The gold rush is over. Now podcasters are picking up the pieces

It’s a truth universally acknowledged that last year was the podcast world’s annus horribilis.

You wouldn’t have predicted this just a few years ago when the industry was experiencing what appeared to be an unstoppable boom. Sure enough, the so-called “dumb money” poured in as big investors sensed a gold rush and started throwing around cash like drunk multimillionaires on a bachelor party trip to Vegas.

Spotify led the spending spree, dropping over a billion dollars in the sector. Across 2019 and 2020, the company paid over $US200 million ($300.8 million) for Joe Rogan’s popular talk show and started gobbling up podcast companies, spending $US230 million on Gimlet (Reply All, StartUp, Science Vs.) and $US200 million on Bill Simmons’s sports podcast empire The Ringer. Amazon entered the fray, coughing up $US300 million for Wondery (Dirty John, Dr. Death, The Shrink Next Door), while Sirius XM topped that with $US325 million for Stitcher (Comedy Bang! Bang!, Office Ladies, How Did This Get Made?).

If those numbers seem crazy to you, congratulations on your business acumen. The sharper commentators expressed concerns that this bubble couldn’t possibly hold air for too long before bursting.

Kellie Riordan: “I’m cautious of the commentary that’s saying podcasts are over. They’re not.”

Nicholas Quah, the podcast critic for New York magazine and Vulture website, wrote a widely read column at the beginning of 2023 titled This Could Be A Rough Year For The Podcast Industry. It turns out he could have confidently replaced “could be” with “definitely will be”. It’s telling that last year, only around 220,000 new podcasts were created, a drop of around 80 per cent from the halcyon days of 2020, when more than a million were made.

There was no doubt that the sector was going gangbusters up to that point. Before Serial premiered in 2014, barely anyone knew what a podcast was. By 2020, there were one million podcasts, and, depending on who you believe, that figure has at least tripled and possibly quadrupled since then. Estimates of the worldwide audience are around 500 million.

The question is: what exactly were these investors looking for with all those shows and all those listeners?

“I think they were looking for three things,” says Kellie Riordan, the founder and director of Australian podcast house Deadset Studios and formerly the producer of powerhouse ABC podcasts such as Conversations and Ladies We Need To Talk. “The first was advertising revenue. The second was IP (intellectual property) on original concepts to turn them into a film, a TV series or a book deal. The third was a production pipeline.”

There were a number of problems with these goals, but the main two were these: the market was massively overvalued and the people with the chequebooks were not across how much time, money and patience it took to actually make a well-produced podcast series.

Some shows did end up making the elusive but hoped-for transition to TV (see break-out box), but the rivers of gold investors thought would flow from advertising turned out to be more of a babbling brook than a raging torrent.

“The podcast advertising model is fundamentally broken,” says Avery Trufelman, who rose to prominence as a podcaster in the US with 99% Invisible and then started her own successful series, Articles Of Interest, about the historical and sociological impact of clothing and fashion. “The model is all about who can produce a wheelbarrow full of shows. It’s basically saying, ‘Make the most stuff possible to guarantee the most listeners, so we can attract advertisers.’”

Avery Trufelman: “My assumption was that I’d always have to have a day job and I’d do audio on the side because that was my passion.”Credit: Ash Berdebes

Deadset’s Riordan concurs: “All the advertising money goes to the top 20 shows, and it’s all gamed around churning out high volume. Some people have cottoned on to this, and they’re just putting out any old drivel as long as they can make a lot of episodes to attract advertising dollars. I think that’s a race to the bottom, and I think it will be a real shame if it continues.”

When the bubble burst last year, the effect was devastating for many working in the industry. Spotify implemented three massive layoffs in their podcast workforce within five months. Other big players, such as Vox Media and Pushkin Industries, made similar cuts. Even NPR was not immune to the downturn – after announcing a budget gap of over $US30 million, they cut staff by 10 per cent in March last year and axed mainstay shows such as Invisibilia and Louder Than A Riot.

Five shows that successfully made the leap from podcast to TV series.

Dirty John

The story: Debra Newell thought she’d met her perfect match when she started dating a doctor named John Meehan. The whirlwind romance soon turned out to be a web of lies, a cycle of abuse and, finally, a murder. The TV stars: Connie Britton, Eric Bana

Homecoming

The story: This fictional podcast about a mysterious rehab facility for returned war vets features the voices of Catherine Keener as a case worker, David Schwimmer as her ruthless boss and Oscar Isaac as a damaged soldier. The TV stars: Julia Roberts, Bobby Cannavale

WeCrashed: The Rise And Fall Of WeWork

The story: Adam Neumann and his wife Rebekah revolutionised the desk-sharing office space concept, but they had hugely questionable business practices and messiah complexes that saw them burn through money with their lavish lifestyles. The TV stars: Jared Leto, Anne Hathaway

The Dropout

The story: Elizabeth Holmes claimed her company, Theranos, had developed a wide-ranging medical test using just a single drop of blood. She amassed billions of dollars from investors before being exposed as a fraud. The TV stars: Amanda Seyfried, Naveen Andrews

The Shrink Next Door

The story: One day journalist Joe Nocera discovers that his neighbour, a celebrity psychiatrist, doesn’t actually own the mansion next door – he took over the place from his patient Marty Markowitz, while controlling his finances and life choices. The Stars: Paul Rudd, Will Ferrell

No one seemed immune to the downturn, no matter how powerful or popular. In April 2022, Spotify ended its $US25 million relationship with Barack and Michelle Obama’s production company. And, at the end of last year, the company announced it was no longer producing investigative journalist Connie Walker’s Stolen (which won both a Pulitzer Prize and a Peabody Award) and Jonathan Goldstein’s Heavyweight, a pioneering show that many critics (including this writer) consider one of the best podcasts ever made.

Although the US landscape is looking grim, Riordan feels that the Australian market has not suffered to the same extent.

Podcasters wanted a film or TV deal: Eric Bana and Connie Britton in the Netflix series Dirty John.Credit: Netflix

“There’s definitely been a settling after the gold rush of 2020, but we didn’t have the same ridiculous over-inflation and over-valuation here, so the rise was not as steep, and the fall has not been as steep either,” she says. “And look, I’m cautious of the commentary that’s saying podcasts are over. They’re not.

“Last year, I put out a survey called PodPoll, which is the biggest study of podcast consumption in Australia. We found that around a third of Australians listen to podcasts regularly now. That is a market that’s growing. Are they growing at the same rate everyone predicted in 2020? Perhaps not. But they’re still growing.”

For those still working in the sector, many are recalibrating their goals to suit the more austere times. The latest season of Trufelman’s Articles Of Interest turned up in many lists of the best podcasts of the year, including The New Yorker and The New York Times. But she has decided it doesn’t make financial sense to make another season in 2023.

“I’m spending this year writing a book about fashion,” she said. “I did the math, and it worked out better to do that compared with what Radiotopia (who previously funded the show) could pay me. I have no idea how I’m going to fund Articles Of Interest in the future.”

Trufelman knows many colleagues who are either struggling to get work or leaving the industry, “and my heart goes out to people who began working at Gimlet during the boom years, and now the towers are falling down. But I’m coming from a different time. I started at 99% Invisible (in 2013), and my assumption was that I’d always have to have a day job, and I’d do audio on the side because that was my passion.”

Similarly, Nick van der Kolk is a lifer in the podcast world. Since 2005, he has been making Love And Radio, a revered show that breaks barriers when it comes to content, storytelling and production. Classic episodes have included stories about a black man befriending members of the Ku Klux Klan to convince them to quit, a man who lives in a love triangle with two female sex dolls, and van der Kolk getting a gun pulled on him by a guy who runs a strip club from his apartment.

“I made Love And Radio for free for the first seven years,” he says. “So if all this money that poured in during the boom is no longer there, there’s still more than when I was coming up. And that money created a lot of mediocre shows. You had these celebrities who were given a million dollars to make a podcast on the side that they didn’t really give a shit about. And now they’re gone, and I’m sorry, I’m not that sad about that.”

As for the future, “I feel quite optimistic. Podcasting is still so young. There’s so much more to explore and so much room to experiment.”

The problem for those podcasts that explore and experiment is that they take a lot of time to make, and the current advertising model is allergic to them. As Trufelman notes, “The short-run deep-dive series where you have to interview 40 people to make six episodes? Unless something radically changes with funding, I can’t see how that’s going to work any more.”

This is bad news for those of us who want exactly that kind of show. The good news is that many of those podcast producers aren’t going anywhere. Their dedication to telling good stories is too strong.

“I’m working on three stories at the moment that really feel like once-in-a-lifetime things,” says van der Kolk. “One of them I’ve been working on for over 13 years. I first contacted the guy in 2011, when he was in prison.”

“I feel optimistic about Australian audio storytelling,” says Riordan. “When I travel to overseas conferences, people there know about, and love, the best shows we make here. They know we make amazing narrative long-form series.”

Perhaps Avery Trufelman puts it best when asked to sum up the situation.

“It’s the end of the world as we know it,” she says, shrugging. “But I’m going to keep making podcasts. I’ll find a way somehow. I’m never going to stop.”

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