Li Jin @ljin18 Consumer investing @a16z. Beijing born + Midwest bred. MBA dropout. Alum: Product @shopkick, stats & English lit @Harvard. Lifelong artist. Loves tech & corgis. May. 23, 2019 2 min read

New post! Over 30% of Americans now regularly listen to podcasts, and here’s my (with inputs from consumer team and research) 68-page overview + investment analysis on the industry.
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2019 is the year podcasting went mainstream. The flywheel is spinning: AirPods + smart speakers + connected cars = more listeners = more revenue = more content.

There’s now over 700K free podcasts available and thousands more launching each week! It's a huge leap from just a decade ago, when a niche community of "audiobloggers" put out content for iPod users and web listeners.

1 out of 4 Americans are listening to podcasts weekly and industry revenue is at an all-time high. But there's challenges: dominance by a few platforms (Apple Podcasts, Spotify) and lack of monetization infrastructure.
Here’s some data from The Infinite Dial 2019 on growth:

Given all these challenges, how do some of us on the consumer team think about investing in this space? And what are the attributes of startups we're (including @andrewchen and @conniechan) looking for?

In this post, I trace the history of podcasting over the past 15 years, from desktop and iPods, to smartphones and smart speakers, including defining what a "podcast" even is.

Apple Podcasts is still in the lead with 60%+ market share, but Spotify has risen from nearly nothing until 2015 to almost 10%.
Here's some data from Libsyn and other sources:

The latest stats on listeners: there's still a gender gap in podcasting skewing male, but it's narrowing. And the demographic of listeners is still not your average American -- almost 1/3 have a graduate degree and 1/2 make more than $75K.

We created a taxonomy of podcast producers, which illustrates the power law of content. Everyone from media companies to public radio to (what @smc90 calls) "cult of personality" shows.

What the US podcast industry can learn from China audio apps like the unicorn Ximalaya: taking a broader view of what audio content can be--including interactive and social audio--and how business models can more closely align with product.

Podcast advertising is doubling year-over-year, but is limited due to lack of infrastructure, targeting capabilities, and attribution. Most shows don't monetize at all, and some hit shows with millions of listeners still need pledge drives!

We also discuss exits including Gimlet and Anchor’s multi-million dollar acquisitions and what they mean for the startup landscape.
And take a tour through what's going on in startup-land now: lots of new consumer apps, vertical audio apps, and VC-backed production studios.

For investments in audio, some of the factors we look for include:
- network effects
- full-stack startups (content + monetization + user relationship) when possible
- differentiated in-depth content
- alternative monetization models (@conniechan has written about outgrowing ads)

And finally, we outline a few ideas we’re excited about: vertical audio apps, social audio, & platforms to help creators monetize and establish deeper relationships with their audiences.

If you are working on anything related to the above, I’d love to talk more!

This piece took a village--thank you to my partners at a16z who helped with research and putting this deck together, @btcarroccio and @avesegal. And to @andrewchen, @conniechan, @benedictevans, @smc90, @ASalyers3 for their feedback and support!

You can follow @ljin18.


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