How the creator allegations against Kast Media expose an outdated podcast metric

Podcast creator deals are due for a major wake up call. Podcast advertising is a cornerstone of the industry, as it largely funds minimum guarantees for creators. Minimum guarantees are a set amount of money that creators earn, regardless of their show’s performance. While this may work in principle, changing economic realities – like rising interest rates for advertisers – can affect a network's ability to make payments. Recently, creators have accused Kast Media of owing them advertising revenue. Most notably, YouTuber and podcaster Ayydubs sued Kast Media for $550,000 in minimum guarantees and posted a video (earning over 1.7m views) calling out Kast’s CEO, Colin Thomson, alleging that he owes creators $4 million in backpay. 

So, how are companies overpromising and under-delivering? Minimum guarantees are partly based on the current and estimated growth of a podcaster’s audience. The size of a podcasters audience is, in turn, mainly determined by downloads. However, the podcast download is an incomplete metric that can be misrepresented to networks, and draw a false picture for advertisers. Thus, networks must look beyond the download and redefine how podcast performance is measured to unlock its true advertising potential.

Downloads are arbitrary 

Since the podcast’s inception, the download has been one of, if not the most important metric to determine a creator’s audience size. Moreover, advertisers and networks depend on a creator’s downloads to help decide whether they should sign a show or make an advertising deal. In an interview with Bloomberg, Libsyn’s VP of podcast relations, Rob Walch, hinted that creators can deliberately alter the appearance of their downloads to appear more desirable for a network. For instance, creators can edit screenshots of data to inflate their audience size or even pay companies for downloads. This fraudulent data can lead to networks to overspend on deals that turn out far less profitable than expected. 

Moreover, not all podcast downloads are created equal. There are various types of downloads, such as the manual download, where a listener deliberately downloads the episode, or the automatic download, where the podcast player will automatically download new episodes from followed creators in the background. However, these metrics miss out on a crucial fact. Just because a user downloads an episode, does not mean they actually listen to it. Moreover, the term “download” is not necessarily standardised, as some companies use ‘downloads’ and ‘listens’ interchangeably. Additionally, podcast data is siloed across platforms, making it difficult for creators to capture a complete picture of their audience. Thus, podcast downloads are inconclusive and inconsistent, showing more intent to listen rather than actual listens. 

Focus on engagement 

In order for podcast advertising to be more effective, companies and networks must look beyond the podcast download. As consumption fragments across a variety of platforms, there are more ways to determine a podcaster’s audience:

1. Utilising social media: As the podcast market grows, a creator’s social media profile and podcast video views are becoming crucial measurements for audience engagement. For example, a creator may earn hundreds of thousands of views on their video podcast and host an active comment section, but earn a smaller amount listens to their audio podcast. While followers on TikTok or Instagram are not a conclusive metric on who is actually listening to or watching a podcast, they are a more conducive space for audience development and engagement than a streaming platform. These platforms enable creators to make a community that, as their content grows, they can continually engage and take with them on their journey. 

1. Looking beyond ads: Creators are diversifying their revenue through subscriptions and merchandise. While these metrics are usually attributed to having a large audience base, creators can still monetise a smaller, but loyal, audience. For instance, a podcaster could have only 1000 listeners per month, but those listeners are buying merchandise; exemplifying the power of niche audiences. As creators grow, they can host physical, ticked events, like podcast tours, to bring their fans together, creating a space for sponsorships and advertisers.  

Looking ahead, the reliance on advertising is already changing. For instance, Amazon Prime offers ad-free podcast listening as part of its prime membership for $9.99 per month. This creates a whole new podcast experience and asks whether podcasts platforms, on a major level, will evolve to resemble other forms of digital entertainment, with a variety of ad-free subscriptions and ad-supported free streaming. While podcast advertising has opportunities to expand into this new environment, the industry should take the same approach as the rest of entertainment, valuing quality (loyal audiences) over quantity (high number of downloads).