Although nobody has a crystal ball to know what the future will bring, German media organisation Axel Springer decided to invest in audio to boost its long-term sustainability plans. Best known for publishing the Bild and Die Welt, major German newspapers and news websites, the organisation now plans to become the top audio publisher in German-speaking countries by 2025.
To do this, it created a brand new audio unit that will work on product development, media impact and business opportunities.
The current state of play
Axel Springer sees the German-speaking podcast market as an important opportunity. Germans are already accustomed to audiobooks but podcasts are still in their infancy.
The podcasting market is experiencing a quick growth though, with one in four people in Germany now listening to podcasts, which is twice as many as in 2018. More than 10 million people do that every week and they are called active (regular) podcast listeners.
Max Franke, managing director of Axel Springer Audio said at the New World Encounters event last week that much of this engagement comes down to convenience.
"Listening is more convenient than reading. Readers simply choose text when they can, audio works everywhere. Audio is an exciting opportunity to increase new listeners," he says.
Axel Springer is not a newcomer to audio, however. Their audience has started to see text-to-speech versions of stories, and many also tune into its portfolio of radio and web streaming platforms. That brings in about 20m daily listeners and 50m online sessions. An investment in audio producer Wake Word will also give the unit the means to produce high-quality content.
"We formed this new unit where we consider ourselves to be a speedboat: we want to be a catalyst for audio and audio lobbyists within the company," he continues.
Clearly, Axel Springer is lining up audio at the centre of its future-proofing strategy. But it does not come without challenges, most notably monetisation. Podcasts are notoriously hard to monetise and represent a fraction of what can be earned in radio and print.
Franke also says that there is an important threshold of 10,000 plays per episode to become relevant from an advertising point of view.
But the barriers to entry are low, and Franke is buoyed by the success of The New York Times' hit show The Daily and its recent acquisitions to create an app as the dedicated home for its audio journalism. Danish publisher Zetland has also enjoyed plenty of success by crafting audio versions of its stories. Big tech is also investing heavily in the medium, with Facebook launching its Clubhouse rival and Spotify continuing to invest in podcasts.
All of this is great for the here and now but what it means long-term is pinning down an evasive demographic. The young crowd likes podcasts - the 2021: the State of Podcasting in Germany report estimates that 14- and 29-year-olds make up 40 per cent of total active listeners. Another big chunk of this market fits with Axel Springer's existing target audience: 50 per cent are aged between 30 and 59.
This helps to prepare for the future, Franke adds, noting that these habits will help its audience to use voice devices, which have a historical problem with content discovery.
Axel Springer has a four-step plan to get the audio ball moving.
First, it wants to increase audience time on audio and it has popular legacy platforms that will help. Bild alone attracts 400m visits a month to the website and it will start to market out compelling offers to try out audio.
Monetisation is the next issue to solve in this fragmented market. The audio unit will prioritise opportunities within audio-based branded content and native marketing across its platforms.
All of this is meaningless without good content that people want to listen to. Franke says Axel Springer will work with a startup mindset: constant test and learn, developing distribution channels and third-party platforms, and watching analytics closely to make data-driven decisions on the content production side.
Finally, on those distribution channels, watch the market closely and act quickly on emerging trends. New products and formats will come to light in the future, and that could change the revenue model starkly.
"Audio in Germany is small but we must not fall into the trap of 'show me the money'," he says.
"We see consumption patterns changing so we now need to build our muscle, capabilities and footprint. This is a challenging market but for a variety of reasons, it's attractive and we expect audio to be bigger and more relevant in 2025 - and we want to be in a strong position when that happens."
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