‘Gives us more control’: To grow revenue, Schibsted built its own podcast platform

Using premium audio to drive subscriptions is a pretty underused tactic partly because it requires wonky tech workarounds, as Digiday has previously reported, especially as Apple, Google — and more recently Spotify — are globally the dominant podcast platforms. To take podcasts seriously, it’s becoming vital that publishers break away from platforms and build their own podcast models.

“I do believe other news media companies would follow,” said Schibsted product manager Erik Saastad. “It’s easy to see benefits. It has a lot of potential for strengthening the existing business models, but also to open for new revenue sources.”

Schibsted has had its fair share of knocks by coronavirus. From April to June, the group generated 498 million Norwegian krone ($53.5 million), according to its financial statement, that’s an 11% decrease year-on-year, due to the pandemic. Despite low ad revenue, for now, podcasts are playing a more central role in its content strategy. One of its most popular podcasts, Forklart (“Explained”), from subscription Norweigan general news brand, Aftenposten, is approaching 1 million streamed episodes every week.

Aftenposten has nearly 240,000 print and digital subscribers. Now, the title can publish certain podcast episodes behind the paywall for subscribers for a time frame before opening them up on third-party platforms like Acast and iTunes. Publishing podcasts on its own platform lets the publisher drill down into consumption habits, informing content, as well as how podcasts drive retention. Readers can also listen to podcasts while browsing news in the news apps.

For Schibsted specifically, podcast ad revenue has not been significant. The publisher expects podcast ad revenue to grow by 50% this year compared with 2019, (it wouldn’t say from what base) driven by its native publishing of the format and the maturation of the market, which is fledgling. Estimates from Interbuss Kantar say 45% of Norway’s population (which totals 5.4 million) listen to podcasts once a month. Podcast platform Acast counts more than 11 million monthly listens in Norway.

Schibsted estimates Norway generates £4 million ($5.1 million) annually from podcast ad revenue. In the U.S., ad revenue is nearing the $1 billion mark, according to the Interactive Advertising Bureau. In July, Acast increased advertising revenues with 800% in Norway compared to the same month last year.

And with the new platform, ad buyers can book podcast campaigns using Schibsted’s normal ad tools, in theory increasing the market. Before, sellers had to do this manually via Acast, which will still serve ads on Schibsted podcasts that are played on external platforms.

“All the platforms have the problem that they are based on a business model of free podcasts at scale, and it’s insanely hard to fit premium podcasts into that,” said media analyst Thomas Baekdal, who points to different models by Danish publisher Zetland and Dutch publisher The Correspondent. “Not just from a technical and UX perspective, but more so from a business perspective.” Spotify, for instance, is buying up podcasts to be featured exclusively on its platforms while also wanting creators to hand over podcasts for free. “We are being used in a very unfair way by these platforms,” he added.

Schibsted says it knows — from ongoing tests that it wouldn’t share results on — that publishing podcasts both in its own channels as well as on the external platforms increase the total listening.

For example, the publisher’s tabloid-style news brand VG, mostly funded by ads, but 24% of the population of Norway pay for access (according to Reuters Digital News Report 2020), has around 15 different podcasts and is planning to launch an additional five to 10 during the next few months. The most popular is true-crime podcast Krimpodden, which had 20,000 listeners on VG last week, making up about 25% of its overall listens (the rest came from other platforms like iTunes, Google and Spotify).

Partly, this increase is driven by Schibsted’s podcast player integration improving the user experience, making podcasts more visible and cross-promoting with similar and related content. More podcast ad inventory — and not having to cede control over to distribution platforms — means VG can, in theory, charge higher ad rates for spot ads and podcast sponsorship.

“This is both a necessity and a revenue opportunity,” said commercial business developer podcasts, Helene Svabø. “This is the smartest way to be forward-facing in the market. We have the data and easy access to the tool and for us to use ourselves. It’s an innovation that was necessary for opening up a larger chunk of the market and gives us more control.”

Update: An earlier version of this article incorrectly omitted that podcast listens outside of VG come from platforms including iTunes, Google and Spotify.