Forget fighting for eyeballs. The competition for ear time has become the growth opportunity in the digital media landscape.
Podcasts reach 104 million Americans every month, according to Edison Research released in March 2020. Awareness only continues to blossom. Seventy-five percent of Americans over the age of 12 are familiar with podcasting, up from 70% in 2019, according to Edison.
Podz, an app that launches Wednesday, hopes to be a highly curated and personalized feed for listeners to discover podcasts. By analyzing hobbies and interests, the company uses machine learning to create a digest with the most compelling 60-second sound bite for each listener, combining them into an experience that’s a “perfect blend of fast-moving social media and thoughtful audio commentary,” according to the company. If intrigued by a highlight, listeners can choose to play the episode in its entirety.
“Podcasts are largely siloed. There’s no rising tide to lift all ships for audio creators, yet they’re way more interesting than the average Instagrammer. We want to help creators get more listenership,” Founder and CEO Doug Imbruce told Yahoo Finance in an exclusive interview.
Audio programming has been having a multi-year moment, with tech companies investing heavily in the space. Amazon (AMZN) acquired podcast publisher Wondery in December. In September, Apple (AAPL) acquired Scout.fm, which creates personalized podcast stations.
The player to beat
Still, Spotify (SPOT) is the player to beat. Spotify converted more than 20% of its 320 million music users into podcast listeners, Bloomberg reported last month. The streaming service had a purchasing spree, swooping up companies that specialize in all facets of the podcasting business. The company now owns Gimlet Media, The Ringer, Megaphone, Anchor and Parcast, and has struck deals with high-profile names like Joe Rogan, The Obamas, Brené Brown, and Prince Harry and Meghan Markle, among others.
Imbruce says his mission is to be a neutral place where all creators want to come. Currently, the company doesn’t have any platform exclusives available.
As podcasts continue to take up more and more ear time, new audio-only social network Clubhouse has also been encroaching on the space. A forum where anyone can start a conversation, it’s been likened to a place where interactive podcasts can take place.
“We’ve obviously spent a lot of time thinking about it. We just have to celebrate any innovation in audio. It opens up more opportunities. We want to elevate the most appealing fundamental behavior that audio unlocks — collaboration,” he said.
Imbruce’s entrepreneurial journey started a decade ago, and he’s been tinkering with consumer apps ever since. In 2011, Imbruce founded Qwiki, an iPhone app that surfaced events from the camera roll and created shareable short movies. Yahoo bought the startup for $50 million in 2013, beating out offers from Apple and Dreamworks, and ultimately shut it down the following year.
He said his core belief is that machine learning can be a creative tool. “We are huge podcast fans, saw an enormous gap in the amount of high-quality audio being created, and the amount being discovered,” he said.
The golden opportunity for audio
While podcasting, also known as autoblogging, has been around since the 1980s, it only gained mainstream popularity with the creation of personal audio devices like the iPod. And unlike over-the-top streaming video platforms like Netflix (NFLX) and Hulu (DIS), proper discovery and monetization have been nonexistent in the podcast space, according to Imbruce.
To facilitate more discovery, the Podz team manually tagged over 100,000 hours of content that converts into 60-second highlight sizzles.
“We are living in a golden age of audio, but only 1% of podcasts reach an audience of at least 5,000 people. The growth of audio is leaving individual creators behind, and Podz equips these creators with the distribution tools needed to increase their reach and discovery,” said Latif Peracha, General Partner of M13, a Los Angeles-based venture capital firm that led a pre-seed investment of $2.5 million.
At launch, the relationship is a one-way direction, but the goal is to give listeners a direct line to podcast creators. There’s a chance for users to tip or offer subscriptions, a la Patreon, a membership platform that helps artists get paid.
In addition to M13, Podz is backed by Canaan Partners, Charge Ventures, humbition, as well as Paris Hilton and journalists Katie Couric and Mara Schiavocampo.
Melody Hahm is Yahoo Finance’s West Coast correspondent, covering entrepreneurship, technology and culture. Follow her on Twitter @melodyhahm.