The Interactive Advertising Bureau’s mid-2020 study reported a 15% drop in advertising growth compared to pre COVID-19 projections, based on self-disclosure by companies. However, the year-on-year growth was still expected to be positive compared to 2019. This was further enhanced by Omnicom Media Group's announcement in July 2020 that it would spend US$20 million in advertising on podcasts distributed by Spotify during the second half of the year.
With both advertising revenue and listenership taking a hit especially as we entered the second quarter of the year, podcasters worked to diversify their streams, specifically audience-based revenue. Patreon reported over 30,000 new creators signed up for the service in the few weeks of March alone, and announced a US$90 million round in funding in September.
US-based podcast network Relay FM, for example, introduced show-level membership for flagship shows such as Connected and Upgrade in addition to their already running company-wide membership, while the Accidental Tech Podcast introduced audience membership for the first time in its 400 episode history. Jordan-based podcast company Sowt introduced their membership program ‘Sowt Plus’ with the option to pay up to US$8 monthly to support their content.
Consumers in the region though are typically reluctant to pay or subscribe to content behind a paywall. 54% of listeners said they wouldn’t pay for any bonus content, while 51% of those willing to pay said they would pay $1 monthly, setting a low bar for content-based revenue.
Advertising will not remain a sustainable income for creators, which will require more robust monetisation plans to cover production costs, which is why platforms are looking to silo their content. I believe the fundamental nature of RSS podcasts will eventually change for the benefit of the creator; Subscription Audio on Demand (SAoD) and Transactional Audio on Demand (TAoD) models will further emerge.”
While advertising revenue is projected to bounce back and hit the US$2 billion target that was expected for 2020, exploring alternative revenue streams will continue to be an important challenge to tackle over the next 24 months.Next: An Exclusive World >