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Podcasting goes commercial with iTunes update
Ads and paid-for podcasts on the way, says Gartner

By Steve Ranger

Published: Monday 04 July 2005

Updates to Apple's iTunes software will take podcasting into the commercial mainstream - and make it easier for content providers to make money from the craze.

Late last month Apple unveiled iTunes 4.9, which allows users to subscribe, manage and listen to podcasts.

According to analyst Gartner, this will pave the way for content providers to start making money from what has so far been a grassroots development. This may come through ads in podcasts or new methods of charging to downloading them.

The analyst said there are three elements to podcasting - creation, distribution and playback - and Apple has covered the last two elements "fairly well".

Gartner analysts Allen Weiner and Michael McGuire wrote in a research note: "Apple's efforts to create revenue from podcasting follow the same strategy it has applied to online music: extend the value of the iPod (the real revenue generator) by creating a content distribution site that meets the consumer's growing appetite for audio content."

Advertising opportunities for podcasts are possible in the form of sponsored podcasts and inserted audio advertisements, Gartner said, adding that to enable this Apple could create a publishing tool that would allow content creators to integrate advertisements.

Gartner said that, for content providers, now is the time to get aggressive in offering podcasts.

"Don't let return on investment be an immediate concern. The technology that will allow consumers to pay for podcasts, as well as advertising insertion tools, will soon be available," it said.

The research note added that web portal operators should develop closer relationships with device manufacturers to allow easier separation and management of podcasts between users' PCs and their portable music players.