Podcasts Provide Labels New Way To Grow Streaming Revenue
As audio formats have changed over the decades, from vinyl to cassettes to CDs to MP3s to streaming (and back), the music industry has become accustomed to adapting. The latest surge in consumption of audio content is the growing podcast craze, and now record labels are hoping to capitalize on the movement.
While many radio broadcasters have already made the jump into podcasts, the idea of record labels producing their own content to utilize as both a marketing tool and additional monetizable content is rather new.
A new Billboard feature examines this phenomenon, looking at Sony's effort to pilot a podcast called "The Lost Art Of Liner Notes," which pairs A&R rep Jeremy Maciak with singer/songwriter LP to discuss her song "Switchblade."
"I'm very aware this will become a significant revenue-generator down the road," an unnamed major-label executive tells Billboard. "My goal is to start building a library and an audience for our talent, so you can monetize appropriately once the market becomes mature."
According to a recent study, about 40 percent of all U.S. adults have listened to at least one podcast, and advertising revenue from the 20 leading podcast companies increased by 72 percent in 2016 from the previous year. It's expected to jump another 85 percent in 2017.
These lucrative numbers have made podcasts the format of choice for everything from sports commentary to fiction series in recent years, and now record labels hope to add their artists' stories to the mix and claim their own piece of the pie.