May 2005

Podcasting - Opportunity or threat?

Podcasting - Opportunity or threat?

Over the past few months, podcasting has been getting the kind of news coverage that satellite managed earlier but without the same public relations effort to achieve this and there has been much speculation as to how it will impact on radio.
Our view is positive: It's an opportunity. Whereas satellite radio is clearly a competitor for terrestrial radio revenues, podcasting is more neutral - it may well cut listening to a degree to terrestrial output but like Internet radio it can also add new listeners and potentially also new revenues. So what do we think will be its overall impact.

A plus if radio is good enough.

Our answer is that for some stations podcasting will definitely be a plus but that will depend upon the station to a very large degree.

We don't see podcasting in any significant way replacing the output of a local station and where a local station is producing a good local output tailored to its audience we don't see other competitors including satellite and Internet audio replacing it although they could well eat into audience and advertising revenues to a small degree.

Let's flip the viewpoint, however, and if a station can handle it efficiently we see podcasting as potentially adding to that audience and also being able to add to revenues, although the latter will be more easily done by the bigger media groups who will be able to offer specific advertising and sponsorship packages of a scale that small stations cannot match.

There are of course potential problems, particularly that of music copyright - an issue that has also affected Internet streaming but overall we think that they can potentially be overcome, especially as technology develops to time-limit the storage of a podcast, something the BBC, for example, is developing with its Internet Media Player for TV.

What is essential for a station podcast?

Like any other media a radio station has to produce something that interests people and the starting point for a podcast in that sense is the same as programming in general.

If the programming is good, there is likely to be interest beyond the local to some degree and, like other existing media when it came to the development of the Internet, stations start off from a point where in theory they should be able to use their experience to grab much of the audience rather than it going to newcomers.

The reason they haven't done so in our view is down considerably to the fact that they didn't really regard streaming as important for far too long and by the time they did, the newcomers had gained a firm foothold especially as means of aggregating audiences for sponsors and advertisers were developed.

With podcasts they have even more of an advantage if they get their act together but so far stations, with a few notable exceptions, have not in our view assessed this as sufficiently important.

So what could a station do? Even if we assume that for the moment music shows are out of range for copyright reasons - and stations should be working on this issue now - other formats have a number of options.

Cheap and Cheerful - MP3 posts only.

They can go the cheap and cheerful way and avoid full podcasting but use suitable software to produce MP3's of selected existing locally produced shows that do not have copyright problems and post these on their web sites.

They can work on the basis that people from their locality who are out of the area may well have an interest in a round-up of local news, information and events and produce a special show to post on the site if they don't air such a show.
They can use station resources to advertise and post suitable "submission" criteria on their web sites and get listeners to send them audio that they can then put together and post on the site, thus creating an interest from both groups who want to get their point over and also to listen to local news and information.

Podcasts as such.

All the above can of course be converted into "proper" podcasts that listeners get automatically downloaded onto their computers but this requires a little more effort although it will increase listenership and also provide statistics that are of value in attraction potential advertisers or sponsors.

We would also suggest that, in the way that organisations like LIVE 365 offer an Internet streaming service, it won't be long before similar podcast services are easily available to the amateurs: Stations we think shouldn't wait for this but should get into consideration now of some kind of properly constructed industry web site rather than each organization going it alone.

If properly set up as an independent body with firm rules, there is no reason why the giants can't co-exist with the minnows on a site that provides a searchable database of what is available, thus potentially increasing the audience for all.

So what does the above offer listeners and advertisers or sponsors?

We think there is a useful and saleable package here that with a full podcast combines a fairly firm indication of who is listening with a local tie-in that means advertising or sponsorship, assuming some form of "aggregating" system is used a way of offering a useful outlet to national advertisers - including, if a show's listeners match the desired profile, those like Durex who could not offer the same advertising on a broadcast station - and also to local businesses. The range is, of course, considerably extended, if music can be included.

So what about music?

The objections of copyright holders are in our view often overblown but have a foundation of justified fear of piracy. That in our view could easily be taken care of by the use of time-limited downloads and indeed could even be a plus for recording companies if this were done in that the podcast could be constructed to offer links to sites to purchase music that is wanted when the time limit expires, probably with reminders.

Over then to the radio companies to develop or licence the technology to do this - it is after all only a minor extension of what some are already doing in offering the facility on digital signals to purchase songs.

A positive conclusion.

Balancing out the pros and cons we come down firmly on the positive side for radio. Podcasting like other downloads that can go onto portable digital players may well form an alternative to listening live to radio but like making radio programmes available on-demand online radio has the opportunity to pitch in and grab much of that listening.

If we assume the professionals do have qualities the amateurs don't - and amateur podcasts allow a way of checking on development and offer an opportunity to hire talent if it's good enough - they ought to be able to produce audio that's able to out-compete most of the competition.
In addition, because stations have a built-in local resource and can promote their podcasts there's an opportunity to use podcasting to both gain
more involvement with listeners and to attract sponsorship and advertising.

Seems to us the edge is with existing radio stations if they're good enough to take the opportunity. Podcasts will in any case never replace live radio when there's an emergency or for news but they could add to a station's audience, enhance its relationship with listeners and the community, and boost its income a little.

What you think? Please E-mail your comments.

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