Two venture capital firms invested $5.5 million in PodTech.net, a small firm known on the West Coast for its technology-based podcasts; the move could outline a business model for other podcasters.
On the surface, it looks like an Old Media model being overlayed onto a New Media effort. By investing venture capital in PodTech, the Venrock Associates and US Venture Partner firms, and unnamed angel investors, have made a bet that podcasting is the new broadcasting.
PodTech’s best known offering, the Silicon Valley, Technology, and Media InfoTalk podcast, has drawn participation from notable personalities and big corporations like Intel and Yahoo. The eight-month old firm has essentially been the work of one person, founder John Furrier; the company has since grown to 11 staffers.
Both VC firms expressed the notion that podcasting in general offers opportunities that radio and TV cannot match. Most notable would be the specific focus of most podcasts, of interest to particular niches of listeners that would hold demographic appeal to given advertisers.
Advertising represents the revenue source PodTech will embrace to deliver a return on the VC investment. The Silicon Valley venture capital-tracking blog SiliconBeat reported on the changes coming to PodTech along with the capital infusion, in discussing Furrier’s plans for the money:
1) He will be hiring a full podcasting news team, a sort of National Public Radio for podcasting.
2) He’ll build out what he calls Infotalk. This is where other people produce podcasts in partnership with Podtech, and there will be some sort of split of the revenue generated from advertising running alongside or within the podcasts.
3) He’ll build out a sponsorship network. These will be businesses like Intel (you will see Intel’s feature channel on Podtech’s homepage) which will pay Podtech to produce and host podcasts.
SiliconBeat also noted comments from one of the venture capitalists that advertising, hosting, and distributing podcasts will be the revenue generators; “corporate marketing” received special emphasis.
It sounds a lot like what broadcast media does today. Listening to a podcast requires an extra couple of steps first: subscribing to a podcast and moving the latest episode to a portable media player. Once the subscription is in place, software does the work of grabbing the latest episode. But it isn’t the same as getting into the car and flipping on the radio.
A few podcasters have enough appeal themselves to charge for access to their podcasts. Comedian Ricky Gervais had a popular podcast available for free on iTunes. That has since moved to Audible.com and now charges a fee.
Significant radio presences like Rush Limbaugh, ESPN Radio, and the Bob and Tom Show likewise charge for access to podcasts of their shows. They have built audiences over time and have been able to convert many of their listeners to subscribers.
Time presents the greatest challenge to Furrier and PodTech with this investment. One might think broadening appeal would be greater, but marketing can accomplish a lot. The niche audiences for technology, for example, may set aside time to listen to a specific podcast. But will enough subscribers do so and allow PodTech to attract advertising clients?
For niche advertisers, that may be the case now. Two venture capital firms think it is, and so does Furrier.
Are you now or have you considered podcasting? Do you think it has a broader future? Tell us more at SyndicationPro.
—
| document.write(“Email Murdok here.”)
Drag this 
Add to document.write(“Del.icio.us”) | DiggThis | Yahoo! My Web
David Utter is a staff writer for Murdok covering technology and business.
