While podcasting has been around for nearly two decades in the United States, in which more than 41% of Americans ages 12 or older have listened to a podcast every month in 2021, it is still a fledgling industry in China. For the most part, Chinese audiences have been more acquainted with the likes of state-owned public radio and government-controlled broadcasting than on-demand audio content from private creators.
In recent years, however, the online audio sector, or the aptly nicknamed “ear economy,” has seen rapid development. With the rise of commuter culture and free access to diverse media content, podcast listening has become a routine in many young Chinese consumers’ lives. By the end of 2021, Chinese podcast listeners are expected to reach up to 85.6 million, ranking second only behind the US. Still, given China’s sheer size, this only accounts for 6.1% of the nation’s population, suggesting that there is significant room for the market to grow.
However, akin to other media types, podcasting is not an oasis of free expression in China. On the contrary, subversive content or controversial subjects still runs afoul of the state’s rigorous censorship regime. Moreover, regulators are doing more than censorship; in fact, they also actively participate in the market by producing state-sponsored content. As a result, there is a booming ear economy ecosystem in which private creators, tech giants and businesses, and regulators alike are vying for Chinese listeners.
Liberalization of the Ear Economy
The turbulence of the mid-1900’s induced rapid changes to the nation’s economy; moreover, the period impacted many facets of modern life in China. During the takeover of the Chinese Communist Party in the 1950’s, the government seized control of private commercial radio stations, firmly believing that media control was key for social stability. Hence, radio listeners could only access state-owned stations on state-mandated devices. To this day, Chinese radio is still state-owned.
A few decades later, the reform and opening up period of the 1980’s also brought a wave of individualism that spread the the idea that people were free to follow their interests and passions. This carried over into the ear economy as interests started shifting from centralized and collective listening to individualized and customized audio content. State-owned radio in turn shifted from a state-funded institution to a state-owned media asset within a commercial institution – by focusing on listeners’ individualized interests, radio became big business.
In addition to a more individualistic mentality brought on by economic reform, three new phenomenon in the 2000’s solidified the demand for individualized auditory content. First, China is a rapidly urbanizing society, and since 2011, over 50% of the population has resided in an urban area. Second, private auto ownership has become commonplace, and in 2019, it was reported that there are about 43 cars per 100 urban households. With more people living in cities and commuting to work, radio listening has become commonplace, which has sparked demand for more diverse auditory content. Last is the rise and popularization of smartphones. With 63.8% market penetration and over 900 million smartphone users, China boasts the largest smartphone market in the world, which has most prominently sowed the seeds for China’s podcast industry.
The Demographics of Chinese Podcast Listeners
A burgeoning demand for customized, privatized, and personalized media tastes from economic liberalization and urbanizing society has formed the foundation of China’s booming podcast market. The flourishing industry covers topics across the gamut, from travel to hobbies – and everything in between. In terms of audience, the array of content has been particularly attractive to residents in tier-1 cities who are relatively younger and more highly educated.
Chinese Podcast Listener Demographics, Age & Gender
According to the 2020 Chinese Podcasting Listeners and Consumption Survey by PodFest China, over 68.2% of respondents reside in top-tier or coastal cities such as Beijing, Shanghai, and Guangzhou. Podcast listeners tend to be quite young, with more than 88.5% of listeners under the age of 35. Podcasting is also very popular among the highly-educated populace, as approximately 86.4% of listeners have bachelor’s degree or above, while only around 28.6% of short-video users went to college.
Chinese Podcast Listener Demographics, Education Level
Compared to mainstream media outlets and short-video platforms, podcasting is a smaller, tight-knit community catering to the niche interests of their audiences. Online audio monthly active users only accounted for 16.1% of the country’s total mobile internet users in 2020, a penetration rate far below that of the short-video monthly active users of 88.3%.
China’s Podcast Market Landscape
The Growth of China’s Podcasting Industry
The future for China’s podcast market looks promising. Revenues in China reached US$193 million in 2019, and the industry remains the fastest growing podcast market around the globe. On the back of rising listener numbers, the market is set to expand quickly at a 37.3% CAGR from 2020 to 2024 to reach a total value of US$689 million in 2024. The forecasted revenue goal would make China the second largest market in the world.
Growth Forecasts for the Podcast Industry in the US & China
Podcast listeners in China have a strong tendency to invest in their niche. More than 87.8% of respondents in the PodFest China survey are supportive of the commercialization or monetization of podcasts. Likewise, in response to the survey question, “To what extent would you trust advertising promotions in podcast episodes,” roughly 39.9% of respondents said they trust the advertisements, while 47.5% of respondents gave the answer “sometimes trustworthy.” Chinese listeners are all-in on supporting their favorite content creators to make a buck from their work, which has thus given way to a lucrative industry.
China’s Unique Monetization Model
Despite the auspicious data on revenue growth, China’s podcasting market has two unique features. First, the monetization model is vastly different from that of the United States. While podcasts in the US are almost always offered for free while using ad placements to earn revenue, Chinese creators heavily rely on paid subscriptions, virtual gifts, and tipping to profit. That said, the ability for content creators to earn is contingent on user preferences and audience willingness to tip or subscribe. In the Chinese music industry, independent musicians could rely on artist support programs, like the Music Talent Initiative launched by big-techs, to advance their careers and draw income. However, corporate-sponsorship programs in the podcasting industry are limited.
Second, podcasters encounter major barriers from governmental bureaucracy. Many must compete directly with propaganda content, which is oftentimes heavily promoted by podcasting platforms. Moreover, content creators face censorship from media regulators, and the level of censorship has escalated in recent years along with the surge of podcasts. The tough podcasting landscape in China has made it difficult for the majority of podcasters to draw substantial enough incomes to transition from side hustle to full-time hustle.
Is Podcasting Big Business in China?
While many individual podcasters struggle to take their passion full-time, China’s tech giants have caught scent of the industry potential and have been more than willing to re-allocate resources towards the market. Internet companies have used podcasting to establish new audience channels while leveraging their venture capital divisions to invest in the fledgling industry. For instance, the pre-IPO Ximalaya is backed by major techs giants, Tencent and Xiaomi.
With strong financial horsepower behind it, Ximalaya has become the heartbeat of China’s podcasting market. Ximalaya is a Shanghai-based platform that provides a medium for independent podcasters to publish and monetize their content. Ximalaya boasts a large amount of high-quality user generated content (UGC), with over 7 million albums of podcasts available on its platform. Moreover, practically all of China’s most famous creators can be found on the platform; for example, popular creator Zi Youjun has over 280,000 followers, and his podcasts have been listened to more than 76 million times as of March 31, 2021. Likewise, the app hosted 250 million monthly users during the first quarter of 2021, with a 70% increase of mobile listeners over the same period from the previous year. With plans to file for a Hong Kong IPO at a valuation in the ballpark of US$500 million, Ximalaya has served as a benchmark for the industry and shown that podcasting is a growing business.
State Regulators Play the Role of Participants
While regulators have dominated the headlines in 2021 due to crackdowns on industries from private education and cryptocurrency mining to the online gaming sector, regulators are playing a different role in the podcasting market. Interestingly, regulatory agencies and various government bureaus play the dual role of censors and creators, rather than overseers, in the emerging podcast industry.
Prior to the economic reform of the 1980s, regulators mainly promulgated ideology via state-controlled broadcasting channels. Nowadays, propaganda organs have switched strategies and are proactive in exploring new online channels to disseminate national ideology. The niche of podcasting has become a key outlet for government propaganda.
A month before the Chinese Communist Party’s centenary celebrations, Xiaoyuzhou FM and JustPod, two main podcast apps in China, co-produced a series called “Red Tales of Pujiang River.” This episode narrated the Party’s revolutionary history in Shanghai, with the propaganda department of the Party Committee of Shanghai’s Yangpu District providing advisory and guidance to the co-production. Unsurprisingly, the podcast was featured on Xiaoyuzhou FM as top-promoted, front-page content.
No longer an industry on the fringe, podcasting has evolved into a tight-knit community for city dwellers looking to satisfy their itch for individualized, niche information. Along the way, the emerging industry has attracted market players of all types – from major tech companies and state regulators to side-hustling content creators. With all of these key players fighting for the future of the market, podcasting is set to become a big business in China.
However, it will be important to watch market expansion going forward. With only 6% of the entire populace having reported listening to podcasts, there is significant opportunity for growth. Still, podcasters will have to compete heavily with other popular media content forms like short-form video. With 58% growth in 2020 and a valuation of US$31.7 billion, short-form video is the largest and most quickly growing segment of the audio-visual market, posing a steep uphill battle for podcasters to compete for users’ attention.