An interesting assessment of the podcast ecosystem and market from Li Jin at VC firm Andreessen Horowitz (“a16z”).
A thread in the analysis focuses on the significant and growing consumption of podcasts in the U.S., coupled with a lag in monetization from ad revenue and other sources. As investors, a16z is looking for:
- Focus on audio content broadly, rather than exclusively podcasts.
- The potential for network effects.
- While we prefer full-stack startups that own the experience end to end (positive feedback loops from listening app to content to monetization), we wouldn’t rule out breakout apps that are strong on any one aspect.
- High-quality differentiated and deeper content vs. broad, free libraries of shallower content.
- Consumption experience that enhances the experience of the audio content.
- Alternative monetization beyond solely ads
“If you think of audio as the way you think of, say, film, like we’re still in the black-and-white period of podcasting. What’s color going to look like? What’s 3-D going to look like?”