These are heady days for wannabe radio stars. Only 17 months old, podcasting -- the technology that makes it easy for people to post audio recordings on the Web -- is stirring the creative juices of individuals around the world who are eager to dish up shows on everything from yoga to Nascar. Though it's difficult to track how many podcasts there are, Apple's (APPL) iTunes alone lists 20,000 shows. And the number is expected to rise.
While the excitement around podcasting is clear, the landscape for indies looking to make money is anything but. In the earliest days, solo podcasters were able to sign up paying sponsors. Pioneers such as wine podcast GrapeRadio, athletic training show EnduranceRadio, and the eclectic music podcast Coverville, made cold calls or were lucky enough to be contacted directly by marketers.
MANY WAYS TO ALLY. But as the popularity of podcasting grows, traditional media companies are swiftly elbowing into the market (see BW, 11/14/05, "Searching for the Pod of Gold"). And they start with big advantages, including name recognition, marketing muscle, and big customer bases that advertisers adore.
As a result, indie podcasters are forced to consider what may once have been unthinkable -- banding together. Until recently, most indie podcasters looking to make money could remain on their own. That's changing fast. Aggregation is the best way for podcasters to attract audiences and advertisers, analysts say.
There's a growing number of ways to forge alliances. A handful of startups, including Podtrac Inc. and Kitpronic Inc., are creating services aimed at matching advertisers with podcasters and placing ads within shows. And some podcasts, such as the popular This Week in Tech show, plan to create their own network of spinoffs.
"RELIABLE NETWORK". Even established new media giants, such as Time Warner's (TWX) AOL and Yahoo! (YHOO), have launched podcast aggregation services that are a foundation for selling shows and ads. There will be Google AdSense-like services that are used across a network of thousands of podcasts, and then tight, hand-built networks, such as Weblogs Inc. and Gawker Media. "Networks are the right way to do this," says David Card, an analyst at JupiterResearch. "Unfortunately, there are likely to be a cagillion networks, and that could make it hard to stand out."
That's the issue that Adam Curry, the podcast evangelist, and colleague Ron Bloom are tackling with their startup, PodShow Inc. The duo is creating a multitier network of podcasters that features a small, select group called the PodSquad. PodShow has 18 podcasters in the PodSquad and is in talks with 30 more. Curry and Bloom expect the PodSquad tally to rise to 100 within 12 months. Using an investment of $8.9 million raised in August, PodShow execs have pulled together different pieces to create the network. They are melding together the various services they helped create, including the iPodder.org and Podcast Alley directories, which list over 12,000 shows.
Curry and Bloom have released tools aimed at helping people create and publish podcasts and are working on advertising tracking technology. They have signed contracts with popular podcasters, including the Dawn & Drew Show and the MommyCast. This network attracts nine million listeners, estimates Bloom, PodShow's CEO. "What we're building is a very reliable network of great podcasts in every category that advertisers can dip into," says Bloom.
GOING WITH IT. Curry's epiphany came late last year as he was pumping out updates of his Daily Source Code podcast. Initially, he talked just about the technology around podcasting. But increasingly bits of his life crept naturally into the show. And as Curry began talking about such subjects as flying, raising a teenage daughter, and music rights, he also noticed how other people were talking about more than just technology on their podcasts -- how they were using it to communicate about their passions. He called Bloom, a longtime business partner and ex-media industry exec, and after a pow-wow in Miami, Florida, the two set about putting together plans for a podcast network.
The idea is that by creating a network with popular headliners, PodShow will stand out and attract scores of listeners as well as advertisers. For podcasters, the incentive to work with PodShow is multifold, says Gretchen Vogelzang one of the two hosts of MommyCast, which has a three-year contract with PodShow.
In exchange for a split of revenue, PodShow directs advertising to podcasters and provides them with services, including hosting and tracking. Thanks to PodShow, Georgia-Pacific's Dixie brand on Nov. 14 signed its first podcast sponsorship with MommyCast. "We are to PodShow like Lost is to ABC," says Vogelzang. "We looked at it as a wave, and we're just going to go with it and see where it goes."
RISING COMPETITION. And PodShow can help an up-and-coming podcast catch a big wave, thanks to Curry's rock-star status in the community. Curry's own shows, the Daily Source Code and PodFinder, run on satellite radio and are featured in iTunes. Curry is one of the creators of podcasting technology and being mentioned by him on a show can help build up an audience for a new podcaster. Now PodShow is furiously working to pull together its stable of top podcasters. It's working with talent agents to help pinpoint candidates.
Competition, though, is already emerging. Brian Ibbott, the host of Coverville, recently signed with BackBeat Media, an ad representation firm based in Austin, Tex. He doesn't see a fit for his podcast with some of PodShow's rawer offerings, including the Daily Download Poopcast and Dawn & Drew, a sometimes raunchy show produced by a couple in Wisconsin. "I like Adam and the things he's done for podcasting," says Ibbott, "But I don't feel like my show would go with the cadre he has lined up in PodShow."
And the competition is just beginning. "What's to stop someone else from coming out who know certain ad agencies better?" says Rob Walch, a podcasting consultant and host of the popular 411 interview podcast.
MOST WON'T BREAK EVEN. The bigger question may be: Just how much money will there be to go around? Mark Kvamme, a partner at Sequioa Capital, one of the PodShow's investors, is bullish and thinks that in three to five years, $1 billion to $2 billion of the $30 billion spent on audio advertising will move to podcasting. But while some marketers are venturing into podcasting now, plenty of ground work needs to be done on tracking basic listening patterns and how the ads perform.
And while a lot of podcasts have been created, only a small percentage of the online audience are regular listeners, analysts say. A recent study by Bridge Ratings, an audience measurement service based in Glendale, Calif., estimates that 4.8 million people have downloaded a podcast this year.
Walch says he's bombarded with questions from people looking to strike gold with podcasts. His advice? "I tell people that over 80% of podcasters will never even break even," he says. "This is a hobby. You don't expect to make money from flying model airplanes, and chances are you aren't going to make money from podcasting." Still, for trailblazers like Curry who are quickly forging links to one another, it won't be for a lack of trying.
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Green is BusinessWeek's Internet editor in New York
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