Conan O’Brien never planned on becoming the darling of the podcasting world.

“It’s not the natural career step,” he says. “I have a talk show, and it felt like maybe you do the podcast in order to get on TV. But when my staff approached me about it, I kind of thought what the heck? What do we have to lose?”

Despite its star’s initial reservations, “Conan O’Brien Needs a Friend,” an interview program in which the late-night comic engages in free-form chats with everyone from “Barry” creator Bill Hader to historian and Pulitzer Prize-winning author Robert Caro, has become the breakout hit of the audio season. It commands more than 1 million downloads an episode — blockbuster numbers for a podcast — and has inspired O’Brien and his team to create a spinoff show with sidekick Andy Richter, as well as scripted podcasts such as “Frontier Tween,” a satire of prairie life, and “Smartr,” a startup-culture sendup. “Conan O’Brien Needs a Friend,” the show that started it all when it launched last November on Stitcher’s Earwolf comedy network, recently signed a mid-seven-figure deal with podcasting network Midroll that will keep it going for two more seasons.

Perhaps more important, it has also enabled the television host to connect with fans who may have cut the cable cord or tuned out of his TBS show “Conan” in favor of streaming programming.

“My TV habits have changed completely,” says O’Brien, who has been on late night since 1993, first at NBC and later at TBS. “I used to be someone who checked out late-night TV all the time. But I wouldn’t be watching me right now. I’d be binge-watching ‘Killing Eve.’”

O’Brien’s not the only big name looking to connect with audiences through earbuds. A confluence of A-list talent is trying to create the next downloadable smash. At the same time, a medium once seen as more of a hobby than a vocation has been professionalized as it’s grown more profitable. “There’s been a creative explosion around podcasting, but in terms of the business opportunities, we’re still in the early stages,” says Jacob Weisberg, who co-founded podcasting company Pushkin Industries in 2018 with The New Yorker writer Malcolm Gladwell.

Right now, this brave new world of audio is mostly filled with as-yet-unrealized potential. However, a swelling listener base and the accelerating migration of major advertising dollars to the platform have led to an influx of investors and technology companies. It’s easy to see what excites them. After all, the number of weekly podcast listeners has more than doubled in the past five years, from 28 million in 2015 to 62 million in 2019, according to a study by Edison Research and Triton Digital.

As the audience has grown, so have the valuations for companies who were the quickest to get into the space. In January, Spotify spent nearly $340 million for podcasting studio Gimlet Media and hosting provider Anchor before buying scripted-podcast producer Parcast. Then came the launch of Luminary — a startup aiming to become the Netflix of podcasting, a new and unproven business model for the medium — with $100 million in backing and exclusive content.

Earlier this month, radio broadcaster Entercom Communications inked deals to acquire podcast companies Cadence13 and Pineapple Street Media. Entercom is playing catch-up to rival iHeartMedia, which doubled down on the sector by snapping up podcast pioneer Stuff Media last fall for $55 million. Meanwhile, Apple is said to be looking at funding original podcasts, and Sony Music Entertainment has formed a new venture with podcast vets Adam Davidson and Laura Mayer, Three Uncanny Four Productions.

“Podcasting has always been a slow build, but it’s spiked even in the last year,” says Tom Webster, senior VP of Edison Research.

A big reason for the new investment is a mounting belief that podcasting is untapped land with gold to extract. It commands a sprawling audience, with more than a quarter of Americans listening on a weekly basis, but it’s a medium that isn’t being aggressively monetized. U.S. ad revenue for podcasting is projected to hit $679 million this year, per a PricewaterhouseCoopers and Interactive Advertising Bureau forecast. That’s just a fraction of that of more-established media like TV and radio. And it translates into 3 cents of revenue per podcast listening hour — less than one-third that of radio or television, according to Nielsen data.

“Audio punches below its weight in terms of a national profile,” says Gimlet CEO Alex Blumberg, whose company is behind such hits as “Homecoming.”

Initially, podcasters had to struggle to get ads. Early on, it was usually direct-response marketers like Mailchimp or Trunk Club that hawked their wares on podcasts, because they could track exactly how many hits they got on their ads. Now, major brands such as BMW and State Farm are sponsoring shows.

“You can tell when people think something is going to make money because of who starts emailing you,” says Tommy Vietor, co-host of “Pod Save America,” a liberal political talk show that averages nearly 2 million downloads an episode. Attitudes have changed, remembers Jon Lovett, Vietor’s “Pod Save America” co-host.

“When I used to tell people that I was going to start focusing on podcasting,” he says, “they’d sort of put their hand on my shoulder and look at me sympathetically.”

Podcasting is attractive partly because of its profit margins. The most popular podcasts can make north of $10 million annually, and costs are minimal, often boiling down to renting studio space or paying someone to produce a show. “The capital barrier to entry is low so you don’t need to be a part of a big company to make a show,” says Luminary CEO Matt Sacks. “All you need to be successful is a good idea.”

True, not many podcasters make a living at the craft. There’s a torrent of programs out there, but only the very top shows earn significant money.

On Apple Podcasts alone, there are more than 750,000 shows — and Google says it is indexing the content of more than 2 million individual shows. “Anybody can make a podcast. Not everyone can make a podcast people want to listen to,” says PwC partner David Silverman, who co-leads the firm’s emerging company services national practice.

It’s likely that only 1,000 of the biggest podcasts draw a significant audience, says Norm Pattiz, founder and executive chairman of PodcastOne, which distributes and produces more than 300 shows. He sees that as an opportunity: “Until that 1,000 becomes 50,000, we’re a long way from tapping out.”

A surge of high-profile talent in the space and higher production budgets promises to accelerate the format’s popularity. Celebs who have flocked to the game include Will Ferrell, Dr. Phil and Oprah Winfrey. Actor-comedian Joe Rogan, previously best known for hosting TV’s “Fear Factor,” has helmed talk show “The Joe Rogan Experience” since 2009, and it’s now one of the industry’s top podcasts. Then there are ex-President Barack Obama and former first lady Michelle Obama, who in June announced a deal through their Higher Ground Prods. banner to develop podcasts exclusively for Spotify, some of which the Obamas will host.

“I’ve never seen more interest from the highest levels in a new medium,” says Oren Rosenbaum, UTA’s head of emerging platforms.

Podcasting as a format dates to the early 2000s, and the earliest entrants came from the radio world — National Public Radio remains the No. 1 podcast publisher, according to research firm Podtrac. Industry observers trace the current boom back to two seminal events in 2014: Apple’s move to include the native podcast app in its iOS 8 operating system, followed just a few weeks later by the debut of true-crime podcast “Serial,” hosted by Sarah Koenig, which became the first watercooler hit.

The podcast landscape comprises a blurring mélange of players. Those include platforms like Apple, Spotify and SiriusXM/Pandora; networks like iHeart, PodcastOne, Westwood One and Cadence13; producers like Wondery and Gimlet; publishers and distributors including NPR, Slate, and Public Radio Exchange; apps like Overcast, Castbox, Stitcher and Himalaya; ad networks including Midroll and AdvertiseCast; and hosting providers like Spotify’s Anchor, Libsyn, Blubrry, Podbean and SoundCloud.

The New York Times stepped into the fray with “The Daily” in February 2017, formulated as an in-depth explainer about current events. It became an aural sensation, vaulting the Times’ overall U.S. podcast listenership to 8.4 million uniques this past June. Michael Barbaro, the Times reporter who hosts “The Daily,” chalks up the success to timing. “‘The Daily’ came along when everyone was getting deluged by cable news and headlines,” he says. “It’s a format to truly understand one thing in 20 minutes.”

In a bid to hit scale in the podcast biz, players like iHeart turned to acquisitions. Since buying Stuff Media, the company has boosted its output nearly five times and premieres upwards of six shows each month, says Conal Byrne, president of iHeartMedia Podcast Network. It generates 130 million downloads monthly and cross-promotes its lineup to 150 million listeners across iHeart’s business.

iHeart’s slate of new shows includes Ferrell’s “The Ron Burgundy Podcast,” in which he reprises his clueless “Anchorman” character, as well as more than 100 podcasts from its on-air talent like Bobby Bones’ Nashville interview podcast “BobbyCast” and morning show “The Breakfast Club.” Now iHeart is looking to expand overseas: By the first quarter of 2020, it plans to translate six podcast series into Spanish, Hindi, French and other languages.

“iHeart is in the business of companionship,” says Byrne. “You have this audience that’s deeply engaged. It’s more like they’re listening in to a friend than a radio program.”

While the most popular podcasts are interview-based or journalistic narratives, that could change. Wondery CEO Hernan Lopez thinks there’s rich soil to farm in scripted entertainment. Three years ago Lopez, the former longtime head of Fox International Channels, left to become a podcast entrepreneur. Wondery, focused on emotionally immersive stories, has raised $15 million with backers that include Disney.

“In television, there was a before and after VOD,” Lopez says. “You had shows like ‘Friends’ in the ’90s. Then TiVo is invented, and that’s when you get ‘Sopranos,’ ‘Mad Men,’ ‘Breaking Bad.’ It dawned on me there was going to be a new golden age of storytelling in podcasting.”

The first year was rough, Lopez concedes. Then in 2017, Wondery had a hit with true-crime series “Dirty John,” co-produced with the Los Angeles Times (adapted as a TV series, originally on Bravo and moving to USA). It has followed with other top shows, including “Dr. Death” and “Business Wars.” Other Wondery series have been optioned for TV by Universal Content Prods., FX and WarnerMedia, including “Over My Dead Body,” to be produced and directed by Elizabeth Banks for WarnerMedia’s HBO Max streaming service. Wondery typically spends in the “low six figures” on the production and marketing of its event miniseries.

Spencer Brown, who leads the 55-employee Cadence13, now under Entercom’s wing, acknowledges that podcast production is far cheaper than making a TV show or film. But costs run the gamut: A simple interview program can cost as little as $5,000 to produce for an entire year. Cadence13’s higher-end productions, such as “To Live and Die in L.A.” and “Gangster Capitalism,” run in the mid-six figures. “We reverse-engineer the budget in terms of frequency — is it daily, weekly or monthly — and what the potential audience is,” he says. “Then we sort of take that audience and put it against what we feel we can get on a CPM,” referring to advertising cost per thousand impressions.

CPM rates for podcasts range from $10 to $50 or more for the most coveted shows. Radio CPMs, by contrast, are as low as $2 to $3, although radio usually has a broader audience than podcasts do, says Michelle Bovée, a researcher at IPG Mediabrands’ Magna. One factor that could be holding back more brand advertisers from jumping into podcasts: There’s nothing analogous to a Nielsen TV rating. The standard metric for quantifying podcast consumption is downloads, or the number of times individual episodes are accessed. “If there were an independent verification system, the revenue might be higher,” says Wondery’s Lopez.

Some people in the industry argue that podcasts should increase the number of ads they air. They note that podcasts average three spots per listening hour compared to 18 for radio. However, others believe that cramming more ads into programming will hurt the business.

“There’s a danger in doing that,” says Bryan Moffett, the COO of National Public Media. “Right now we can command a premium, but if you have more ads, prices will go down.”

To Edison’s Webster, the biggest impediment to podcasting is the feeling among some consumers that there’s nothing exciting for them to listen to. “There’s a perception that podcasts are catch-up radio,” he says. “To me, they just need to find the show for them.”

Moses Soyoola, general manager of Endeavor Audio, wants to deliver shows for just such a crowd. Established 18 months ago by the media and agency conglom, Endeavor Audio is developing programming for untapped audiences. “Companies that come in and think, ‘Hey, I’ll make a true-crime [nonfiction] podcast,’ aren’t going to expand the audience,” Soyoola says. “More broadly, we see black and brown audiences as really underserved in podcasting.”

One of Endeavor Audio’s first projects was “Blackout,” a scripted apocalyptic thriller starring Rami Malek that’s reminiscent of 1930s-era radio plays. The show has been singled out for critical acclaim since its early 2019 release. “It showed if you create that kind of content, the audience will be there,” says Soyoola.

“You can tell when people think something is going to make money because of who starts emailing you.”

Tommy Vietor, “Pod Save America” co-host

Given the economics of podcasting, Malek couldn’t earn what he could get from “Bohemian Rhapsody.” But the project gave the actor the opportunity to take a producer role and incubate intellectual property. Also, it took him just two days to record.

Endeavor Audio this year also launched a popular podcast hosted by WWE’s Bella Twins. Upcoming projects include a scripted prison-break series from Dick Wolf Prods. coming out in the fall and a trivia game show called “Factorious.”

The sector’s jump has given rise to podcast-native influencers, entrepreneurs who have built small media empires with extensions in books, live events, merchandise and other projects. Take Rachel Hollis, the host of the top-100 podcast “Rise,” a weekly show about business strategies for women. She co-founded media firm the Hollis Co. with her husband, Dave Hollis, a former Disney distribution chief.

Hollis, who started out as a parenting blogger, decided to launch a show when she realized there weren’t any business podcasts by women who create content. “For me, it was: Be the change you want,” she says. Podcasts are just one revenue stream for the Austin, Texas-area company; Hollis is also a best-selling author of motivational books, and the company produces conferences and runs a lifestyle website (TheChicSite.com). For a personality-based brand, the biggest constraint on the company is her time. “I have only so many hours in the day,” she says.

With the rapid ascent of podcasts, experienced talent can be hard to find, says Liz Gateley, head of creative development for Spotify Studios. “There are prolific storytellers in this space, but there aren’t enough of them,” notes Gateley, previously head of programming at Lifetime. “Film is 100 years old. Podcasting is only 15 years old.” In the six months since Gateley joined Spotify, her team has inked nearly 30 development deals for original shows.

Technological advancements continue to spur the medium. Starting with the iPhone, smartphones have created an environment where podcasts can flourish. Faster mobile internet speeds will be a boon, along with rising adoption of smart speakers and connected cars. But even with momentum and money, podcasting isn’t in the same league as other mass media. While 51% of Americans say they have listened to a podcast at least once, only 32% of the population (90 million people) are monthly listeners and just 22% tune in on a weekly basis, according to the Edison/Triton research. Podcasting today represents 4% of the $16 billion total audio market ad spend (i.e., the money is mostly radio) and will approach only a 10% share in the next five years, according to a forecast from Magna.

Is there a natural ceiling to what could ultimately be a niche medium? Absolutely not, Gimlet’s Blumberg insists. “This is the oldest form of communication human beings have ever had — it predates the written word and video,” he says. “There are a lot of people in the world, and now there are going to be podcasts for everyone.”

Some of what made podcasts catch on was that they were scraggly and more idiosyncratic than streamlined and conventional forms of entertainment. Many of the new entrants in the space point to the work of Marc Maron and to Dan Carlin’s “Hardcore History” — the two were early adopters who developed followings because they weren’t just trying to make a buck. There are concerns that corporatization makes it more difficult for that kind of programming to shine, particularly as more celebrities launch shows.

But just attaching a Hollywood name to a project doesn’t ensure it will take off. “What matters is making a good podcast, and that requires putting the time in,” says Gabriel Roth, editorial director of audio at Slate, a media company that has more than 25 active podcasts including hits such as “Slow Burn” and “The Gist.”

For O’Brien, part of what’s working is his palpable excitement for exploring a new medium. The show allows him to be looser with guests and to ask serious, probing questions without having to worry about cramming in as many punchlines as he can before cutting to commercial. As he’s grown more comfortable, he’s letting his comic guard down and showing a side of himself that is more vulnerable. “It’s not just silly comedy,” says Matt Gourley, O’Brien’s podcast producer and co-host. “You see him go to a wonderfully dark place sometimes and be more real.”

O’Brien says he’s been emboldened to experiment with the show because podcasting is so different from television.

“There’s a way that you can communicate on podcasts that’s much more intense,” he says. “This is a big part of people’s lives. They put on their earbuds, and you’re with them at the gym or on the subway. I never foresaw how much this show would mean to people.”