Podcasting’s Pickle, Apple’s Indifference

Last week, the New York Times published an article about Apple’s indifference toward the podcasting marketplace’s need for more and better data. It’s a very interesting read that spawned several other articles, and lots of discussion. At issue is the fact that Apple, having basically birthed the podcasting industry back when it was primarily selling non-connected ipods and wanted downloadable content to drive those sales, holds the keys to the best data on listening, but doesn’t share that data with content providers.

There’s some debate among podcast platforms as to whether the data is important, but most of the larger companies driving revenue in the industry understand that there’s a need for uniform standards and measurement that’s verified by a credible third party measurement service. In the streaming industry that’s Triton Digital’s Webcast Metrics, which is accredited by the Media Ratings Council. Ad Agencies thrive on that data, and the amount of revenue that will flow into podcasting will be limited until it exists.

Apple’s iTunes has the largest share of listeners of any podcast platform, so getting them on board is important. However, the financial incentive for Apple to provide data is limited. They drive lots of traffic to podcast content through iTunes, and sell devices that access that inventory. They don’t make any other money from podcasts. In his recent take on the industry, Nick Quah referred to Apple as an “indifferent steward” of the podcasting industry. But, some say, Apple has a soft spot for podcasting that may spur them to help the revenue side of things grow.

I think the idea that Apple will assume a benevolent protector role toward the industry and start sharing data so others can make money is wishful thinking. If they start sharing data, it will be because they are going to monetize it, as in the App Store model where they get a piece of anything sold through their apps.

One interesting and relevant side note: a few weeks ago, Apple invited some folks from the industry to a little round table at Apple HQ. Apparently, that select group, which included a kind of quirky selection of businesses, got an audience with a group of Apple people who then met with Cue after the meeting and gave him the run down. It all happened under Apple’s typical cloak of silence, so there’s not a lot that we know beyond that. I don’t think anyone came away particularly hopeful that data will start gushing their way.

Whatever Apple does, it will be because it’s the best thing for them. And I do think they have to do something. Lately Spotify, Pandora, Audible (Amazon) and Google (Google Play) have all jumped in to the podcasting pool. This year iTunes’ share of podcast listeners is down from 70% to 65%. I’m sure that 5% drop in one year got Apple’s attention. Any or all of those other services could decide to make the water a little more enticing for podcast producers and start to grow their audience, maybe with exclusive opportunities for podcasters who align with them. The podcast industry is at this point eager to see iTunes’ dominance dissolve.

No doubt Apple is remembering their misfire on streaming music. When the company started selling iphones, Pandora jumped on the opportunity early and quickly became one of the most popular apps in the App Store. In fact, Apple actually featured the Pandora app in a television commercial for iphones early on (there’s an app for that!). Last year Apple finally launched their own streaming music service, which has a fraction of the number of subscribers that either Spotify or Pandora have. However, Apple took a really long time to launch its service, and along the way the iphone helped Spotify and Pandora get a very strong foothold in the market.

Data or not, the best thing that could happen for the longterm prospects of the podcast marketplace would be for iTunes’ share of listeners to continue to drop. It’s already happening – Apple’s dominance is dropping while the marketplace is expanding. Last year iTunes lost 5% of the listener share while the marketplace grew almost that much – according to Edison Research, weekly listening grew from 10 to 13% of the 12+ population, while monthly listening grew from 17 to 21%. Maybe that’s enough incentive for Apple to start turning over some data…

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