Welcome To The Million-Dollar Podcast: A Niche Medium Grows Up A Bit And …

Apple Inc.’s iTunes Store reached a landmark 1 billion podcast subscriptions last summer, and with that announcement covered by the likes of Macworld came the expected deluge of “Podcasts Are Back” trend pieces, as exemplified by USA Today. The digital audio medium that exploded during the iPod revolution fell on dubious times in the mid-2000s, but the proliferation of mobile devices spurred a renaissance of sorts in this decade, with countless high-profile personalities —  Adam Carolla, Marc Maron, June Diane Raphael and Joe Rogan among them — elevating the craft to an even higher profile.

So we know podcasts are back, or maybe they never went away: But are they profitable? Monetizing this burgeoning format is the next great challenge for the audio industry, and those on the front lines say they are meeting it head-on.

“Sponsors and advertisers are definitely paying attention — and stepping forward,” said Jake Shapiro, CEO of Public Radio Exchange, or PRX, which produces the podcast collective Radiotopia. “We get in-bound inquiries now, ringing us up saying, ‘We want in, so how do we do it?’”

Shapiro is a veteran of public radio and said many podcasts employ a similar business model, using a combination of sponsorship, advertising and various types of fundraiser appeals. For instance, Radiotopia is currently in the thick of a Kickstarter campaign that has raised more than $396,000. It was asking for only $250,000.

If nothing else, the campaign’s runaway success should be enough to convince major brands that consumers are listening, but Shapiro said the flow of ad dollars is still catching up to changes in audio-consumption habits.

“It’s still emergent,” he said. “Brands and companies that want to sponsor podcasts are still wrapping their heads around what it really means. The metrics aren’t fully in place, but the level of listening and engagement — and the opportunity to get into the very intimate medium of spoken-word audio in someone’s headphones — is just a really powerful place to be for brands. So it’s starting to command a premium.”


Radiotopia logo


Radiotopia, a podcasting collective, has raised more than $396,000 on Kickstarter. It was asking for only $250,000.
 Radiotopia

Money Talks

Enter Midroll Media LLC, a media-buying firm that specializes in selling ads specifically for podcasts. Since its launch two years ago, its quarterly revenue has doubled year-over-year almost every quarter, according to Erik Diehn, the company’s vice president of business development. “Our revenue growth has been dramatic,” he said.

Midroll is essentially filling a niche that many in the radio industry didn’t know needed to be filled. The company now sells advertising for about 130 podcasts, including podcasts for Slate Media and popular titles such as “WTF with Marc Maron.” Midroll doesn’t share revenue figures, but Diehn said he expects four of its most widely heard podcasts to gross more than $1 million in ad revenue in the next year.

Diehn credits Midroll’s growth to younger brands — many tech startups — that have been quicker to recognize the value of podcasts than have older brands and that also have an interest in direct-response-type advertising. Podcast ad units are measured in cost-per-thousand impressions, or CPMs, as opposed to through traditional ratings such as those of the Nielsen Co. Brands such as LegalZoom, MailChimp and Squarespace, which may not have the ad budgets to book expensive broadcast-radio spots, are common fixtures on podcasts.

Conversely, more-established brands such as those of the Coca-Cola Co. and McDonald’s Corp. are still bogged down by what Diehn calls the “structural baggage” of marketing departments too focused on the old way of doing things. “They have buyers who are used to buying gross ratings points,” he said.

Of course, it’s only a matter of time before mainstream brands catch on, but Diehn said they might consider leaving some of their more annoying advertising habits behind. He said intrusive radiolike commercials won’t fly with discerning podcast audiences, who want a more purposeful listening experience than does the typical passive AM/FM dial-surfer. He said Midroll has had the most success with unobtrusive ad spots read directly by the on-air talent — hosts who have built-in listener trust.

“The recall rates are much better than you would get with, say, some sort of injected, precanned creative spot stuck in the middle of six tracks on a Pandora stream,” Diehn said. “If you’re listening to classic rock [songs], and all of a sudden there’s this screaming ad for a car dealer, the intrusion factor is off the charts.”


Share-of-Ear


Podcasts account for only 1.7 percent of our total audio consumption, but those who become avid podcast listeners tend not to go back to traditional radio.
 Edison Research

Decade Of Disruption

The modern idea of the podcast can be traced back to a 2003 demonstration at Harvard University’s Berkman Center for Internet and Society. Only a few years later, however, commentators were writing obituaries for the social-media form. Clunky interfaces, slow connections and a multistep downloading process frustrated would-be listeners. For a while, it looked like the podcast might be little more than a passing fad, durable enough to hold on to a tech-savvy niche audience, but no real threat to traditional radio broadcasters.

Then the iPhone happened, and suddenly anybody could load a podcast with just a few taps of his or her screen. As smartphone penetration grew in the late ’00s and early ’10s, the popularity of podcasts grew with it. “The smartphone is a terrific audio vehicle,” said Thomas Hjelm, chief digital officer for New York Public Radio, home of WNYC. “It’s the transistor radio of today.”


Steve Jobs


Apple Inc. CEO Steve Jobs introduces the Apple iPod nano media player in San Francisco in 2007.
 Reuters

The shift to on-demand radio audiences mirrors the transition experienced by television, whose conventional model has been upended by digital video recorders and streaming services such as the one offered by the market-leading Netflix Inc. Hjelm said New York Public Radio has seen significant growth in on-demand listening, but he said the “bullhorn” of broadcast is still a key way to promote a show’s awareness. The two formats are more symbiotic than are competitors, he said.

Indeed, the most popular podcasts are still broadcast properties, and many existed on radio before the iPod revolution. “This American Life,” WNYC’s “Radiolab,” and NPR’s “Fresh Air” typically rank in the top 10 on the iTunes charts. Others such as “Freakonomics Radio” (No. 3 on the charts this week) have built-in brand recognition. But more radio producers are experimenting with digital-first properties. “Serial,” the new “This American Life” spinoff hosted by Sarah Koenig, is already a bona fide cult hit.

According to a recent study by Edison Research, podcasts account for only 1.7 percent of our total audio-consumption time. AM/FM radio is still responsible for more than one-half. But Diehn said those who become avid podcast users tend not to go back to broadcast radio. Traditional radio may have a synergistic relationship with podcasts at present, but Diehn believes a shift is coming, and in the end America only has so many eardrums to go around.

“In that respect, I think we are competing,” Diehn said. “And not just competing, but I think we are largely going to win in the long run.”

Got a news tip? Email Christopher Zara here. Follow him on Twitter @christopherzara.

Correction: An earlier version of this article said four of Midroll’s podcasts have already grossed over $1 million. They are expected to gross $1 million in the next year. 

Agents, lenders fill niche as Chinese money floods housing market

When Alisha Chen first got into real estate 10 years ago, she didn’t really plan on becoming a gatekeeper for a global housing market.

But a housing crash and a flood of Chinese money later, she’s part of a growing cottage industry of real estate agents, bankers and attorneys who specialize in helping wealthy foreigners buy a little patch of Southern California.

The job requires being part cultural ambassador, part shrewd property scout, part monetary policy wonk. It means being able to read the different tastes of buyers from Hong Kong versus those from mainland China, and to explain the nuances of Irvine versus Tustin to people who have never set foot in the U.S.

It might mean not asking too many questions about how a million dollars is getting here, or prodding people accustomed to financial privacy to open their books to a mortgage banker.

For Chen, it leads to a lot of Skype calls in the middle of the night.

lRelated Chinese builder Landsea to invest $1 billion in U.S. housing market
BusinessChinese builder Landsea to invest $1 billion in U.S. housing marketSee all related

Today, the transpacific trade in Southern California real estate is big business. Chinese citizens bought $22 billion worth of homes in the United States in the 12 months that ended in March, according to estimates by the National Assn. of Realtors. And with its direct flights to China and large Asian communities, the Southland is their favorite destination.

They’re buying homes for themselves to emigrate, for their children to attend college, or for rental income. Neighborhoods from Irvine to Arcadia are being transformed.

It all begins with a transaction that’s a little more complicated than your typical home sale.

While domestic buyers are familiar with the neighborhoods and can explore the streets to get a feel for a place, a client from Shanghai or Shenzhen is limited to Internet searches and maybe a quick shopping trip — though many of Chen’s investor clients buy sight unseen. She spends a lot of time talking buyers through the ins and outs of neighborhoods.

“They know Hollywood, Beverly Hills, Irvine,” she said. “They say, ‘Where’s Tustin? Where’s Lake Forest?’ I tell them they’re right next to Irvine.”

Chen sets aside a few hours just to explain the process. Many of Chen’s clients own their own businesses and are successful in their native land. But things such as escrow, clearing title and complex closing documents are foreign concepts.

“In Taiwan you can still buy property on a napkin. Here it’s a book full of paperwork and timelines,” she said. “There’s a lot of education I have to do.”

Then there’s the matter of moving money.

China bars its citizens from transferring more than $50,000 a year out of the country, a rule agents say many would-be buyers skirt by lining up friends to wire $50,000 apiece to an account in Hong Kong, where it can then be freely moved to a U.S. bank.

Others move the cash through businesses that have operations in both countries, or through some other third party. Then they need a proof of funds letter before most sellers will sign a contract.

Angela Wong, who specializes in Asian sales at Ewing Associates Sotheby’s International Realty in Calabasas, said she often recommends her buyers get a letter from their bank verifying their income, and move their money out of China at least two months ahead of time if they plan to seek a loan. It can take some coaxing, she said.

“All this is very new to them,” she said. “A lot of Chinese people are very conservative about sharing their wealth.”

Another popular route for Chinese buyers requires even more inspection. The EB-5 Visa program offers a green card to any immigrant who invests at least $500,000 in a U.S. business. It’s open to anyone anywhere in the world, but about 85% of EB-5 applicants come from China, and interest there is surging. The program hit its 10,000-a-year cap in August, two months before the end of the federal fiscal year.

Related story: Southland homes draw foreign cash

Related story: Southland homes draw foreign cash Tim Logan Led by Chinese buyers, U.S. housing sales to international clients hit $92 billion. Led by Chinese buyers, U.S. housing sales to international clients hit $92 billion. ( Tim Logan ) –>

Although the EB-5 program generates a steady flow of potential home buyers, it is unreliable. The approval process can take months, and deals frequently fall through.

Verifying where the money comes from is especially important, said Albert Siu, a lawyer in the City of Industry who works on real estate deals for EB-5 clients. Siu said he turns down about half of his potential clients, rather than spend time on deals that he’s not sure will work out.

“Most real estate agents don’t ask. It’s none of their business. But with the EB-5 we have to ask,” he said. “It’s more or less, ‘Can you trust this person? Or do they seem shady?'”

Chen has moved away from EB-5 clients too, she said. Too many things can go awry and kill the deal. These days most of her customers come via word of mouth and referrals, and she’s more selective as she’s grown busier.

“You really have to be choosy,” she said. “There’s only so many clients you can take on.”

Chen now employs eight people — who, combined, speak eight languages — to buy and manage properties. She has offices in Irvine, Chino and Taiwan. When she hears grumbling about Chinese money pricing out American home buyers, she notes that it helped revive the housing market, and that all those transactions keep people working at banks and title companies and contractors.

“This has created a lot of jobs,” she said.

But even she’s starting to wonder how much longer this influx of cash from across the Pacific will last. The Chinese government keeps making noise about clamping down on currency leaving the country. The U.S. government is talking about taxes on foreign investors, which could make buying here a little less attractive. Buyers are starting to get a bit spooked. And there’s only so many of these deals she can do.

All that has Chen wondering what trend might come next.

“I think I’m not going to be putting as much energy into this,” she said. “I think the next few years are going to be a good time for first-time buyers.”

[email protected]

Agents, lenders fill niche as Chinese money floods housing market

When Alisha Chen first got into real estate 10 years ago, she didn’t really plan on becoming a gatekeeper for a global housing market.

But a housing crash and a flood of Chinese money later, she’s part of a growing cottage industry of real estate agents, bankers and attorneys who specialize in helping wealthy foreigners buy a little patch of Southern California.

The job requires being part cultural ambassador, part shrewd property scout, part monetary policy wonk. It means being able to read the different tastes of buyers from Hong Kong versus those from mainland China, and to explain the nuances of Irvine versus Tustin to people who have never set foot in the U.S.

It might mean not asking too many questions about how a million dollars is getting here, or prodding people accustomed to financial privacy to open their books to a mortgage banker.

For Chen, it leads to a lot of Skype calls in the middle of the night.

lRelated Chinese builder Landsea to invest $1 billion in U.S. housing market
BusinessChinese builder Landsea to invest $1 billion in U.S. housing marketSee all related

Today, the transpacific trade in Southern California real estate is big business. Chinese citizens bought $22 billion worth of homes in the United States in the 12 months that ended in March, according to estimates by the National Assn. of Realtors. And with its direct flights to China and large Asian communities, the Southland is their favorite destination.

They’re buying homes for themselves to emigrate, for their children to attend college, or for rental income. Neighborhoods from Irvine to Arcadia are being transformed.

It all begins with a transaction that’s a little more complicated than your typical home sale.

While domestic buyers are familiar with the neighborhoods and can explore the streets to get a feel for a place, a client from Shanghai or Shenzhen is limited to Internet searches and maybe a quick shopping trip — though many of Chen’s investor clients buy sight unseen. She spends a lot of time talking buyers through the ins and outs of neighborhoods.

“They know Hollywood, Beverly Hills, Irvine,” she said. “They say, ‘Where’s Tustin? Where’s Lake Forest?’ I tell them they’re right next to Irvine.”

Chen sets aside a few hours just to explain the process. Many of Chen’s clients own their own businesses and are successful in their native land. But things such as escrow, clearing title and complex closing documents are foreign concepts.

“In Taiwan you can still buy property on a napkin. Here it’s a book full of paperwork and timelines,” she said. “There’s a lot of education I have to do.”

Then there’s the matter of moving money.

China bars its citizens from transferring more than $50,000 a year out of the country, a rule agents say many would-be buyers skirt by lining up friends to wire $50,000 apiece to an account in Hong Kong, where it can then be freely moved to a U.S. bank.

Others move the cash through businesses that have operations in both countries, or through some other third party. Then they need a proof of funds letter before most sellers will sign a contract.

Angela Wong, who specializes in Asian sales at Ewing Associates Sotheby’s International Realty in Calabasas, said she often recommends her buyers get a letter from their bank verifying their income, and move their money out of China at least two months ahead of time if they plan to seek a loan. It can take some coaxing, she said.

“All this is very new to them,” she said. “A lot of Chinese people are very conservative about sharing their wealth.”

Another popular route for Chinese buyers requires even more inspection. The EB-5 Visa program offers a green card to any immigrant who invests at least $500,000 in a U.S. business. It’s open to anyone anywhere in the world, but about 85% of EB-5 applicants come from China, and interest there is surging. The program hit its 10,000-a-year cap in August, two months before the end of the federal fiscal year.

Related story: Southland homes draw foreign cash

Related story: Southland homes draw foreign cash Tim Logan Led by Chinese buyers, U.S. housing sales to international clients hit $92 billion. Led by Chinese buyers, U.S. housing sales to international clients hit $92 billion. ( Tim Logan ) –>

Although the EB-5 program generates a steady flow of potential home buyers, it is unreliable. The approval process can take months, and deals frequently fall through.

Verifying where the money comes from is especially important, said Albert Siu, a lawyer in the City of Industry who works on real estate deals for EB-5 clients. Siu said he turns down about half of his potential clients, rather than spend time on deals that he’s not sure will work out.

“Most real estate agents don’t ask. It’s none of their business. But with the EB-5 we have to ask,” he said. “It’s more or less, ‘Can you trust this person? Or do they seem shady?'”

Chen has moved away from EB-5 clients too, she said. Too many things can go awry and kill the deal. These days most of her customers come via word of mouth and referrals, and she’s more selective as she’s grown busier.

“You really have to be choosy,” she said. “There’s only so many clients you can take on.”

Chen now employs eight people — who, combined, speak eight languages — to buy and manage properties. She has offices in Irvine, Chino and Taiwan. When she hears grumbling about Chinese money pricing out American home buyers, she notes that it helped revive the housing market, and that all those transactions keep people working at banks and title companies and contractors.

“This has created a lot of jobs,” she said.

But even she’s starting to wonder how much longer this influx of cash from across the Pacific will last. The Chinese government keeps making noise about clamping down on currency leaving the country. The U.S. government is talking about taxes on foreign investors, which could make buying here a little less attractive. Buyers are starting to get a bit spooked. And there’s only so many of these deals she can do.

All that has Chen wondering what trend might come next.

“I think I’m not going to be putting as much energy into this,” she said. “I think the next few years are going to be a good time for first-time buyers.”

[email protected]

IBM and Tencent partner target niche verticals with cloud services

Tencent Cloud and IBM sign a business cooperation memorandum to collaborate on providing public cloud with Software-as-a-Service solutions for industries and enterprises. Pictured L-R: Qiu Yuepeng, Corporate Vice President, Tencent, Taosang Tong, President of Social Network Group, Senior Executive Vice President of Tencent Group, Nancy Thomas, Managing Partner, IBM GCG GBS and David Cheng, General Manager, IBM South China Region. (Image courtesy of Tencent)

Executives from Tencent and IBM sign an MoU in Hainan, China, to collaborate on cloud services

IBM and Chinese ISP Tencent have inked a deal that will see the two companies team up to jointly market cloud-based services for SMBs working in smart cities and healthcare among other verticals.

Tencent and IBM have agreed to jointly promote mobile, cloud services and big data applications to small and medium sized businesses. The agreement will see Tencent leverage its network and cloud platform in China and IBM offer up its software expertise and consulting service, and the two firms will initially target companies offering services in healthcare and smart cities.

“The industry dimension makes this especially appealing for businesses,” said Nancy Thomas, managing partner with IBM’s business consulting services division in China. “IBM and Tencent’s shared vision is not only to bring the scale and cost benefits of cloud computing to enterprises in China, but to add differentiating value by serving the particular needs of specific industries. That is the key to unlocking the transformative power of cloud computing.”

The firms said they expect a tenfold increase in the number of cloud apps over the next four years, with two thirds of those new applications having an industry-specific or role-specific focus. That said the deal may come as good news to CIOs, many of which still seem to feel ISVs catering to niche verticals are not moving quickly enough to develop cloud-based alternatives for their legacy apps.

Bennett finds his niche among UGa receivers

Wide receiver Michael Bennett has made a lot of good plays for Georgia over the years. But it’s a bad one he made earlier this season that was foremost on his mind this week.

Bennett fumbled the ball away in the first game of the season against Clemson.

“That’s the only fumble we’ve lost,” he said of the first-quarter miscue. “I shouldn’t have gotten in that situation anyway. It was just freaking stupid.”

The Bulldogs will give the senior a pass. Entering the last half of his final season, the senior from Alpharetta has proved to be one of Georgia’s most dependable players.

Heading into Saturday’s game against Florida, Bennett leads the Bulldogs in receptions (22) and touchdown catches (4). And as his college career creeps toward completion, he’s quietly moving up Georgia’s all-time lists.

With 119 catches, Bennett is 12 away from catching Damien Gary and entering the top 10 in school history. And he’s been particularly good at finding the end zone. His 17 touchdown receptions are sixth on the all-time list. Bennett needs three more to run down Fred Gibson and move into fourth.

“He’s a guy that’s not flashy, just goes about his business,” offensive coordinator Mike Bobo said. “If you throw it near him, he usually makes the catch. When he’s played and the ball’s thrown to him, he usually makes plays. He plays the slot for us and sometimes in the red zone the slot gets a lot of touchdown opportunities. He gets matched up with linebackers and safeties. It’s just kind of how the coverage has gone and he’s made some plays. That’s his niche.”

Bennett’s catches have gone up slightly in the last two games with eight overall. That Malcolm Mitchell returned to the field in the same time frame is not a coincidence. Mitchell has moved back to split end, which has allowed Bennett to move back in the slot.

“As much as I hate to admit it, that’s probably my niche,” Bennett said. “I seem to have a knack for finding the soft spots in zones and and being able to sit down in them.”

Bennett will get the 23rd start of his career Saturday against the Gators.