Listening Numbers Are Booming, But Even Spotify Doesn’t Know If It Will Make Money From Podcasts.

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I’m a bit old school. While podcasting occupies much of my time each day, a long-established habit of slowly leafing through the pages of newspapers continues to be a source pleasure. Print discoveries are made without digital nudges from algorithms.

Among my favorite finds last week was in the “C-Suite Strategies” section of The Wall Street Journal and a surprisingly revealing comment by Spotify CFO Barry McCarthy.

Asked by a reporter “why is podcasting an important medium for the company to expand into?”, McCarthy answered: “It remains to be seen whether or not it becomes an important medium.”

Huh?

His company spent approximately $400 million this year on three podcasting firms, in the expectation that these investments would increase Spotify’s growing subscriber base.

As more people discover the many rewards of podcast listening, many content producers and distributors are allocating a growing part of their media budget to podcasting. And for good reason.

“Frankly, if Spotify didn’t get into podcasts it would risk losing share of the audio listening market to other platforms,” said a recent post by the financial advice site, Motley Fool.

Despite soaring revenues from music subscriptions, the fast-growing streaming giant operated at a small loss during the first quarter of 2019 and for all of last year.

Podcasting is a big bet and McCarthy admits that “there’s a fair amount of uncertainty” about whether it will have a positive impact on profitability, “which is probably troubling to investors.”

Assuming that consumers will pay for podcasts that have, until now, been free may be a risky investment. While the most popular shows reach hundreds of thousands of listeners, most expensively-produced podcasts don’t make a profit. And compared to other media, podcasting’s share of the advertising pie is slim indeed.

One industry projection forecast that by 2020, U.S. podcast advertising would grow to $659 million, while in 2018, radio ad sales were $17.8 billion.

Overall digital advertising revenue last year surpassed $100 billion!

The numbers beg the question: How well-deserved are big podcast investments by venture capitalists and others? Will millions of listeners pay for monthly subscriptions to Spotify, Luminary, Pandora and other platforms?

While podcasters celebrate expanding opportunities, growing media coverage, dazzling new shows and a steady rise in consumer acceptance, the industry’s producers and investors must broaden their horizons.

“Some fear that podcasting has become a community talking to itself— a coastal thing like electric scooters and avocado toast,” wrote Gerry Smith in Bloomberg Businessweek.

Yes, the pod potential is huge. But competition is increasingly fierce. Obstacles remain. A little more caution and humility may be in order.

Richard Davies is a podcast consultant, media coach and former network radio journalist. His weekly solutions journalism podcast is “How Do We Fix It?

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Mind the Gap: Our Deep Military-Civilian Cultural Divide is Growing

  

“God, Duty, Honor, Country”. The Vietnam War Memorial on The Green in Guilford, Connecticut

America is more politically and socially divided than at any moment since the Vienam War – a time of massive protest and urban unrest. 

On this Memorial Day, add one more trend to the list: The division between the U.S. Military and American civilians has rarely been deeper than it is now.

“It’s a cultural gap that needs bridging, and that begins with mutual respect and understanding.,” writes former army Ranger Sean Parnell in The Military Times.  “Too often, civilians are hesitant to ask veterans about their combat experiences, because they fear saying the wrong thing.  At the same time, too many veterans “shut down” and decline to talk about their service with civilians, assuming they’ll never understand.”

50 years ago, during the Vietnam War era, well over two and a half million men served in the military from all parts of society.  Today, according to a disturbing article in The Los Angeles Times, the number has shrunk to 1.3 million –  0.4% of the U.S. population – the lowest number since before World War II. 

About half of America’s active-duty service members live in five states – California, Virginia, Texas, North Carolina and Georgia.

Many military personnel have limited contact with the rest of society.  “Surveys suggest that as many as 80% of those who serve come from a family in which a parent or sibling is also in the military,” the Times reports .  “They often live in relative isolation — behind the gates of military installations such as Ft. Bragg or in the deeply military communities like Fayetteville, N.C., that surround them.”

I’m part of the problem. Like most others in the media, I personally know very few vets.

The burden of protecting the nation and the world against the growing threat of ISIS, the Taliban and other Islamist fanatics, falls on a surprisingly small sector of the population. 

At a time of utter chaos in much of the Middle East, and threats posed by North Korea, Russia and Iran, we need to listen carefully to those who are on the front lines.  What are their opinions of what they are being asked to do?

“The last decade of war has affected the relationship between our society and the military,” Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff, wrote in 2013.  “As a nation, we’ve learned to separate the warrior from the war. But we still have much to learn about how to connect the warrior to the citizen.”

Only 7% of Americans are vets, an ever-shrinking part of the population.  The Department of Veterans Affairs says the number will continue to fall over the coming decades. 

At a time of left vs. right political dysfunction, when many Americans prefer snark to substance, it’s time for all of us to pop our information bubbles: time to get into our discomfort zone and listen to those who have a different experience of the world than our own. 

More on my new podcast, How Do We Fix It? in my next post.  Spread the word!