It is no secret that Newark Venture Partners is heavily focused on Audio as a great investment opportunity. It doesn’t hurt that NVP is founded by the audio leader, Audible, who paved the way for the growing industry. It has been over twenty years since Audible released the first portable audio player designed for audiobook listening.
The advent of the bluetooth headset along with a plethora of emerging platforms including connecting cars, gaming devices, workout equipment and smart speakers has opened a huge market for seamless integration of audio in our lives. We can all agree that audio access makes our lives better. We can multitask in ways never before thought possible. Now, we can learn something new, stay up to date on news, be entertained, relax or escape all through audio - and we can do several of these at the same time! For businesses and consumers alike, audio access is feeling more like a need to have than a nice to have with every passing month. They all want and need to be a part of the conversation. Andresseen Horowitz said aptly “Earshare is the new mindshare.” We agree, and there’s a lot at risk for businesses who hesitate to get involved.
With this newfound market comes great investment opportunities. We see this in the major increase in early-stage venture deals in the audio space. If you look just at Podcast investments alone, there has been a major increase in early-stage venture activity.
No doubt, this has been fueled by the large exits and acquisitions that have taken place in the spoken word arena over the past few years. There are numerous layers to the value chain that make Spoken Word a functioning industry. And Newark Venture Partners feels that there are technology innovation and investment opportunities to be held at each layer.
The roster of speakers at the event included operating representatives from each area of this value chain. They shared the technology solutions that they find to be particularly valuable -- as well as technology challenges and potential tech solutions that they see a real need for in the future. Here are some key takeaways:
Darrin Bedol - Strategic Initiatives at Audible
There is no denying it that the audio market is growing at rapid speed:
Darrin discussed one of Audible’s core principles, Be Customer Obsessed, which is a relentless focus on the customer: Customers want great content that is easy to access and available at the right time.
Great content is the best way for Audible to deliver a great customer experience. There are three trends identified by Audible’s customers which are a guiding light for Audible’s content team.
Trend #1: A Focus on Diverse Perspectives: It is important to cover the full spectrum of the human voices and experience and particularly amplifying voices of creators of color of the LGBTQ community and reflect customers in the content we serve them. Examples include "The Autobiography of MalcolmX" perfromed by Laurence Fishburne and "More than a Vote: Our Voices. Our Vote" featuring LeBron James, Octavia Spencer and Leon Bridges.
Trend #2: Niche Focus: There is demand from the market for less broad content that speaks to the masses and a request for more focused content on specific themes. An example of this being successful is Blumhouse and what they did by focusing on low budget horror movies but being the best at it. Audible has been working with creators such as Sonoro which focus on spanish-language content and Meet Cute which focuses on romance. We feel this will unlock niche listeners who are passionate about a certain kinds of content. Audible has focused a great deal on sleep and wellness content with a collaboration with Thrive and Diddy for meditation and The Pursuit of Healthiness with Blake Griffin. Another niche Audible has focused on is Words + Music as spoken word audio is uniquely positioned to tell stories from musicians by combining listening with reflection (check out Alanis Morissette and St. Vincent).
Trend #3: New Spin on Familiar Voices: For anyone in media, big content is familiar, but we’re excited about taking familiar content and putting new spins on it. A just released Audible Original Sesame Street podcast introduced a new Sesame Street character, showing that listeners love getting to know familiar content in new ways.
How and When We Listen: Connectedness & New Listening Occasions:
There was a 95% increase in YoY in wearable devices, most of that driven by “hearabels,” meanwhile 52% of 18-34 year olds report using smart speakers more for music and entertainment since start of the pandemic. Together, these two stats prove that people are finding “new” ways to listen to audio and are listening everywhere.
With the ability unlocked by new devices, 79% of people who listen now listen more because they can multitask. This is unlike other entertainment formats where your eyes and hands are free. Interestingly, since the pandemic, the peak listening time has shifted from commuting hours to 11am. This is a trend that Audible is tracking. Will it return back once life goes back to normal, or will audio as background continue to be a mid-morning treat?
Audible is keenly aware that they need to create the kind of content that is appropriate for different listening times during the day. Audiobooks may work for one part of the day, but multitasking, or a 20 minute walk may require something else.
Audible will continue to adjust to these trends over time. One way that Audible has already begun to adjust is a new product offering called Audible Plus. Audible Plus offers unlimited access to Podcasts, Audiobooks, Originals and more, and it’s one adjustment Audible has made to meet the three trends (content, devices and new occasions). It offers new content types, new content formats and really fits into the customer's day whenever they want to listen.
Scott Simonelli - Founder, CEO of Veritonic
As Darrin explained, the world of audio is massive and rapidly growing. Veritonic examines how advertisers can capitalize on that by extracting and analyzing data in the audio market.
The data available today for marketers, advertisers and investors in the audio market is fragmented. Better data across the audio landscape makes it easier for people to make decisions and ultimately quantify what is and what is not working across their audio portfolio. Data is also creating more diversity in audio, showing the value of using and hearing diverse voices.
Veritonic brings currency to emotional attributes and audio specific metrics such as recall and time. They measure things like purchase intent and engagement, which allow them to surface conclusions across the lifecycle of an audio ad.
They can now answer questions like:
Data can increase the value of an audio investment, and it can validate the conversation around diversity. Right now, data tells the story that the voices in audio ads are not diverse enough. For example, 92% of the voice talent for COVID ads is white voices, when the people affected by COVID skew heavily to Black and Latinx communities. By creating better awareness, and proving the efficacy of voice content that reflects its audience, we will change the behaviors and strategies of marketers. And while we shouldn’t need to validate diversity is better performing, the reality is that it is.
Veritonic ingests a lot of audio content and understands it. Sonic processing is involved here, and we use machine learning and AI to help understand what is happening with the audio content itself, as well as how someone responds to it, validating what is working and why.
Michael “Manny Faces” Conforti - Founder/CEO of Manny Faces Media
Michael “Manny Faces” Conforti spoke about the technology needs, challenges and opportunities for podcast creators. He is a Newark-based, award-winning podcast producer, entrepreneur, and founding director of nonprofit The Center for Hip-Hop Advocacy. As a podcast professional, Manny produces acclaimed shows including the award-winning social justice podcast, News Beat (www.usnewsbeat.com), as well as multimedia interview show, Hip-Hop Can Save America! (www.hiphopcansaveamerica.com) . He is the founder of Manny Faces Media, a podcast production and consultant firm.
Manny Faces pointed out a variety of operational challenges as well as tech solutions for creators:
Discoverability: If you’re not on the “new and noteworthy’ or Apple or similar ranking in Spotify, it’s very tough to get picked up.
Accessibility: How people with disabilities can get access to podcast content. As a Podcast creator, Manny Faces tries to be aware of this need and use technology to solve it
Monetization - Access to advertisers: The big elephant in the room -- for a small/independent creator, you don’t necessarily have the reach yet to attract the Midrolls. There are some alternatives:
Monetization - Dynamic Ad Insertion: Dynamic Ad insertion is great for continuing to monetize old podcasts, but it’s not always available for independent creators.
General creator operations:
Other growth areas to consider for creators and investors:
Carl Scott - Head of Content at Players’ Tribune
Carl has been in audio since the beginning of podcasting. Started with StoryCore, an independent show for NPR -- and has since joined the Players’ Tribune. He is focused on helping those who want to have a strong presence in the audio world and has seen the investment in the space grow.
Players’ Tribune has been around for 6 years. Derek Jeeter started it to create a place where athletes could have some control over their own narrative. It was started with the idea that players get to tell their story in their own words.
Essentially, they barter authenticity for audience. Celebrity used to be magic because you couldn't know the world of where the celebrity came from. That’s changed in the digital age. The extent to which a celebrity can be authentic is what creates attachment --- and that attachment can be monetized. Kobe was an early investor and insisted that if you make the content for him, his fans would follow
There is technology that helps them do what they do:
Audio tomorrow, there are two enormous growth opportunities:
The future of audio is a place where users, podcasters, and investors can create authentic content without barriers.
Overall, we found that all of our speakers touched on a few major themes including the need for increased diversity among podcasters and better accessibility for listeners, improved data for monetization purposes and the need for more innovation in discoverability for creators. The event also included short pitches from NVP portfolio companies SpeechKit, ABF Creative and Sounder.fm who are innovating within many of these themes. If you’re interested in hearing these pitches, or the speakers in full, please contact Jennifer@Newark.VC