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It's the paradox of podcasting. The new technology, designed to let average Joes and Janes create and distribute homemade radio programs over the Internet, is too difficult for the average person to use. Despite hundreds of "how-to" files floating around the Web, even listening to podcasts is still a several-step process, requiring links to special "podcatching" software, checking the feeds, and then listening to the files with a separate MP3 player or on your computer.
Creating and distributing the podcasts -- while certainly easier than operating a radio station -- is no walk in the park either. So it's no surprise that the most popular podcasts so far are still aimed at the techie crowd, with names like IT Conversations and Daily Source Code.
Enter Evan Williams. He's the pioneer who started the blog-hosting site Blogger that helped to kick-start the Web-logging movement. With his new company Odeo, Williams and partner Noah Glass aim to build a one-stop Web site where the masses can find and subscribe to podcasts, and create new podcasts with ease. Odeo will then help match advertisers to the newly created podcasts or let podcasters charge a subscription fee to listeners.
NEW BOOM. Odeo plans to make money by charging users to create the new podcasts and by taking a portion of the advertising or subscription revenue. But with no established business model, and primarily amateur broadcasters providing the content, one question remains: if Odeo podcasts it, will advertisers come?
However, there's no doubt podcasting is growing fast. Feedburner, a research firm that tracks podcasts, has seen a 25-fold increase in the number of podcasts available since November, 2004, -- a trend that has led some tech observers to compare the boom to the proliferation of Web sites during the early days of the World Wide Web. "It took years for blogging to reach the level of awareness that podcasting already has," says Williams.
But those who follow the technology are still waiting for a true "killer app." "There really isn't a mainstream way to [create] downloadable podcasts," says Scott Kessler, director of Information Technology Equity Research at Standard & Poor's. But once that's accomplished, Kessler says, the bigger question is how to convert podcasts from a high-tech hobby into a lucrative business. No advertising networks now exist, and no accepted system is in place for podcasting, in the way that Google's (GOOG
) Adsense program works to put relevant ads next to any piece of text, or in the way ad network RonningLipset sells ads for Internet radio.
"THE WRONG PLACE." Williams concedes that his business model still needs tweaking. The site is in early beta testing, and when it debuts for a public test next month, he and Glass will wait and see how people use the service before deciding how much to charge podcasters or what percentage of subscription or ad revenue it will take.
Creating hosting sites like Odeo for a brand-new technology is nothing new to Williams. In 1993, just two years out of college, he started Plexus, a Web site-hosting company. While the industry boomed around him and startups in Silicon Valley made millions, his company quickly failed. "Really, it was the wrong place at the right time," says Williams. Plexus was based in Nebraska, where he grew up.
But in 1999 (after having moved to San Francisco), Williams found success with a new company called Pyra. While he and his team focused on building a sophisticated piece of project-management software for Web developers, they also created a simple Web tool called Blogger to help keep track of their own progress. In August, 1999, they made Blogger available for free, as a program that would help developers easily update Web pages.
"GREAT OPPORTUNITY." "We thought of [Blogger] as a little side project," says Williams. "It would be a loss leader to get people into our other tool." While the more complex tool had only marginal success, the user-friendly "little side project" took off. Soon it became one of the most popular sites on the Internet for people who want to start blogs. In 2003, Google acquired Pyra for an undisclosed sum.
Now, Williams and Glass are out to make Odeo the user-friendly destination for podcasts. Other hosting services do exist, like libsyn.com (for Liberated Syndication), but Williams says Odeo will be the first to act as a directory for listeners, too, as well as the first that will help podcasters sell their content, either through advertising or subscriptions.
"I think there is a really great opportunity here," says Chris MacDonald, director of legal affairs at the Association of Music Podcasting in Washington, D.C., a "podcast union" of 23 podcasters that helps get permission from small indie labels and musicians to play their songs. "You as a podcaster on your own are negligible" says Macdonald. He sees associations like his working with Odeo to broker ad deals. So far, Odeo is in initial talks with major corporations and Internet ad networks to work out agreements, though Williams declines to identify which ones.
Of course, wooing advertisers means delivering listeners, and Odeo may be too young to generate much interest. Williams can always follow the same path he did with Blogger -- sell out to a name-brand Internet company. But Odeo is still in beta, and podcasting is just getting ready for prime time. By Burt Helm in New York