Podcasts Rise In Popularity, Funded By Advertisers And Listeners

Millions are downloading and listening to podcasts. It's the source of original material and growing ad revenue. Apple's iTunes has 1 billion subscribers, and advertisers are seeing dollar signs.

RACHEL MARTIN, HOST:

Every week, a million and a half people are listening to a murder investigation unfold. The show is "Serial" from the creators of "This American Life." But it's not a radio program. It's a podcast. And its wild success is evidence that more and more Americans are consuming audio this way. Jon Kalish reports on podcasting's breakthrough.

JON KALISH, BYLINE: There are hundreds of thousands of podcasts out there. Plenty of them are hosted by mainstream media personalities like Bill Marr, Snookie and Stone Cold Steve Austin. But most podcasts are created by hobbyists and amateurs.

(SOUNDBITE OF PODCAST, "CRAFTLIT")

UNIDENTIFIED WOMAN #1: Welcome to CraftLit, the podcast for crafters who love books. Episode 360.

KALISH: The CraftLit podcast weaves together actors reading classic fiction, literary commentary and information about knitting and other crafts. It's a niche audience with between 5,000 and 10,000 listeners. On the other end of the spectrum, is TWIT.

(SOUNDBITE OF PODCAST, "TWIT")

UNIDENTIFIED MAN #1: Netcasts you love...

UNIDENTIFIED WOMAN #2: ...From people you trust.

KALISH: This podcast network is devoted to technology. It gets 5 million downloads a month, and its annual ad revenue is $6 million. TWIT's ads are delivered by the host, much like the early days of radio. Mark McCreary is the CEO of the ad firm PodTrac.

MARK MCCREARY: Advertisers know that what the audience likes about the podcast is, in a big way, the host of the show. And so to hear what the host of the show thinks about their product or service makes a big impact.

KALISH: McCreary says host-read ads are often more effective than those produced by an ad agency. Though podcasts are gaining the attention of advertisers, that's not the only way they can make money.

(SOUNDBITE OF PODCAST, "THE COMEDY BUTTON")

UNIDENTIFIED MAN #2: We have a time tunnel.

(LAUGHTER)

KALISH: The Comedy Button is basically five friends goofing around for some half million fans who listen weekly. Brian Altano is a member.

BRIAN ALTANO: Our operating costs are comically low. It's basically just a couple cab rides and a couple pizzas.

KALISH: Their costs may be minimal, but The Comedy Button guys are pulling in more than $100,000 a year from fans who pledge continuing support through the website Patreon. Half of the top 20 podcasts on iTunes come from public radio. NPR produces many of its own. But crowd funding has been extremely helpful to independent producers who come from the public radio world.

(SOUNDBITE OF PODCAST, "99% INVISIBLE")

ROMAN MARS: Almost without fail, an architectural draft starts with one straight line and then another and another.

KALISH: Roman Mars hosts the design and architectural podcast 99% Invisible. It began as a short segment on KALW in San Francisco. It's now a podcast downloaded 2 million times a month by listeners all over the world. Mars raised more than a half million dollars on Kickstarter. He used to work for public radio programs, but says he likes podcasts because they provide a direct connection with listeners.

MARS: The listener has become a better and better customer over time. They want to support you. They're really excited about the show that we make here.

KALISH: Roman Mars also accepts ads for his podcasts. Podcasting has begun to blur the line between commercial and noncommercial programming. John C. Dvorak is a veteran tech writer and cohost of the No Agenda podcast. He says this new technology is also bringing into question the future of broadcasting itself.

JOHN C. DVORAK: I think it is disruptive. And eventually, when we have real-time Internet availability in a moving car, it's going to be very difficult for conventional radio to compete with this model. I just don't think it's possible.

KALISH: Internet availability in automobiles is increasing. Drivers of newer models can pair their smart phones with their car's sound system via Bluetooth technology. This means more and more Americans may be listening to podcasts instead of the radio in their cars. For NPR News, I'm Jon Kalish.

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