Podcasting’s subscription alchemy

Subscriptions; advertising; and the kings and queens of podcasting

You make a lot of assumptions therein that serve as the foundation of your thesis, but your assumptions defy a lot of what we know about media strategy, jobs-to-be-done, scarcity/abundance, and ads/subscriptions. You’re very focused on the supply-side rationalizations for these tradeoffs, but you’ve ignored the demand-side. I’d love to hear your thoughts on the following counterfactuals…

Your article essentially asks what the demand curve looks like for Howard Stern or Joe Rogan’s audience: How elastic or inelastic is demand therein? Is profit maximization found where prices are free or fee? You’re asserting that demand is not just inelastic, but highly inelastic, and thus profit maximization would be found for a meaningful fee levied on a sizable userbase. I disagree, and the following analysis provides the best counterfactual:

While a few non-commoditized, non-modularized creators should emerge from the audio/radio/podcasting medium, your assumption about the demand curve’s inelasticity has massively overestimated both the subscription TAMs for these dragon kings (like Joe Rogan and Howard Stern), and the total population of highly differentiated, unsubstitutable producers — for all the reasons described in the above link. Do not take that as me saying ‘there will be no profitable podcast subscriptions’. Rather, due to market features like low barriers-to-entry, high substitutability, and, consequently, abundant supply, I’m saying that podcasting’s category killers will enjoy far less in profit than your calculations, and its category killers will be far less in number than your estimations.

The subscription revenue model buzzword is very much in vogue right now, but it’s not a cure-all capable of business alchemy. From “The Three-Body Problem”:

[T]here is no panacea. There are categorically bad business models, but there is not a ubiquitously good one. That right there is “The Three-Body Problem”: A business model must juggle the needs of the business itself, its end-user demand, and its suppliers; but it’s fundamentally impossible for all three to coalesce in a copacetic utopia. (Some refer to this triumvirate as “product/market/business fit”.) In a world of finite resources, one party’s price is another party’s cost; incentives and misincentives; short term and long term consequences. These tradeoffs are inextricable.

Again, I’d love to discuss this with you here on Medium or over on Twitter. That said, good luck with Supercast. It sounds cool; just make sure you’ve right-sized your own TAM, which should definitely affect the product and its strategy.

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