DETROIT – A year ago podcasting was just a fad with a cool name. In recent weeks, the format has taken several steps toward becoming big business, but the major record labels are not eager to partner with the growing format.
The audio blog phenomenon that began as free, grassroots rantings is being commercialized through advertising and subscription fees, CNET.Com reported.
In early March, for instance, Ricky Gervais, the creator of the British sitcom “The Office” began charging $2 a pop for his comedy-themed podcast after generating 250,000 downloads per week from Apple Computer’s iTunes Music Store. “The Ricky Gervais Show” is the first major podcast to charge a fee.
Media companies like National Public Radio (NPR) and Clear Channel now sell 10- to 30-second commercials for their podcasts, prompting the emergence of start-ups formed to insert ads into amateur podcasts whose creators are unable to sell the ads themselves.
The trend has expanded into the mobile space. On March 27, Mobile podcasting service Pod2Mobile introduced an automated advertising program that inserts 20-second audio ads at the beginning of participating podcasts.
The motivation is clear. A recent eMarketer report predicted that podcast advertising spending will increase from an estimated $80 million this year to $300 million by 2010. Venture capitalists at Sequoia Capital-which participated in the $8.85 million funding of podcasting pioneer PodShow-say the market could grow to as much as $2 billion in the next five years.
Of course, to reach these figures, podcasts need listeners. According to Bridge Research, there are about 9 million podcast listeners today. Conservative analyst projections peg that the audience will reach around 12 million in the United States alone by 2010.
The “corportization” of podcasts is contributing somewhat to this growth, as the big media brands take over the format from the geek fringe. But almost every pundit agrees the biggest killer app for the format is the one most difficult to obtain-music.
To date, the major labels have been reluctant to license full-track songs to the podcasting community because podcasts are downloaded files free of digital rights management protection.
But there has been some movement on the musical front. Noncommercial radio station KCRW Los Angeles has posted audio podcasts of its programming since last March, and in January expanded into video podcasting.
On a case-by-case basis, KCRW has scored permission from major labels to podcast the in-studio performances of acts that appear on its “Morning Becomes Eclectic” show. Such acts as She Wants Revenge, Medeski Martin & Wood and Robbie Robertson are included. KCRW plans soon to launch a “Song of the Day” podcast, featuring music by emerging bands.
But the music in these podcasts is limited to what is recorded in the studio or from independent acts. Getting full-track studio cuts of major-label content is next to impossible.
“The major labels aren’t interested in digital distribution or promotion through podcasting,” KCRW assistant general manager Jennifer Ferro says. “I think they’re waiting for it to go away.”
Emerging to meet this challenge are companies focused on distributing podcasts over wireless networks. NPR, with KCRW, made a splash March 27 by becoming the first major media company to contribute its podcasts to the Mobilcast wireless podcast service from Melodeo.
Mobilcast, like Pod2Mobile, streams podcasts to mobile phones. Because there is no download, labels do not have to worry about distribution of unprotected files.
Others include start-ups-like PodSafe and the Independent Online Distribution Alliance’s Promonet service-that aggregate libraries of tracks that participating labels have cleared for widespread use in podcasts.
But aside from the case-by-case exceptions, major labels are still not onboard. Some artists signed to these labels are beginning to express frustration.
“Podcasts are this big unknown to them,” said Brandon Curtis, vocalist for Reprise act Secret Machines. Tracks from the band’s album “Ten Silver Drops,” due April 25, have been sent to MP3 blogs and leaked to file-sharing sites as part of a pre-release buzz campaign, but have not been included in podcasts.
“Record company people have agendas. The music can go on some ESPN sports highlight program, but it can’t be on a podcast? Whatever,” Curtis said.
