A couple of my friends are in the process of setting up podcast start-ups. In talking to them about their plans, it’s clear to me that there’s a definite set of paradigms between blogging and podcasting.
Moreover, careful analysis of the successes and failures of the early blogging phenomenon can yield valuable insight, I feel, into the way podcasting start-ups should align themselves in the market.
Some might argue that their chances of success have been reduced considerably because they’ve lost first-mover advantage – but you’ve only got to look at the wane of first-movers Technorati and Skype* recently to see that there’s opportunity for younger start-ups to get a piece of the action.
So comparisons between blogging opportunities and future podcasting opportunities… I’m not saying podcasting is exactly the same as blogging, but certainly the business models and opportunities look similar, and as such much can be learned from where the likes of Blogger, SixApart/Typepad, Technorati and the like went wrong and right.
For me, there are three core business opportunities that are common to both blogging and podcasting:
- Production and delivery
- Search and discovery
- End-user consumption
Production and delivery
In the blogging world, this area is dominated by two types of product: the managed service and the standalone blogging platform software. Basically it’s down to whether you want to do the dirty work and keep the control or let someone else do the hard work for you in return. Typepad and Blogger have done a good job with the former and WordPress and Moveable Type equally for the latter.
The important point to note here is that the commercially successful propositions are the ones that add the most value. Both options provide a platform to blog on, but it’s the managed services that have removed much of the technical hassles and lowered the barrier to entry – and they are the services people are happy to pay for or have advertising incorporated in to their own content (Blogger and Typepad).
Movable Type has never recovered from the bad vibe that surrounded their Version 3 licensing model, allowing WordPress to become the current darling of the blog platforms (WordPress being open source, of course, and thus vastly decreasing the level of commercial opportunity of the standalone blog software market).
The one significant difference with podcasting is that it’s blogging + audio recording/production. This is important to note because this means significantly more technical hassle and higher barrier to entry – and thus more opportunity to add value.
Search and discovery
Arguably the most vital link in the success of the blogosphere has been the availability of search tools such as Technorati and Feedster. They’ve even beaten Google at their game, searching text and websites faster than their old rival – albeit on a smaller subset of the market Google covers. But the point still stands; you’d probably use Technorati or Feedster to search the latest blogs rather than Google.
The biggest difficulty, and thus the biggest opportunity I feel for podcasting, is the fact that we’re dealing with chunks of binary data which are difficult to search. Or to put it another way, it’s a search behaviour Google hasn’t exploited (yet).
I feel there is a big-ticket opportunity for both a serious first mover start-up and a current search incumbent to dominate this market. It’s the only common tool everyone needs to use in the blogging world, and the one that the podcasting world currently lacks (and desperately needs).
It’s also the most expensive and risky aspect of podcasting for a start-up to get into, as the initial investment for the necessary speech-to-text equipment and expertise are huge. But here’s where another lesson can be learned from the podcasting world – it’s only by starting small can it be justified as feasible.
When Technorati first started there were less than half a million blogs on the Internet. It would very hard, to an exponential degree, for a start-up to enter this market at the size it is now compared to back then when the blogosphere was so small. I doubt another Technorati-like independent could enter the market now, it’s only by proving it’s value when it was small could Technorati obtain the investment needed to grow as the blogosphere grew.
There are currently only 1500-2000 podcasts. I feel it’s either now or never for an independent start-up to enter the podcast search market. But the returns are massive, with both b2c and b2b opportunities. Consumers will want a way to search the podcast-sphere and podcast managed services will want to buy in rebrandable whitelabel technologies that enable them to leverage content from their network to their visitors.
It’s also likely one of the major search engines would want to buy up such a company in order to incorporate the likely user base – even if the search technology itself was inferior or redundant to their own.
End-user consumption
In the blogging world, people consume blogs by either using a browser (as a traditional website) or an RSS aggregator. However, most people who consume blogs don’t even now what an RSS feed is, and it’s thought that just 10% of the Internet uses an aggregator of any kind.
Podcasting, on the other hand, lends itself to being consumed by an aggregator… You need one (generally speaking) to download your podcasts to your mp3 player.
Whilst Apple’s iTunes is the dominant player, those of us without iPods or not using Apple OS X are vastly underserved by this application. It’s not compatible with the way all other mp3 players work (by acting as a storage device with a drive on your computer) nor does it work very well on a Windows machine, IMHO.
For me, there are no good Podcast “catchers” out there. This is disappointing when you consider that it’s likely this will be the “gateway layer” – the main way users find content to consume. Apple’s iTunes Music Store and Podcast Finder are the gateway on iTunes, and there’s no reason to suggest that the same model couldn’t work for an indie catcher as well.
We can learn from the blogosphere that to become a “super user”, you have to use an aggregator – it’s the only way to manage all that content. If we assume that we want all our users to be “super users” (and thus “super advert consumes” along the way), then we need to ensure they have a way of becoming one. We need a decent podcast aggregator that isn’t biased towards a single audio player and a single operating system.
Conclusion
Clearly there are a number of gaps in the podcast market waiting to be filled by start-ups (or existing media and search incumbents). For me, they are as follows:
Production and delivery
A Typepad-like managed service that takes out all of the hassle of producing and delivering podcasts. Odeo already has first-mover advantage and is much-hyped. And Adam Curry’s Podshow empire looks set to also offer similar functionality.
However, there’s opportunity I feel for far more “agile” start-ups with lower overheads to get in here. Thee’s also scope for start-ups to specialise in verticle genre propositions (technology, comedy, etc) or try and maintain that “indie feel” quality which many podcast producers and listeners are already latching onto.
Search and discovery
A podcast search engine is a no-brainer, and could be created using existing enterprise speech-to-text technology. There are no real existing players, although Yahoo! have some early indicators of their intentions in this market.
Technorati and Feedster are cool because they are able to clearly demonstrate the relationships and interlinks between blogs. Audio, and more specifically speech-to-text doesn’t allow that, however there is still the making for a useful service here. Plus the exciting exist strategy of buy-out by a major-player.
End-user consumption
iTunes is successful if you’re an Apple OS X user or an iPod owner (the latter being particularly likely if your also a user of the former). But for the rest of us who are neither, there is a serious need for a simple to use podcast download manager and aggregator.
This in turn offers the opportunity for that software creator to be the gateway not only in terms of the source of content being consumed, but also the device that content is being delivered to. The serious emergence of video blogging is only a matter of time, and it’s likely such a product could be used for both audio and video.
Such a product would also be a gateway on to numerous devices: mp3 players at the moment, but also PSP’s/multimedia handheld devices, PDA’s and mobile phones in the future.
Footnote
* = I listed Skype as a “fist mover” because whilst there are earlier implementations of VoIP, Skype IMHO was the first to offer a consumer-friendly package suitable for the mass-market. In other words, it was the first mover into the mainstream consumer-orientated VoIP market.
I classify it as being “on the wane” because it has a massive technical flaw and scalability issue in it’s reliance on un-firewalled super-nodes to act as a “middleman” for communications between parties who are both behind firewalled connections. Clearly more and more of us are “raising our shields” on our internet connections, both reducing the number of supernodes and increasing the number of users dependent on them at the same time. Skype’s main USP is that it works “out of the box” behind most firewalls.
Skype is also facing some stiff competition from all sides – from ISP’s who throw in branded whitelabel VoIP packages on their accounts through to the likes of Google (with Google Talk) plus existing IM players like AOL and Yahoo! who are ramping up the VoIP aspects of their IM clients.