Will People Pay for Ad-Free Podcasting?
Stitcher thinks so.
The Scripps-owned podcast aggregation app Stitcher introduced a soft rollout of a $4.99/mo. premium service last year. It includes ad-free access to hot shows like Mark Maron’s “WTF” and “Comedy Bang Bang,” as well as access to complete archives of certain shows, bonus episodes and original programming available only to premium members.
But the model has already proven out, says Erik Diehn, CEO of Stitcher, Earwolf and Midroll. Sticher Premium is an evolution from the Howl premium service launched by Earwolf in August 2015. Rather than simply raise a paywall around the podcast content people already liked, Howl was exploring, not only an alternative business model, but a different editorial approach to podcasting. “To create an economically viable ad-supported podcast you need high volume, a critical mass of listeners and some predictability,” he tells min. “That definitely skews the media towards certain formats.” Talk and chat formats on trending topics that can work with low production costs (thus low risk) at a regular weekly cycle tend to succeed with advertisers.
With Howl, Earwolf explored a user-supported model that didn’t need to be ad-viable. Thus, it could try out limited runs, fiction content and more niche content. A smaller but paying audience creates a predictable budget that allows you to invest in specialized and innovative programming. “From the beginning, we were not just putting up a paywall and just sticking some stuff behind it,” Diehn says. “We were creating truly new content you couldn’t find anywhere else.”
The similar model Stitcher is already showing success, which has the benefit of greater reach (over 8 million downloads). “When we rolled out Stitcher Premium, soft-launched it, within the hour—within minutes—we had subscribers starting to trickle in,” he says. And Diehn says he’s already seeing healthy conversion rates and getting strong feedback.
Stitcher Premium promises to be a kind of Netflix for podcasts. Subscriptions will fund original programming. But it’ll also be a place where publishers of free shows can realize incremental revenue share if they move archival content and create bonus episodes that live within the pay service. Stitcher is experimenting with a range of deal structures, Diehn says, from attributed registrations for shows that drive subscriptions to revenue share on total listening, à la Spotify.