Podcasts and Digital Platforms: The Radio of the Present

Podcasts and Internet radio continue to gain ground over traditional media by betting on higher quality content and without a rigid schedule, however, they still face various technological limitations to reach more people.

Podcasts and Digital Platforms: The Radio of the Present Time. Photo: Pixabay
Podcasts and Digital Platforms: The Radio of the Present Time. Photo: Pixabay

Podcasts live their second air. The penetration of cell phones and greater Internet access among citizens has encouraged the son of traditional radio to experience a new boom. Attempts to improve the public signal have also fallen short of the advance of Internet radio broadcasts, as they can be heard anytime, anywhere via a mobile device.

The main difference between Internet platforms and conventional radio is that they are not tied to commercial or governmental commitments through advertising.

Although the United States is one of the markets with the highest number of digital transmissions, as of March of this year the global industry reported considerable growth in Spanish-speaking countries.

Chile led the group with an 83.95 percent advance, followed by Argentina with 55.28 percent, while Peru recorded an increase of 49.1 percent and Mexico had an expansion of 47.84 percent, according to a report by the audio technology company Voxnest.

Unlike conventional radio, only 6 percent of Mexicans listen to it over the Internet, reveals the 2018 National Survey of Audiovisual Content Consumption prepared by the Federal Telecommunications Institute (IFT).

But within that universe, 23 percent prefer this route, because they can tune in to their favorite programs if they need a fixed schedule and 17 percent is an alternative because they do not have commercials.

David Ochoa, a pioneer podcaster in Mexico, believes that among the factors that influenced consumers to convert this type of format in today's radio highlights the change of mentality, as they realized that they could listen online content with additional value, in addition to being produced to measure and without so much advertising.

The scenario has changed a lot because the content is more dynamic and although it has the basis of traditional radio, new generations have been responsible for promoting the podcast industry and the outlook for the future is very encouraging - David Ochoa, Podcaster

Podcasts advance without limitations

The first incursions of the podcast in Mexico occurred almost 15 years ago, however, at that time the format was not well understood by the audience. Today, social networks have become a good ally for more and more people to approach the programs.

Live radio broadcasts and podcasts such as Convoy's, founded by Olallo Rubio, have put the format back in the public interest, especially among the younger population. Convoy was born in 2016 as a declaration of independence, as its creator was not willing to sacrifice the creative freedom enjoyed by his successful podcast.

The former Radioactivo broadcaster teamed up with colleagues to launch an application of original podcasts, but the project gained momentum with the launch of live programs on December 4, 2017.

According to Iván Nieblas Leyte, host of Convoy's Rock Oracle program, the main difference between the online platform and conventional radio is that they are not tied to commercial or government commitments through advertising.

We make programs that in the traditional radio do not have much place because the interests of the brands and the owners of the money obey another type of interests and ideologies and can be quite conflictive for them. - Iván Nieblas

The music journalist assures that Convoy's only commitments are with the quality of the products and the people who pay the monthly subscription of 49 pesos.

This means that the budget of the project comes directly from the pocket of the final consumers. Unlike public radio, which depends on extensive blocks of commercials and government advertising.

In fact, one of the problems afflicting radio and other media is the cuts applied by the government of President Andrés Manuel López Obrador to spending on official advertising.

The situation on public radio is even more serious. Last June, the Mexican Institute of Radio (IMER) almost suffered a massive cut of 240 people and this year was allocated a budget 10.5 percent lower than the previous year.

The first incursions of the podcast in Mexico occurred almost 15 years ago, however, at that time the format was not well understood by the audience.

Added to this is the fact that when some radio stations get money from companies or the government, they face problems of censorship and creative limitations.

Podcasts in streaming, the reinvention of the industry

A report by the Interactive Advertising Bureau (IAB) and PriceWaterhouseCoopers (PwC) estimates that by the end of this year revenues will reach 678.7 million dollars, while by 2021 is expected to exceed one billion dollars, a potential that attracted industry giants such as Spotify, Apple, and Google.

For many years podcasts were associated with the company of the apple, as it knew how to link its platform to their devices.

In 2014, Apple's podcast application was pre-installed on all its devices (iPod, iPhone, and iPad), but in the last two years, its presence has eroded against Spotify's dominance, although it still holds the lead.

A Reuters Institute report reveals that Apple Podcasts has a global market share of 57.90 percent, while Spotify has 13.10 percent, followed by Google Podcasts with 1.79 percent.

Earlier this year Spotify slapped the table announcing a $500 million investment to boost its podcast division.

Since October 2018, when it launched its Beta version, the platform has added approximately 100,000 podcasters to its catalog and the number is increasing, thanks to general interest content ranging from economics, psychology, news, and fiction stories.

"Spotify and Apple's podcast catalog is made up of stories that generate a much more intimate interaction. In this kind of content what is most valued are the stories that can happen to anyone or that information that generates a benefit for people on the street," says Diego Andrade, podcaster of Historias del Llano and editorial director of the digital gazette Apuntes de Rabona.

Apple Podcasts has a global market share of 57.90 percent, making it the most popular of all such platforms today.

Value of the digital platforms

The growth that Convoy has experienced in the last two years demonstrates the sustainability of its business model, because it is very similar to the one that Netflix and Spotify have been using for several years.

The difference is that these platforms generate profits through content that, for the most part, does not belong to them, as they market movies, series, songs and podcasts created by third parties, while in Convoy all the content is one hundred percent original, a quality that gives the platform an added value.

But the road has not been easy for Olallo Rubio and his company, as getting a mobile application that matches the giants of Sillicon Valley required a lot of patience on the part of the team and the 'convoys'.

As Korno Espinosa, Convoy's general manager, explains, "the main challenge has been to update the application, bring it to all devices and make it work perfectly".

The main challenge has been to update the application, bring it to all devices and make it work perfectly. I think we've made it lately and the complaints are less. Right now it's working at 100, but we want to add more things to it, we don't want to limit ourselves. - Korno Espinosa

Regarding the creation of content, Espinosa points out that many of the ideas come from Olallo Rubio and Iván Nieblas, while the great audio quality of the podcasts and live broadcasts depends, to a large extent, on the work of the award-winning musician.

The challenge is to stay on the air

Mexico wants to become a giant of the podcast industry and although there are already programs and personalities that stand out in the business, its growth is still limited by several obstacles. The main one is money.

During 2018 in the United States 747 million dollars were invested in podcast advertising, while Mexico closed the year with only 23 million dollars, according to IAB and PwC.

Increased competition and the digital divide are some of the obstacles that limit the growth of the podcast industry in the country.

Some of the factors that influenced this were the lack of professionalism and that some of the producers are looking for ways to make their business models more profitable, however, this task is complicated by competition.

In this respect, David Ochoa states that another of the challenges they face is that independent producers often want to excel, but compete with large companies.

"When the digital platforms arrived, the podcast directories emerged and over time this created a monopoly leaving few opportunities for independent producers to get a place, which unfortunately subsists," shares the creator of Byte Podcast.

There are at least 14 genres in the industry, five of which account for more than 65 percent of advertising revenue: news (18.4 percent); comedy (13.9 percent); business (12.8 percent); education (10.6 percent); and art (10 percent).

Although podcasts and Internet radio are a magnet for advertisers, Mexico's consumer base is still low when compared to the United States.

A study by Edison Research and Triton Digital shows that four out of 10 Americans tune in to this type of content compared to two out of 10 Mexicans.

"The podcast represents small democratization of the media, but in Mexico is a very closed niche unlike other countries, because the biggest constraint is digital education," shares Diego Andrade.

Closing the gaps

Although Convoy has established itself as a real alternative to traditional radio, the acceptance it has gained among Mexican consumers suggests that it still has room to expand its user base.

However, one of the main challenges for the project is to overcome the economic and digital divide, as not all Mexicans have access to adequate technology.

Although the digital divide has narrowed in Mexico, according to INEGI's Survey on Availability and Use of Information and Communication Technologies in Households 2019, only 40 percent of the rural population has Internet access in contrast to 73 percent of the urban sector.