Podcasts Calling

Salim Ismail, CEO of a New York technology consultancy, has been tuning in to geeky podcasts like "Gillmor Gang" and "IT Conversations" for the past six months. He only wished he could listen to them more often: when riding on the subway, for instance.

Having considered buying an Apple iPod music player, he opted instead to use a Samsung i700 wireless phone, and it's been smooth sailing since.

Indeed, a shift is afoot in the usage of podcasts, which are home-brewed audio or video broadcasts of everything from rap to religious services. Long tied to PCs or iPods (hence the name), podcasting fans are moving on to mobile phones, which increasingly boast more computer-like features.

Plus, new software recently available from outfits such as Pod2Mobile and UpSnap allows users of basic phone models to download and listen to podcasts wirelessly, cutting the PC and portable music player out of the equation.


  With UpSnap, which launched 100 free mobile podcasts on Mar. 27, you can simply dial a number to listen to your program from your phone. In a few weeks, the service will also allow users to get podcasts to their phones wirelessly by sending UpSnap a text message. Rival Pod2Mob allows for the text message feature and has built a user base in excess of 100,000 since its launch last summer.

Those thousands of mobile podcasting fans could turn into millions this year. Within six months, more people will listen to podcasts via wireless phones than via iPods, believes Mike Chapman, an analyst with consultancy eMarketer.

More that 50 million Americans will listen to or watch podcasts by 2010, up from 10 million this year, the firm says. Ever-smarter wireless phones "will become a driving force [in podcasting]," Chapman says. "In the second half of 2006, people listening to podcasts, or watching video podcasts, on cell phones will become commonplace."


  What could spark such a sudden upswell of wireless podcast fans? An Apple (AAPL) wireless phone with some iPod-like features, for one thing.

The Cupertino (Calif.) computer maker sold more than 25 million iPods last year and has long been rumored to be developing a wireless phone packed with multimedia capabilities. If that happens, thousands of iPod owners will adopt the phone in droves and probably sample podcasts they know and love wirelessly, Chapman says.

Software companies are already playing around with new usage models aimed at playing to the mobile phone's strengths. Melodeo, a Seattle software startup, streams 45 podcasts produced by National Public Radio to wireless phones in the U.S. and Canada.

Its Mobilcast software works with selected phones running on Cingular Wireless -- the wireless joint venture between BellSouth (BLS) and AT&T (T) – Deutsche Telekom's (DT) T-Mobile, and Canada's Rogers Wireless (RG).

Like a particular podcast? Share it with your friends by sending them a text message, or send the sound file directly to their phone via Bluetooth.


  Podcasters themselves are trying out new, mobile formats. Russell Holliman, of Houston, uses his Palm (PALM) Treo 650 to record and remix podcasts. And mobile podcasts are expected to become different from their PC- and iPod-based cousins by becoming shorter.

Perhaps a longer broadcast would be sliced into 30-second "chapters," so that if users are interrupted by a call, they don't have to listen to the program from the beginning again. "The mobile phone is a new publishing medium that's every bit as different from the Web as the Web is from print," says Bill Valenti, executive vice-president at Melodeo and former CEO of Tegic, a developer of software for mobile phones that was acquired by Time Warner's (TWX) AOL.

That said, just like traditional media, mobile podcasts will likely rely more heavily on advertising than subscriptions to make ends meet. "I am hearing there's quite a demand [from advertisers]," says Tony Philipp, CEO of UpSnap, which just began inserting ads into mobile podcasts. "Newspapers, the Internet -- all of them began booming because of advertising."


  While it's still in its infancy, mobile podcast advertising and sponsorship is revving up quickly and could, eventually, surpass the traditional podcast ad market in size (see BW Online, 11/14/05, "Searching For The iPod Of Gold").

Consider: There are tens of millions of iPods and about 700 million PCs already capable of playing podcasts. These are small numbers compared with the 2 billion mobile phones now in use around the world. "The cell phone will become the next podcast-listening device," says Barbara Rechterman, executive vice-president at Web domain-name seller GoDaddy.com, which is looking to try mobile podcast advertising.


  A few advertisers who've already jumped into the fray say mobile podcast advertising works. Consider CD Baby, an online retailer of independent music.

For the past two months, people tuning in to certain popular podcasts via cell phones have been hearing 15-second CD Baby audio ads. The $1,000-a-month ad campaign, eating up half of CD Baby's ad budget, has been well worth it, says owner Derek Sivers.

"I don't believe in boring little ad banners," he explains. "[These campaign results] are right in line with traditional advertising. And I just like the idea of targeting people who are online already and interested in listening to MP3 files. That's our target market."


  In many ways, advertising on mobile podcasts makes more sense than plain podcast ads. As with a video iPod, a cell phone ad can feature audio, graphics, or video. But with a phone, a user can immediately respond by calling a marketer's call center or by wirelessly surfing the advertiser's Web site.

"You can expect the response rate to be better [than with iPod advertising]," Chapman says. He expects mobile podcast advertising to grab a sizeable chunk of the ad-pod market, projected to rise from $80 million this year to $300 million in 2010, according to eMarketer. To answer surging demand, several software makers have just launched special ad platforms designed to help marketers target specifically mobile podcast listeners. On Mar. 27, Pod2Mobile launched software allowing advertisers automatically to insert 10-second to 15-second ads into hundreds of podcasts, including that of the popular tech blog Engadget.


  Marketers can choose categories of podcasts, like entertainment or sports, to feature their ads in. They also can handpick specific programs for their ads to go on.

The software provides advertisers statistics on click-through rates for graphic ads or text messages, for example, and other ad performance indicators. The cost: $300 buys an advertiser 3,000 downloads (much more expensive than traditional online banner ads). And for $600, an advertiser can become the exclusive sponsor of a particular podcast for 30 days, says Pod2Mobile co-founder Brad Zutaut. As the business picks up, Pod2Mobile plans to share its ad revenues with podcasters that sign up to be in its directory.

Other companies are turning to mobile podcasts to extend the reach of their regular podcast ads. Podcasts that Melodeo powers will feature the same ads that NPR program creators had already inserted into NPR programs, thus giving advertisers access to a broader audience.


  Chances are, mobile podcasts might have to deal with some consumer backlash against advertising. "Some people will not be tolerant about this," says Harry Wang, an analyst with consultancy Parks Associates. But most mobile podcast advertisers say they haven't heard any complaints from users so far.

That could change as mobile podcasting picks up steam. But for now, advertisers can be pardoned for viewing this new medium through rose-colored glasses.

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