- The first 16 years of podcasting took what we can now see as a predictable path, as advertising became the dominant source of revenue for podcasters. In that environment some have thrived, many have struggled and most have just bailed out. It's media after all. And, it's what we've come to expect over generations of honing this familiar broadcast and print revenue model. It seems like the only way.
- But, that tired model has some major drawbacks. For one, listeners already feel there are too many ads in podcasts, even though podcasting revenue has yet to top $1 billion. At this trajectory, we're looking at podcasting becoming an ad-filled dumpster fire similar to what YouTube has now become. (Hey Google, my 10 year old doesn't care about the new Ford Bronco pre-roll when she's trying to watch a Minecraft video.) I frequently hear the new era of YouTube described as "unwatchable". Nobody wants podcasting to become "unlistenable."
- Another big issue here is that it's only the podcast creators themselves that enjoy the wildly top-heavy spoils of advertising. Every other link in the podcast chain (hosting companies, analytics, app developers, etc.) must eek out an existence some other way, even though they are critical pieces of the ecosystem.
- Just as predictably as the advertising model showed up to embrace this young medium with it's Lovecraftian tentacles, there has been, every few years, another big entrant into the market promising that their "platform" will level the revenue playing field and broaden the pool of ad money so that smaller participants can get a sliver of the pie. The result has been even more tired, empty host reads within podcasts for products that neither the hosts nor the audience care that much about. In the future this will morph into more and more canned pre, mid and post roll ads. It's as predictable as death and taxes.
- One encouraging trend that has emerged is the rise of "memberships", where podcasters sign up with a membership management service to allow, and encourage, their audience to support them directly through those platforms. This is definitely better than advertising, and the inherent self-censoring it brings with it. But, it now puts a middle-man between the podcaster and the audience. And, it's yet another point of de-platforming, where your money pipeline can be snatched away from you if someone complains about your content - no matter if what they say is accurate or truthful.
- And, what about the high fees (minimum of 5% plus transaction costs)? What about the privacy (maybe your audience doesn't want to expose their data)? Are these services looking out for the best interests of the listener, the podcaster or themselves? Not to mention that, the idea of "private" member feeds, where your content is intentionally knee-capped for most of your audience is kind of gross. It's an ugly bolt-on to what is inherently an open system.
- So, what to do? Is there an alternative?
- From day one at Podcast Index we've had two missions: preserve podcasting as a platform of free speech. And, to transform podcasting into a platform of value.
- Mission number one is well underway. We are giving away our full index of podcasts (now in sqlite format) as a free download, updated every 24 hours over IPFS. And, we will continue to explore more ways to decentralize our directory, and our API so that there is no single point of failure.
- Mission number two (the getting people paid part) has been harder, but it’s now working. Using the <podcast:value> tag to interop with the Bitcoin Lightning network, listeners are today, on a minute by minute basis, streaming value back to podcast creators in a purely open world of RSS with no arbitrary limits, no middlemen, no tracking, and no barriers to entry. It's not theoretical. It's not just a whitepaper. It's fully functional right now.
- Last month, we saw more than 10,000 minutes of streaming micro payments being sent directly from listener's wallets to podcaster's wallets using Lightning's "keysend" protocol. And, for once, developers like Sphinx.chat and podStation (with more on the horizon) are firmly in this value chain, taking part in the value flow just like the podcasters. The total value right now is still small. But, in time this will scale to real, life-changing money.
- Apple taught app developers early on in the smartphone era that their product was only worth $.99 on an app store. Spotify is now telling podcasters that the hours they spend on their product is worth about $2.99 a month, or maybe $4.99. Perhaps as high as $7.99. Maybe... if you sign up for a licensing agreement that includes god knows what. And, just like the silo’d app stores, guess who gets screwed again this time: app developers. They get no cut of that $7.99, because they're not invited to the party.
- But, what if I truly love your podcast? What if, to me, it's worth $50 a month? Or, $100? Or, $1000? What if a single episode (or even a clip) is so enlightening or entertaining that I want to drop you $25 even though I don't intend to ever subscribe as a regular listener. I should be able to do that with a single tap in an app. And, the app that created the clip that was shared with me? They should get a cut of that $25 as well.
- With this new open, decentralized <podcast:value> marketplace, developers take a percentage of all the payments that leave their app, which is exactly how it should be considering that without a podcast app there is no such thing as Podcasting.
- It has taken lots of work to get to this point, and there are still a mountain of bugs to be fixed, on-boarding hurdles to be solved and documentation to be written during late nights and coffee fueled lunch breaks. But, in the end we will (and already do) have a working system that finally allows podcasters to escape from the advertising revenue model and connect financially to their audience using modern, programmable money.
- Just like the "podcast" namespace was needed to make sure the open, RSS-based ecosystem could compete, feature-wise, with the big closed systems, there has to be a similarly open source way for podcasters to get paid. A podcaster has to be able to spin up a Lightning node (even at home on a Raspberry Pi), drop that payment address into their RSS feed, and start getting paid immediately. No third parties. No gate-keepers. Just a direct link to your listeners through RSS. It's powerful stuff.
- If we don't create this together, podcasting will never be truly open. Those who control the money will ultimately always control the message. We want to make sure it's the creators (and their audience) who are the ones in control.