This was the title of a session last Friday at the virtual Advertising Week conference. Steve Ackerman from Somethin Else and Susie Warhurst from Acast were supporting the motion, with me and the brilliant Angie Greaves from Smooth arguing against.
The vote beforehand went 55% in favour of the motion, and the vote at the end was 65% in favour, so Angie and I were comprehensively robbed beaten, but anyway I thought I’d share with you my speech - You can judge for yourself if my argument carried any weight.
I should say I love podcasting, and in the real world of course, radio and podcasting feed off each other in a generally mutually beneficial way. But, when you’ve got to defend your corner, you need to put your gloves on and come out fighting....
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Radio in the UK today is a billion hour a week industry - 50m people listening for around 20 hours each. In contrast, both OFCOM and rajar suggest podcasting only has around a 9m adult weekly reach - listening to around 7 or 8 hours worth of podcasts each. Let’s be generous and round all of that up to 100m hours a week of podcasting consumption - so even being generous, right now podcasting is at most only 1/10th the size of radio.
But the growth is in podcasting - and I’d expect podcasting to grow to be something enjoyed by around half of the population within 5-10 years. So a tripling in reach. I doubt it’ll get beyond that - complex apps, multiple play out options, difficulty in discovery, and unreliability of output, is just a bit too much faffing about for universality - but 50% reach feels doable.
Let’s be generous again and assume a tripling of reach means a tripling of total hours listened (it won’t be more - the keen early adopters are already there). So, that current generous 100m hours might get to 300m hours. And maybe half of that growth - 100m hours of it - might come from substituting radio listening with podcast consumption, with the other 100m hours growth coming from these new podcast consumers listening to pods in new locations where radio traditionally couldn’t get to you - out walking, on public transport etc.
So in this scenario it will still be 900m hours for radio each week vs 300m hours for podcasting. So radio will still rule for audiences with a 75% share.
Onto revenue. Commercial radio in the UK is a £600m a year ad-funded business. BBC radio takes £600m from the licence fee - so total funding for radio in the UK is c £1.2bn p.a.
The current best estimate for total podcast revenues in the UK is £10m-£20m p.a. So podcasting revenues are at most around 2% of radio. The US is similar. There’ll be growth there - both in terms of bigger audiences attracting new advertisers etc - but although cpts are higher for podcasts, ad loads are much lower, and given your ability to skip ads, that isn’t likely to change.
I won’t bore you with the calculations, but my best estimates for revenues in a mature podcast industry in the UK leads me to estimate £150m per annum in five years - so as with listening, podcasting can’t win the revenue war.
Finally, let me give you the killer reason why radio will always dominate commercially - immediacy and impact.
To pick just one commercial category as an example, let’s say I’m a movie distributor, and I have a new film out this weekend, I can buy an ad on Friday morning’s Newslink, then a spot in every break on Heart, Capital, Smooth, Magic, Absolute, Kiss and Classic - and know tens and tens of millions of people will have heard my film being mentioned multiple times on the very morning of its release.
That level of instant, live mass communication, delivered in a timely manner and designed to elicit a mass response, is way beyond anything podcasting will ever be able to do - even with dynamic ad-insertion. The key benefit of podcasting - the fact that I can listen when I want and am not time-constrained by the content - is its very downfall as an ad-funded medium. That’s not to say podcasting can’t be useful to some advertisers, or that it can’t find other sources of funding, and I’m sure it will, just not at the expense of radio.
Breakfast TV didn’t kill off radio, neither did the internet, nor did Channel 4, Channel 5, Sky, or MTV or youtube or a 101 other lazy buggles headlines.
I think we’re safe too from being killed off by podcasting.
