whole reason people binge Netflix documentary series. It’s the whole reason “making a murderer” is as popular as it ended up being.
28:00 JOE: And it’s on your schedule. Not somebody else’s schedule. You can listen to it anywhere, anytime that you want. Versus like radio or television things like that, you’re on their schedule. Versus now you could do whatever you want. You could listen to it, you could turn it off, you could fast-forward, like it’s all up to you at this point.
28:17 PAT: Yeah, yeah, exactly. And it shows in the data. 69% of people surveyed by MarTech show that podcast ads made them more aware of new products or services. Podcast ad revenue. Dude, I was looking at this chart, I was like this actually can’t be right. But I looked at… I’ve looked at a couple other sources too. This is from MarTech: as early as 2015, it was at 69 million dollars a year. 2018 is projected to be four hundred two million dollars in podcast ad revenue this year. Projected to go up to six hundred and fifty-nine million dollars by 2020. It is moving at the inverse… There’s an inverse relationship. There’s a negative r relationship between podcast ad revenue and radio ad revenue.
29:03 AUSTIN: Absolutely, yeah, it’s I mean it’s pretty much over for radio I’d say. So, we will say that I guess if you look at 2017 at least 90% of Americans 12 or older happen to come across radio, so there’s still people that are getting those. But we know that that’s a downward trend on a five-year span.
And then if we go and look at something along the lines of what an actual news station is pulling in, in terms of dollars and cents of the average station revenue by programming category, we’ve seen that slip multiple millions per year since 2010. They’re down to about 20 million per year on average. That used to be up around 25 million per year. That’s going down. Also, the total number of employees that these companies have is also dropping. That’s dropped well over about 1200 total over the span of the last about five to ten years. So, they’re losing an average of, let’s see here, 200 employees a year. Yeah, it’s what I’m seeing from the data perspective, pulled from 2017. Which is pretty significant if you think about your company losing 200 employees a year.
30:14 PAT: We’ve be at negative 140.
30:16 AUSTIN: And this is a big, this is a big…
30:21 PAT: Well that’s what the math, indicates right?
30:23 AUSTIN: And these are the big radio broadcasting networks that we’re talking about, that do still exist but it’s a scary number. People are being laid off because they’re just not making money. That means that they’re not getting ad revenue, like you were saying, because people are dumping those dollars in the podcast.
30:38 PAT: Well here’s a little insight – full disclosure, my dad works on the radio
30:44 AUSTIN: Hey oh!
30:44 PAT: Right? So, he has an evening drive time sports talk show. It’s an ESPN syndicated channel. They have transitioned most of their advertising efforts from on the air to online targeted at listeners. So, it’s not just that the effectiveness isn’t there, but it’s like they’re also trying to adapt and recognize that, and the fact that you don’t need to have these big sales pitches and get oh we’re agreeing to do like Acura Lasher dealership spot here, here, here, like whatever, it’s lowering the barrier to entry.
So, some people are losing their jobs as a result of the fact, simply, that there’s just not that many… There’s not as much of a necessity for it. So, the times are changing. They’re adapting to it a bit, but the ad… Like the direct ad revenue associated with radio surely is dropping and I think that’s because of some of those trends that we were talking about. But we weren’t… We don’t want to bash radio by any means. That’s not what we were talking about.
31:40 AUSTIN: I do. Specifically, I want to bash your dad.
31:41 PAT: You want to bash my dad? Lorne would kick your ass.
31:42 AUSTIN: Oh yeah, that’s his real name. But his stage name: Colin Cowhurt. Pat’s dad is Colin Cowhurt.
31:48 PAT: Yeah, I wish. All right, but why should you care as a business owner? Podcast? Extremely low barrier to entry. It costs almost nothing to get started outside of the equipment and the time. It definitely takes some time to get going. I know for us and our experience, it took a few episodes before we really started to hit our stride.
32:06 AUSTIN: Don’t start a podcast unless you want to face the wrath of us.
32:08 PAT: Yeah, exactly. And now we’re huge in this space.
32:11 AUSTIN: But, advertise with us because our listenership is massive.
32:14 PAT: Yeah, exactly. So now we’re big, big guys in the space, so don’t try it. Before it was easy. I’m just saying, but seriously…
32:22 AUSTIN: You’ve got a great point though.
32:23 PAT: It doesn’t cost a lot to get started.
32:26 AUSTIN: Imagine trying to start a radio station back in the day. You’ve got to deal with… I believe it would be the federal trade commission, right? Or something up along this line.
32:32 PAT: FTC
32:33 AUSTIN: To actually get a show on the radio…
32:37 PAT: FCC.
32:37 AUSTIN: Sorry, FCC and not FTC. I mean the barrier of entry was so high, like pat was saying for radio. And podcasting now anybody can start it and you might actually have an audience depending on what you do. So, for us we’re in the niche of digital marketing in San Diego and we’ve been able to gather a decent audience in San Diego because of that. Because people in this area are interested to hear who we’re talking to, these other business owners.
33:02 PAT: Yeah, a few hundred thou. We should be hitting a milli pretty soon.
33:05 AUSTIN: Yeah, that’s right. Get us when we’re cheap.
33:06 PAT: I think it’s pretty interesting too, that point you brought up. The barrier to entry isn’t just that it’s like, okay, yeah, there’s the FCC and there’s these big players. There’s also spots are limited. There’s only so many radio frequencies that exist. I remember when I was growing up there was one 107.9 the end, because it was literally the end of the dial. You can’t go any farther.
33:29 AUSTIN: That’s amazing.
33:30 PAT: Yeah, they played top 20 hits. Okay, low barrier to entry!
33:32 AUSTIN: What I was gonna say… We’re gonna wrap this up. Somebody… We will each give our favorite podcast. That’s… We should end this.
33:39 JOE: All right, I’ll go. “congratulations” by Chris D’elia. It’s basically Chris D’elia’s… He’s a comedian, if you don’t know who he is. And it’s his stream-of-consciousness, just kind of spewing and it’s really funny and he’s actually insightful. He’s very intelligent but he does it as a comedian and just the way he talks, things he talks about, and all the weird mannerisms and languages he creates through that process. By far my favorite. I’m a true baby. Chris D’elia, if you’re listening to this, I love you.
34:10 AUSTIN: If you need to laugh, seriously listen to that.
34:15 PAT: My favorite podcast is this one. It’s called “up first” by NPR. It’s basically all of the news that’s happening in the world that you need to know at a high level, crammed into 12 minutes. So, it’s literally the commute. It’s like for your commute. It’s really well reported. They use actual sound bites from these like interviews, or people, or things. It’s awesome. Definitely check it out if you’re trying to get a little bit smarter every day.
34:43 AUSTIN: And imagine that. What used to be your commute would be layered in with commercials and the traffic report. No more. Gone. I love the future. Okay, my favorite one (Pat’s was much smarter than mine) but I’m just gonna say it. “Pardon My Take.”
34:59 PAT: We were all thinking it!
35:00 AUSTIN: By barstool sports. Barstool itself, not a huge fan. I do respect them from their content output. They are the epitome–look them up–of 21st century content, because they pump all day. 24/7 you can find either their blog post or a podcast. They only do blog posts and podcasts and little video segments. And that’s what they do.
They’re just a content creation company. Their pinnacle of their whole entire company is called “Pardon My Take.” it’s a hour and a half long sports show. And it has completely revolutionized the way that people consume sports news. The reason being is that they’ve brought in a hunk of satire to a very dry space. So, think SportsCenter and everything that SportsCenter is… Just really funny. So, people that are actually having a good time talking about sports.
Because sports is a good time the average fan right here… I want to be entertained and that’s the reason I’m watching sports.
I am not studying sports to become Kurt Warner, who made it from the arena league to the NFL. No, I’m watching sports because I enjoy watching sports so these guys have done that. They’ve captured an audience. They are the ultimate rags to riches podcast and pretty much the culmination of the 21st century content. And how we, as millennials, enjoy content.
36:16 PAT: Couldn’t have said it any better myself. All right everybody that just about wraps things up for us here on episode 58 of Flip the Switch podcast presented by Power Digital Marketing.
Join our forum group. We have a forum on Facebook. It’s Flip the Switch podcast forum. Austin will approve you. We always post content, quizzes, just interact with you guys and see what type of content we you want us to bring you. Just like Netflix does to us.
But until the next episode, it’s been Pat Kreidler, Austin Mahaffy, John Saunders and Joe Hollerup signing off.