However, once you look past the “glass half empty” headline you’ll see real opportunity. Opportunity to do so much better. Opportunity that was really the reason a group of forward thinking people decided to form the Association for Downloadable Media.  How about, “Podcasting Not Too Profitable…Yet!”

First, let’s look at some of the facts about podcasting consumption. After all, you can’t make money on a product or service unless there are people using it, right? Well podcasting is being used…alot. This fact will be reinforced by data to be presented during our May 21st webcast with Edison Research’s Tom Webster and that same fact was noted in data the aforementioned eMarketer have themselves touted as recently as March 9th of this year. “As a percentage of Internet users, podcast downloaders will grow from 9% in 2008 to 17% in 2013.”

To be clear, when eMarketer states that “The appetite for podcasts is fairly light” they are referencing the appetite of media buyers, not podcast users. So, it’s not a matter of finding audience, it’s a matter of increasing the appetite of advertisers for, or even making them aware of the existence of, that audience.

We must seize the opportunity. Or as Tom Webster says in his Infinite Dial post, “Projections generally describe a possible future–perhaps even a probable future–but not the only future. The key is, what are podcasters going to do to change it?” Downloadable media producers (in this case podcasters, must work harder, whether it’s  an organized manner through the ADM, or by individually approaching advertisers to sing the praises of reaching consumers through this new and highly personal medium.

While eMarketer* “projects” ad spending will increase to $43 million in 2013, we will continue to champion a medium that is growing in appeal and audience to those that seek to reach that audience. Enough so that the current projection looks like chump change when we look back at it.

(*Update: As noted below the “projection” was that of Zenith Optimedia rather than eMarketer’s.)

When the iPhone exploded onto the market, it certainly turned the conversation back to mobile (in a good way) here in the US and even abroad where Europe and Asia are further ahead. It also shifted the focus from the carriers and the concept of ‘on-deck’ towards the devices, many of which are media-enabled and allow users to obtain content directly from whatever sources they choose. Mobile video, just like podcasting, has gone through many phases of interest, buzz, and market projections. Similar to how Napster fueled the online music movement (later won by Apple) and as YouTube propelled online video, it’s quite possible that the iPhone (or media enabled devices) combined with the resurgence of podcasting can push ad-supported, downloadable media into the mainstream. Especially given podcasting’s benefits (e.g. subscription, download, and device readiness), it seems reasonable that these two spaces are likely to enjoy some cross promotion. A terminology post would be useful at some point regarding the best category definition of the media whether it’s downloadable, portable, mobile, on-demand, or some other term.

In June last year, Nielsen published a report on mobile video. Some of the key findings included:

• As of Q1 2008, 91 million (36% of all mobile phone subscribers in the U.S.) owned a video-capable phone. As more subscribers upgrade to phones capable of receiving mobile video, subscription cost, promotion and network speeds will be the primary challenges to the growth of mobile video consumption.

• As of Q1 2008, there were already 13.9 million persons (6% of U.S. mobile subscribers) paying for a mobile video plan, up from 8.4 million (4% of all mobile subscribers) in Q1 2007.

• 4.4 million persons (2% of U.S. mobile subscribers or 31% of those who subscribe to mobile video) report that they watched mobile video with a mobile video subscription.

• In addition, 95 million persons (37% of U.S. mobile subscribers) subscribed to mobile Internet as part of their mobile data plan in Q1 2008, a significant platform for mobile video consumption.

As an industry, connecting podcasting into the mobile discussion can help accelerate the recent eMarketer audience numbers towards a more mainstream conversation (say over 60% of US Internet users as opposed to 17%). This combined with ADM driving the standards and awareness, should fuel a bigger and more efficient advertising market that benefits us all.

Jeff Karnes
VP Marketing and Products
VoloMedia, Inc.