Subscriber conversion rates for paid podcasts could go higher than many in the industry think – but only if publishers are willing to invest, according to Immediate’s head of podcasts.
Ben Youatt told the Media Voices Publisher Podcast Summit in London on Wednesday that willingness to pay is “definitely the biggest challenge” in a premium strategy because podcasts have been mainly free for so long.
He said the typical conversion rate for free to paid listeners within a year of launching a subscriptions strategy is generally considered to be up to about 5%. But he believes this is “undercooked” and it could go as high as 7% to 8%.
Immediate itself is on a rate of about 4% or 5% currently, with subscriptions comprising about 10% of its overall revenue from podcasts.
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Immediate publishes magazines including Radio Times, Good Food and Gardeners’ World and has around a dozen mostly ad-funded podcasts.
Immediate chief executive Sean Cornwell told Press Gazette last month the publisher has around 20,000 paying subscribers for podcasts which have so far reached 250 million downloads. Podcasts are “comfortably” a seven-figure revenue line, he added.
Immediate’s biggest podcast, History Extra, launched a paid subscription offering ad-free listening and bonus content in December 2021. It initially cost £1.99 per month but has since risen to £2.99.
The same podcast benefits can be found by signing up to History Extra’s online subscription for £5.99 but Youatt said the brand has a “podcast specific audience” largely reached via Apple Podcasts.
Apple podcast subscriptions are not available to Android phone users. Youatt said Immediate is looking at “cover-all” solutions that would work on any podcast player.
Discussing the proportion of listeners who may pay, Youatt said: “I think the crux of this is that you can drive conversion in line with how much you’re willing to invest. So we’ve experimented with this quite a bit over the last few years and the more you do to give users added value and the more you can signpost that, the more typically you will see conversions start to pick up.”
At the start of its own strategy about three years ago, Immediate simply gave paying users ad-free listening to avoid users feeling like things were changing too much at once. But then, after adding more exclusive bonus content, Youatt said they “started to see people start to lean in more”.
“And typically the metric that you hear about industry-wide is that whatever your overall size of your actual free listening audience is, you can typically expect 4-5% conversion rate after six months to a year.
“I think it’s probably undercooked. I think you could probably go further than that, 7% or 8%, but you do have to offer a heck of a lot more. If you’re willing to do weekly bonus episodes that are only for subs, if you’re willing to do live event inclusions, if you’re willing to build a community, then you could push it to maybe 7% or 8%.
“But that is a heavy commitment and you have to have enough scale in your original audience size to justify that, and you have to charge a higher price point to mean that the cost per user on your subs business is greater than the cost per user on your ad-funded business. It becomes quite complicated.”
Paying for podcasts is ‘huge psychological challenge’
The biggest challenge is “just convincing people to pay anything, even if it’s 99p”, Youatt. “That’s not how they see the medium. So that is a huge psychological challenge for them.”
He explained: “People are interested in podcasts because it’s a free medium, because there is a wealth of different publishers and content. It’s a low-stakes, low-commitment, low-entry level of commitment when you look at podcasting and of course you become a heavily invested audience member once you do subscribe.
“To convince that audience to part with cash is a bigger challenge than you would see, for example, on the newsstand. When people go to the newsstand, depending on their interest, depending on what we did on the front cover that month… they are still willing to part with cash,” Youatt said, because that’s why they “showed up” there.
“They’re not willing to part with cash when they go to a podcast. That’s not why they’re there. So you do have to overcome a bigger challenge in convincing your users that there is value in paying that money.
“Most publishers would start with a lower price point for a longer period of time to incubate an audience, even though on a cost per user level that might mean that actually you’re probably even compared to what you would see on a cost per user level compared to your ad-funded value – or even, in some instances, less than. But you have to do that for a small period just to show the value of the service and try and reach a wider group of users.”
Once the “strong editorial added value” has been demonstrated, the price point could then safely go up, Youatt added.
‘Worst thing’ publishers can do with paid podcasts
He also warned that the value proposition has to be clear: “The worst thing you can do as a publisher is start to make users feel penalised for just trying to engage with your content. If you do five episodes a week, I’ve seen examples of other publishers that go right, well we’ll go to four free episodes a week and one premium. Well then you’ve just taken an episode away from someone.
“That’s their daily listening habit. They now don’t have their Friday episode anymore and you’re holding it ransom for £1.99 a month. That’s not a great look and it’s also not a great service.
“One of the things that we all say internally is if you’re going to take yourself seriously, you have to offer more for more, not less for more. You have to think about what a premium experience really is. So for example, if you did have five episodes a week that were in an interview format, what is slightly more added value on top of that?”
He gave the example of six-part History Extra mini-series “The Tiger Tamer who went to sea” which he said was more narrative-driven with higher production values meaning it was “probably more akin to a radio programme in some ways than it is a podcast”. Subscribers could get it all at once, ad-free, while free listeners had to wait a week or even longer between episodes.
Youatt also noted that there has been a “much bigger uptake” for paid subscriptions among the US audience than in the UK, which may be an “early indicator that… hopefully, globally people will be more accepting of paid-for solutions.
“As things like Patreon and Youtube Premium become more and more popular globally, people are willing to support content creators and have that community feel. Podcasts will just be an actual part of how that subscription feels to a user, and it is a psychological, hurdle more than it is a financial hurdle.”
Asked his advice for other publishers considering introducing paid subscriptions, Youatt said: “I think you just need to set your expectations properly. I think realistically, unless you’re willing to change your business model and go from an ad-funded feed with a small amount of premium benefit and actually say, well, 50% of the feed is now premium only, if you don’t really dramatically go after it, it’s very hard to justify the extra expense…”
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