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Lessons from Knight Investments in Digital Audio and Podcasting

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Lessons from Knight Investments in Digital Audio and Podcasting FROM AIRWAVES TO EARBUDS LESSONS FROM KNIGHT INVESTMENTS IN DIGITAL AUDIO AND PODCASTING Draft for Public Release – November 2016 Prepared by: SARAH LUTMAN JESSICA CLARK ANGELICA DAS Principal, Lutman & Associates Principal, Dot Connector Studio Senior Associate, Dot Connector Studio knightfoundation.org | @knightfdn | 1 / 40 TABLE OF CONTENTS 3 Introduction 6 Knight Foundation's Investments 9 The Changing Context 23 Knight Investments: Key Lessons 27 Conclusion 28 Appendices knightfoundation.org | @knightfdn | 2 / 40 INTRODUCTION knightfoundation.org | @knightfdn | 3 / 40 INTRODUCTION Podcasting and other forms of on-demand digital audio are growing. Edison Research reports that, based on a survey conducted in January and February 2016, an estimated 155 million Americans over 12 had listened to some form of online radio in the preceding month, and 57 million had listened to a podcast. The runaway success of the podcast “Serial,” Enterprise Fund investment in Gimlet Media, a While this report’s primary basis is a particular which originated within the public radio show private podcasting company started by public set of grants, the inquiry into grantee “This American Life,” helped spark interest in the radio veterans. experiences quickly blossomed into larger medium, which is reaching new audiences, giving conversations about podcasting and digital rise to new voices and creating new revenue The approach to this review was to “learn audio writ large, and in particular the ways that streams. alongside” grantees by reviewing progress of the journalism and public information producers are grants and investments to date, giving grantees more and less equipped to interact successfully Seeking to accelerate positive change, Knight the opportunity to provide insights into their with the new digital listening audience. Foundation made several recent investments to work, and to do this in conjunction with an in- support the advancement of journalism and depth look at the broader podcasting context. Indeed, the ground is shifting rapidly. New public information programming delivered entrants with large wallets and access to talent, through podcasting and on-demand audio The report does not cover some of Knight’s more rapid evolution in technical infrastructure and formats. This report summarizes initial findings recent podcast-related investments, including capability, explosive increases in audience from the experiences of several recent Knight Pop Up Archive¹ to create open-source software uptake, sharply rising revenue and quickly grantees working in this rapidly emerging field: for organizing and publishing archival audio broadening public awareness are all driving Project Carbon, which comprises grants to NPR content from small and independent producers; change in the on-demand audio world. Grantees and several local public radio stations to build RadioPublic, a for-profit public benefit are forced to take notice and to take action. Not out the digital infrastructure of public radio; corporation established in partnership with PRX; all are ready. Radiotopia, a new podcasting network developed and a grant to “This American Life’s” Satchel, a by Knight partner PRX Inc.; WNYC Discover, a tool to facilitate social sharing of podcast audio ¹ Knight Foundation’s funding to Pop Up Archive has included mobile podcasting application; and a Knight snippets. both grants and venture capital. knightfoundation.org | @knightfdn | 4 / 40 INTRODUCTION KEY FINDINGS • Several Knight Foundation partners are Podcasting and on-demand audio today is a either reinvigorating old pathways to fertile field into which many seeds are being The review surfaced several key insights about revenue or illuminating new ones. NPR One planted, and with more or less intentionality. the early-stage impacts of Knight Foundation’s is feeding user registration to local stations, As this report shows, however, these new investments, as well as strategic issues to helping potential public media members to opportunities face significant headwinds and consider around efforts to support quality news replenish an aging audience. In addition to will demand continued creativity, drive and and information programming in a digital era. ad sales, Radiotopia has raised significant investment to reach their full potential. The most significant themes: funds through crowdfunding, events and sponsorships. Gimlet’s for-profit model has METHODOLOGY • Knight Foundation’s grantees and attracted enough interest to meet investment Enterprise Fund investments have shown targets, and ad inventories continue to sell out Knight Foundation worked with Lutman & success in growing new audiences, for major shows. Associates and Dot Connector Studio to perform particularly among younger cohorts that this review. Data were collected in spring and might not turn to radio. Digital entrants • The public radio system, while having summer 2016 through more than 60 face-to- Gimlet and Radiotopia are experiencing made progress, is not yet well positioned face and phone interviews with grantees, public significant year-over-year audience growth. for audience-first, digital delivery. radio leaders, producers, industry experts, Listeners across digital media also skew to Project Carbon, WNYC’s Discover app, and and other stakeholders (see Appendix A for the low 30s—far younger than the average RadioPublic represent significant strides in interviewee list); a review of internal grants age of an audience member for the public transitioning the public media system to a memoranda, grantee reports and updates, radio broadcast system. These efforts are digital-first orientation. and staff correspondence; and an extensive also giving rise to new voices. Gimlet and literature review of the field, including white Radiotopia are developing new shows, both papers, industry reports, and books related NPR One and WNYC’s Discover app are to journalism, technological innovation and seen as greenfields to experiment with new adoption, audio production, public broadcasting content in a way freed from the constraints of policy and more. public radio broadcasting, and RadioPublic is developing discovery methods to increase the appeal of podcast listening for new audiences who aren’t familiar with the format. knightfoundation.org | @knightfdn | 5 / 40 KNIGHT FOUNDATION’S INVESTMENTS knightfoundation.org | @knightfdn | 6 / 40 KNIGHT FOUNDATION’S INVESTMENTS Knight Foundation has invested in and worked with several major efforts to support journalism and public interest programming delivered via podcasting and to advance the digital transformation of audio content. PROJECT CARBON Knight Foundation made multiple investments Several member stations are participating. One sharing user data among departments such as totaling $4.4 million in Project Carbon, an collaboration is a joint project by KPCC (Los membership, events, underwriting and content. initiative led by National Public Radio. The grant Angeles), WHYY (Philadelphia) and NYPR (New Minnesota Public Radio (MPR) has led an effort for Project Carbon was intended to support York City) to develop Loud.ly, a project designed called Public Radio Engaged, a collaboration with the development of a seamless digital listening to build new capabilities for audio streaming and other public radio stations and NPR’s Carbon platform across all NPR affiliates and available delivery, with emphasis on strengthening content Services Identity Platform intended to establish through all digital devices. management systems, mobile infrastructure and the protocols and tools needed to connect local digital revenue interfaces that together facilitate user data with system-level data related to Project Carbon represents an effort to map a station’s connection to digital platforms. KQED audience consumption and preferences. the public radio system’s transformation from (San Francisco) is working to migrate its digital broadcast-first to digital-first, encompassing audio assets, particularly newsroom assets, to multiple elements of new and necessary shared the Dalet content management system, enabling digital infrastructure for the public radio system. nimble sharing and delivery of locally produced The bulk of the effort by NPR has been directed to audio content via the NPR One app and other the NPR One app, which provides some elements digital platforms. (Dalet is a commercial software of this infrastructure, while key member stations vendor whose product is used by some of public pursued other component parts. radio’s largest producers.) WBUR (Boston) is implementing NPR’s application programming interface and is improving its capacity for knightfoundation.org | @knightfdn | 7 / 40 KNIGHT FOUNDATION’S INVESTMENTS 2 Shan Wang, “Out of Many, NPR One: The App that Wants to RADIOTOPIA GIMLET MEDIA Be the ‘Netflix of Listening’ Gets More Local,” Nieman Lab, January 11, 2016. Radiotopia is a curated network of podcasts Knight Foundation has made two equity formed to help independent media makers investments in Gimlet Media through the Knight develop audiences and revenue for their work. Enterprise Fund, the first in 2014, followed by a Formed within PRX Inc., Radiotopia was granted reinvestment in 2015. These investments have $1 million from Knight Foundation in November advanced Gimlet’s ability to develop and release 2015. Radiotopia’s lead producers are Roman additional podcasts for its network. Mars, originator of the popular podcast ”99% Invisible,” and Julie Shapiro, executive producer. Gimlet
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