Will NPR's podcasts birth a new business model for public radio?

Last summer, the folks running National Public Radio started to get a clear message from their listeners and member stations: Give us podcasts! They received e-mail requests from listeners for months, and the term “podcast” was one of the most searched terms on NPR.org. The public spoke, and NPR listened, launching podcasts on Aug. 31.

Talk about pent-up demand. According to Maria Thomas, vice president and general manager of NPR Online, it took only six days after launch for NPR’s “Story of the Day” podcast to reach the coveted No. 1 spot on iTunes for most downloaded podcast. On Nov. 21, NPR’s podcasts held down 11 spots on the iTunes Top 100, more than any other media outlet.

But NPR has done much more than simply repurpose its own material for podcasts. The radio giant is hosting podcasts for member stations, and selling and splitting underwriting revenues with them. Plus, it’s launched three original podcasts under the new alt.NPR brand as an incubator for edgier content.

In a wide-ranging interview on NPR’s podcasting initiatives, Thomas told me that there were two driving forces for NPR: listener demand for portable audio, and the chance to find a new business model for working with stations. Previously, NPR’s income was split evenly from fees paid for content by member stations (who raised money from pledge drives), and corporate and foundation underwriting spots. Podcasting gave NPR a new model for selling underwriting, and sharing the proceeds with stations.

“We are actually working with a subset of stations that are providing audio to us, and we’re organizing that audio in a central database, so we can put consistent inventory units around the audio,” Thomas said. “And we would sell those inventory units to underwriters, and if we are successful with that, we would share that revenue with the stations. That’s a different model than what we have on the radio. The whole principle is that we’ll have to act differently on these new platforms because the model we have on the radio might not work in this world — but we have to be in this world.” At launch, NPR already had sold underwriting to Acura as a premier podcasting sponsor.

So what makes NPR’s podcasting a different animal? Rather than just offering podcasts of entire NPR radio shows, the most popular NPR podcasts have been “best of”-type offerings by topic. For instance, podcasts such as NPR Movies, NPR Technology and NPR Music take content from various radio shows on the same topic. That way, it’s easier to sell to underwriters interested in a particular topic.

On the news side, NPR has had success with its nightly podcast wrap-up of hearings on the John Roberts Supreme Court nomination, and will repeat that with the upcoming Samuel Alito hearings in January. The NPR podcast directory now includes 174 podcasts (including those of member stations). Thomas says the original 17 podcasts it offered from the start have been downloaded more than 5 million times.

The importance of original content

While a lot of Big Media companies have jumped on the podcasting bandwagon, much of the content is simply repurposed material from offline programming. While NPR has done that with most of its podcasts, the alt.NPR brand is a chance for NPR to look beyond the usual fare. The first three offerings for alt.NPR include a commentary on the gambling world by NPR reporter Mike Pesca, downtempo electronica music from independent Net radio station SomaFM, and a selection of the best young public radio producers on Public Radio Exchange (PRX.org) called “Youthcast.”

These three mark different approaches to podcasts for NPR — one being from an in-house reporter, one being an exploration of new music, and another taken from PRX, which has worked with NPR before. SomaFM receives a freelance production fee from NPR.org, while PRX will share revenues from underwriting that NPR sells. Thomas considers this as an experiment for NPR, which will release more podcasts after it gauges the success of its attempts so far.

“If we’re going to make it on the portable platform, we have to act differently,” Thomas said. “With podcasting, we’re acting like producers and seeking new voices but at the same time we’re working cooperatively with stations to find a way to help all public radio become more meaningful, which is something we didn’t accomplish in the first 10 years of the Internet.”

So what type of content works best for podcast listeners? Thomas believes that shorter content has been more popular, perhaps because people listening to podcasts are multitasking and don’t have the attention for long-form content. A case in point is the “Story of the Day” podcast, which runs from four to eight minutes, highlighting the editorial pick from NPR as the most important and unique story that NPR produced that day. Because it has occupied the No. 1 slot at iTunes for so long, Thomas believes it might be the most downloaded podcast ever.

Kris Jacob is vice president of business development for PodShow, the venture capital-backed startup from “podfather” Adam Curry, which is aggregating podcasts into an ad network. Jacob told me that repurposed mainstream content might bring in a larger podcast audience of consumers, but that podcast listeners in general like the close bond they feel with independent productions.

“The fundamental mistake that media companies, large and small, make is that they adopt the model but not the philosophy,” Jacob said. “They look at things as the adjunct to the core product that they’re providing, and not as a fundamental shift in the way that they are creating media itself. … What listeners tell us is that mainstream programming converted to MP3 files and redistributed and called a podcast is interesting to a point, but it’s not what they are really compelled by. What they are compelled by is unique independent niche programming that appeals to them and allows them to develop a relationship that they can’t forge with mainstream programming.”

Rusty Hodge, SomaFM’s founder and general manager, agreed that shovelware wouldn’t cut it for podcasts, and that the democratizing effect of so many new voices emerging was much more important.

“The most interesting content on the Internet has not been repurposed content from somewhere else (which we’ve all heard already), it will be that content that didn’t have an outlet before,” Hodge said via e-mail. “I think that NPR is using the alt.NPR podcast project as an incubator, to try out new content and explore areas that they don’t have the space to do over the air.”

PRX has been running its own podcasts culled from all the radio pieces people submit to PRX. (PRX acts as a non-profit intermediator between independent producers and public radio stations and networks.) Plus, it released Pubcatcher, a free podcast tool for public radio stations to use on their sites. Jake Shapiro, executive director of PRX, told me that podcasting might bring a new generation of talent into public radio.

“I have high hopes that out of this wave of energy around podcasting, with all of these people trying to become audio producers, that a bunch of them will emerge as truly talented new voices that will bridge into radio,” Shapiro said. “It doesn’t have to be either/or [podcasting or broadcasting]. My hope is that podcasting does identify a whole new rising generation that is producing a different sound with different ears and that public radio will embrace them.”

The challenges and potential of podcast ads

As for making money or getting underwriting for podcasts, everyone agrees that there are a slew of issues to iron out — though there’s a lot of potential. First off, anyone who sells advertising usually has to have metrics on the audience: who is listening, how often do they listen, what’s the demographic of listeners. These remain a mystery for podcasts, because there is no current way to track who actually listens to podcasts. Just because you subscribe to a podcast, doesn’t mean you upload it to your MP3 player or listen to it.

NPR.org’s Thomas admits that this is an initial problem, but she said she hopes to get listener information when technology companies can solve the metrics issue, as long as it doesn’t invade personal privacy.

Along with the measurement dilemma, there’s also bandwidth costs to consider. The more popular your podcast is, the more it costs to support downloads. Thomas says NPR.org has already been serving streaming audio for some time, so it could negotiate good bandwidth deals with vendors.

“We went into this business with eyes wide open because we’ve been streaming audio — lots of it — on NPR.org for nearly a decade,” Thomas said. “We did a lot of work upfront, pushed hard on vendors and [did] estimating and scenario planning. Frankly it helped shape our content offerings. We’re keeping it shorter not just for the user experience. I’m not at all convinced someone wants to listen to two hours of ‘Morning Edition’ on an iPod. You’re penalized for success, but we’re trying to build an infrastructure that supports a business.”

Another issue is the intrusiveness of ads on podcasts, a medium born out of people’s frustration with the ad-saturated nature of broadcast radio. So far, most podcasts have toned down the commercialism, and tried to use more low-key sponsorships and spots voiced by the host. NPR has an advantage because it is already well versed in using less intrusive ads in its radio and Web programming.

Thomas told me NPR would only do one “gateway” sponsor ad for 12 to 15 seconds at the beginning of podcasts, along with a three-second closer at the end. For podcasts less than 30 minutes long, that would be the limit. For longer podcasts, NPR is experimenting with a sponsor ad in the middle of content. Host-spoken ads would likely only happen in entertainment offerings — not in news podcasts.

PodShow’s Jacob says the potential for advertising in podcasts is “absolutely huge.” But rather than repurpose radio ads, advertisers and ad agencies will have to get more creative, and collaborate more with the audience.

“The research we’ve done indicates strongly that the listeners are interested in interesting advertising,” Jacob said. “They don’t want the same thing they’re getting in the mainstream. They want to participate in that process. That has to do with context, with host involvement, and it has to do with the advertisers, the agencies, the buyers and [PodShow] all being very creative about how we do this, and listening to the response.”

While Madison Avenue types are swarming over the prospects of ads in podcasts, the typical DIY podcaster shouldn’t expect to get a windfall profit anytime soon. SomaFM’s Hodge says that it’s hard, but not impossible, to make a living doing independent podcasts. Though SomaFM has been going strong since 1999, Hodge still has a day job running Internet operations for a computer hardware maker.

“If you start by saying, ‘I’m going to start a podcast or Net radio station and get rich,’ you’re on the wrong footing,” Hodge said. “It takes a long time to get established, and it will be a lot of work to become successful. But I know some folks running Net radio stations who are mostly supporting themselves from it. They’re not getting rich, but they’re making an OK living. And you’ll have to really hustle as a salesperson if you’re going to get sponsors (or donors for that matter). You can’t just sit back and expect the money to come to you.”

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Farewell to OJR

This column is my last one for OJR. It’s hard to believe, but my first column for the site was in September 2002, more than three years ago, reacting to the launch of Google News (which is still in beta). The column has gone from blog-like babble to deeply reported opinion pieces, and I thank all my editors along the way for their guidance. Also, I appreciate the support of the USC Annenberg School for Communication, and hope that OJR continues to be an indispensable place for news and views about online journalism.

I will be spending the holidays working on a book — more of a memoir than a treatise on new media. Then in January, I will be launching an exciting new project for PBS.org that I’m sure you’ll hear more about. To all my readers: Thanks so much for your feedback and for sticking with me. Have a healthy and happy holiday season!