View
114
Download
0
Category
Tags:
Preview:
Citation preview
3
Executive Summary
• Digitization of media continues; news and talk radio beginning to bedisrupted by emergence of podcasting
• Podcasting market is estimated at ~$90M in 2014, and is expected togrow at ~24% annual growth through 2020
• Individual podcasts can succeed through a combination of factorswhich have been leveraged by popular podcasts
• Podcasting economics potentially appealing
• Competitive landscape shows that content producers likely to see thehighest margins while aggregators and distributors see highest volume
Investment opportunitiesContent: Invest in producers w/ top talent
Aggreg/Distributors: Invest in Distribution networks
4
Digitization is causing significant changes across medialandscape
Traditional Digital
Shift from in-storepickup to on-
demand mail-in andstreaming modelV
ideo
Shift from real-timeTV viewing to on-demand TV, and
streamedproductionsTe
levi
sion
Shift from real-timeradio and physical
CDs to digitaldownloads and
streaming
Mu
sic
5
Disruption now impacting talk/news/public radio, wherepodcasts emerging as a new format
Traditional Digital
Shift from real-timetalk radio to on-
demand downloadand streaming model
New
s/Ta
lkR
adio
6
Podcast searches have increased over time, with topplayers like Serial fueling recent spikes
0
20
40
60
80
100
Indexed google searches within "Radio" category
Radiolab
Podcast
Serial
2010
-01
2010
-07
2011
-01
2011
-07
2012
-01
2012
-07
2013
-01
2013
-07
2014
-01
2014
-07
2015
-01
Invisibilia
Planet Money
Source: Google Analytics
8
Podcasting has grown by ~25% over the last 5 years;growth expected to stay fairly consistent into 2020
0
100
200
300
400
0.0
0.1
0.2
0.3
0.4%
Estimated podcasting market spend ($M)
2010
43
2011
53
2012
58
2013
75
2014
90
2015
133
2016
167
2017
207
2018
256
2019
318
2020
395
25%
10-15ECAGR
24%
15E-20ECAGR
24 2422 11 29 19 48 25 24 24Y/y % marketgrowth
11 25 2713 13 15 18 20 21 22 24Average CPM ($)
26 91 10232 37 43 51 59 66 74 82Digital mediaspend ($B)
Share of digital media spend
Podcasting spend
Share of digitalmedia spend
Note: CPM price change estimated by applying change in Cost per Loyal User Index (measures cost of acquiring a loyal user for brands whoactively market their apps) to 2015 CPM costSources: CPM: Multiple press sources; Pricing change: Fiksu and Interactive Advertising Bureau
PRELIMINARY
9
Listeners have grown by ~8% over the last 5 years,while listens have grown by ~11%
Notes: Listeners: Using average number of weekly listens per Edison Research, assumed that: existing users listened to 100% of those listens;new users listened to 50% of those listens; older users listen to 25% Average listens: Assuming listen 4 weeks per month; 10 months per yearSource: Edison Research; US Census
NUMBER OF PODCASTLISTENERS
AVERAGE LISTENS PERLISTENER TOTAL PODCAST LISTENS
Assumed for2010-13
PRELIMINARY
10
Under select scenarios, podcasting space could stayrelatively flat, or hit over 40% US penetration
0
200
400
600
800
1,000
Estimated podcasting market spend ($M)
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
25%
10-15ECAGR
48%
24%
2%
15-20ECAGR
24 2422 11 29 19 48 25 24 24Y/y % marketgrowth
11 25 2713 13 15 18 20 21 22 24Average CPM ($)
0.17 0.35 0.390.17 0.16 0.17 0.18 0.23 0.25 0.28 0.31Share of digitalmedia spend
Base
High
Low
Note: CPM price change estimated by applying change in Cost per Loyal User Index (measures cost of acquiring a loyal user for brands whoactively market their apps) to 2015 CPM costSources: CPM: Multiple press sources; Pricing change: Fiksu and Interactive Advertising Bureau
Base
12
Podcasts have acquired listeners through several routes
Personality • Podcasts can grab initial share of viewers with well-knownradio personalities or celebrity hosts
Cross-promotion
• Featured segment of newer podcasts on popular podcastshas helped drive listeners to the new podcast
SocialMedia /Buzz
• Social media and buzz playing a more significant role indriving podcast growth
TraditionalMedia
• Discussion of podcasts in more mainstream media outletsdraws in newer listeners who may not have listened topodcasts before
Listpositioning
• Presence in the iTunes top 10 list has been significant factorin building listener base
13
Acquisition routes of recently successful podcasts
Fastestpodcast
in iTuneshistory toreach 5M
listens
Launchedin Top 5
of iTunes,remainsin top 40
Launched in fallof ‘14, about aa journalisticinvestigationinto a Baltimoremurder
Launched inSummer ‘14,the story oflaunching apodcastingcompany
Note: Article mentions determine through Factiva searches on: “Serial & podcast & Koenig” and “Startup & podcast & Blumberg”Source: Factiva
PERSONALITYCROSS-
PROMOTIONSOCIAL
MEDIA / BUZZTRADITIONAL
MEDIALIST
POSITIONING
• Hostedby SarahKoenig,produceron ThisAmericanLife (TAL)
• At least5 Serialoffshootpodcasts
• 185Ktwitterfollowers
• 387articlesfinal 3 mosof 2014
• Parody ofSerial onSNL
• 24 articlementionsin final 3months of2014
• Hostedby AlexBlumberg,15-yearpublicradioveteran
• Debuted10/3/14on TAL, apopularpodcast
• #2 iniTunesTop 10in May
• HoversaroundiTunesTop 20
• 21.3Kfollowerson twitter
• Featuredon TALsegmenton9/5/14
= Major contributor
Impact on audience acquisition= Moderate contributor = Minor contributor
14
Over time, public radio affiliated podcasts have retaineda strong presence in iTunes Top 10
1 SPONTANEANATIONwith Paul F. Tompkins This American Life This American Life This American Life This American Life This American Life
2 ESPN: Bill Don't Lie Radiolab from WNYCNPR Programs: WaitWait... Don't Tell Me!
Podcast
David Guetta -Nothing But The Beat,
The Movie
Stuff You ShouldKnow
Alvin And TheChipmunks: The
Squeakquel "Making aScene" Featurette
3 This American Life NPR: TED Radio HourPodcast WNYC's Radiolab
NPR Programs: WaitWait... Don't Tell Me!
PodcastFreakonomics Radio Freakonomics Radio
4 SerialNPR Programs: WaitWait... Don't Tell Me!
Podcast
NPR: TED Radio HourPodcast WNYC's Radiolab The Moth Podcast Stuff You Should
Know
5 Radiolab from WNYC The Moth Podcast Stuff You ShouldKnow Freakonomics Radio The Adam Carolla
ShowNPR: Wait Wait...
Don't Tell Me! Podcast
6 TED Radio Hour Welcome to NightVale The Moth Podcast NPR Programs: Fresh
Air Podcast WNYC's Radiolab NPR: Fresh AirPodcast
7Psychobabble with
Tyler Oakley & KoreyKuhl
Freakonomics RadioStarTalk Radio Show
by Neil deGrasseTyson » Shows
Stuff You ShouldKnow
NPR: Wait Wait...Don't Tell Me! Podcast
The Ricky GervaisPodcast
8 Invisibilia Stuff You ShouldKnow Norm Macdonald Live
Alvin and theChipmunks:
Chipwrecked: Behind-the-Scenes
NPR: Fresh AirPodcast
Real Time with BillMaher
9 Fresh Air NPR Programs: FreshAir Podcast Here's The Thing NPR: Car Talk Podcast ESPN: 1st and 10 WNYC's Radiolab
10 Wait Wait... Don't TellMe! The Nerdist The Joe Rogan
ExperienceThe Adam Carolla
Show Happy Tree Friends MacBreak WeeklyVideo (large)
RANK APRIL 2015 APRIL 2014 APRIL 2013 APRIL 2012 APRIL 2011 APRIL 2010
= Public radio/ affiliated = Entertainment = EducationalNote: Top 10 for the first of April, each yearSource: http://www.itunescharts.net/us/charts/podcasts/
16
0
20
40
60
80
$100
Cost per thousand
Gener
al
displa
y
2
Mobile
3
Prem
ium
displa
y
10
YouT
ube
15
Video
25
Podc
ast
(Avg
)
30
Seria
l
40
Gimlet
100
0
5
10
15
$20
Estimated podcast CPM*
2010
11
2011
13
2012
13
2013
15
2014
18
2015
20
13%
10-15CAGR
Podcast pricing, which is significantly higher than othermedia, has stayed fairly steady
PODCASTING ADS ARE MUCHPRICIER THAN OTHER MEDIA…
…AND CPM LIKELY TO HAVEINCREASED OVER TIME
“Podcast ads generate ridiculous levels of engagement. Internal Midroll surveysof 300K listeners found that 63% of people bought something a host hadpeddled on his show. Because of that leverage, Midroll "charges a lot, actually" forpodcast ads.” - Fast Company
Note: *Podcast CPM change from 2010-2015 estimated using 2015 average ($20 CPM), then using Fiksu Cost per Loyal User index data (Costper Loyal User Index measures the cost of acquiring a loyal user for brands who actively market their apps) to estimate backwardSources: MonetizePros, The Globe and Mail, Slate, Fast Company, Fiksu
17
Estimation of performance for “Serial” podcast showspotentially attractive margin opportunity
0
200
400
$600K
Serial podcast economics
Revenue
585
Ad salescomission
-176
RadioPersonality
Salaries
-150
Radio StaffSalaries
-75
Cost of datahosting/transfer
-48
OtherExpenses
-50
Margin
87
Note: Revenue: assumes 12 podcasts at 1.5M downloads at $33 CPM per listen; Ad sales commission: assumes 30% of gross revenues;Salaries: assumes 2 radio personalities and 3 radio staffers worked 50% of the year on ‘Serial’ podcast at $150K and $50K salaries,respectively; Cost of data hosting: assumes $4K monthly cost of data transferSources: http://www.business2community.com/content-marketing/serial-effect-podcasting-business-profitable-strategy-01124873;http://glog.glennf.com/blog/2014/11/23/show-me-the-numbers-serials-data-transfer-costs
ILLUSTRATIVE
~15%estimatedmargin for
Serial
Does not includeadditional
donations solicitedduring Season 1
19
Competitive for talent; Qualitywill win
Commoditized barringsignificant innovation
Ownership to remain with top players,though startups cropping up to offerenhanced audio
Market expected to remain fragmented over time, withkey players emerging based on talent
Content Aggregation Distribution
iTunes
Beyond Pod
DoggcatcherPlayer
FM
PRX affiliate
Soundworks
APM
Proprietarycontent
3rd
partycontent
Pure adplatforms
InstacastHybrid content network
Distribution network= Higher margin
= Moderate margin
= Lower margin
Projected margin
Sources: Company websites
21
Select Scenarios – Methodology
Drivers • Podcasting remains afairly niche form of mediawith 1-2 breakouts alaSerial, but littlebroadening of usage
• Online and terrestrialradio remain dominant
• CPM drops in line withaverage ad drops for onlineradio ads
• Podcasting continuesgrowing inline withhistorical growth, with aboost from breakout hitslike Serial widening thebroader market
• Prices increase atslower pace, as proveneffectiveness of podcastadvertising drives CPMhigher, but radio still seenas better investment
• Driven by rapid digitalaudio adoption in carsand significant mobile userconsumption of podcasts,radio personalities shiftto podcasts as well,yielding network effectsfuel further growth
• Migration of users andtalent and proveneffectiveness of podcastadvertising continuesdriving CPM higher
ProjectedListenerpenetration(2020)
20%(based on listener growth of 4%,which follows online radio listener
growth)
28%(based on listener growth of 11%,
which follows 5-yr historicalpodcast listener growth)
41%(based on listener growth of 20%,which follows recent, Serial-fueled
listener growth)
Projectedchange inListens permonth
2.7%(based on slow listener growth of
25% of ’14-15 listen growth)
5.3%(based on slower listener growth of
50% of ’14-15 listen growth)
10.7%(based on rapid ’14-15 listen
growth)
Projectedchange inCPM
-5.2%(based on 50% of online radio CPM
annual change)
6%(based on slower pricing growth of
50% of historical)
12.1%(based on historical pricing growth)
LOW GROWTH BASELINE GROWTH HIGH GROWTH
Recommended