Patrick Hill is CEO and founder of Disctopia — this interview has been lightly edited for style and readability
JC: What do you do every day?
PH: I help creators and businesses transform their media distribution through audio and video. It can be anybody from an independent podcaster to a media company trying to get into the digital audio space , or a school, trying to introduce podcasting to their student population. Every day is different, and I’m happy to do that.
JC: So tell me how you set up Disctopia. It’s it’s all to do with a friend and a mixtape, right?
PH: A friend knocked on my door, and asked me to burn him a CD. I wasn’t burning him a CD in 2017, that was ridiculous: but I built him a website, and I put a PayPal button on it. He tweeted it out and put it on Facebook, and within an hour, he made around $300! That’s when I got the idea of distribution of content on your own terms: at that time, there was only Bandcamp and SoundCloud. So I did some research - I went down to SXSW, I went to a couple of REVOLT conferences. So Disctopia started with music - we built our platform for musicians by giving them merch sales, by giving them pay per play, because that’s how the music industry ran.
And then the pandemic happened, and podcasting took off. And I met DeVante Pickering, who now leads our technical strategy, and we started adding podcasts to the platform. Podcasting is such a unique industry - and podcasting has embraced our brand faster and more wholeheartedly than the music industry.
We hit the ground running at Podcast Movement and everyone was like “Who are these guys? What do they do?” Since our foundation was from music, and we’re giving all those features to podcasters, it just became a unique story and we kind of just kind of took off from there in the podcasting world.
JC: You’re quite unusual because you’re a full RSS podcast host, you do video as well, but you also allow podcasters to sell merch as well, don’t you?
PH: Yeah, and that came from the artist side. A good band is only as good as their t-shirt, you know! So we gave that to artists first and then podcasters were like - well, we can use that too.
The metrics say that most podcasts don’t last after seven episodes - it takes a good year of recording and distributing podcasts to make any significant amount of money. But if you have an audience of just 15 listeners, and if two of them buy a t shirt, that’s 50 bucks minus the costs. You made your first $30 much faster than you would selling CPM advertising. And so we try to make that more accessible.
JC: Should Podcast Business Journal sell hoodies?
PH: No! But we’ve just engaged with a partner for curated art books, we want to do notebooks, so we’ll make something happen!
JC: Disctopia also promises to pay podcasters $0.05 per stream through its new app as well, which is which is a high payout. How does how does that work?
PH: I mean, honestly, I wanted to go to ten cents per stream, but the the financial guy that we hired wouldn’t let me.
So it really it works just the way music works: that’s where it came from. We want to pay podcasters per play. Now we understand how the RSS feed works and how that RSS feed can go out everywhere. So, the five cents per play works when you make an episode exclusive to our platform. Yes, that sounds dangerous - people told us “so I only get paid what is played on your platform, but your platforms aren’t big enough yet, there’s not as many users as those big other guys”, but the first question I ask them is - what do those big other guys even pay? And then I get I get silence. They don’t pay you anything.
We use the RSS feed for our advantage, because in our platform, you don’t have to mark every episode exclusive. Episodes one, two, three and four can be public to the world on the RSS feed, but for episode five - you got that great interview with the new King Charles. You want to keep that behind the paywall; you just let everybody know.
One of our biggest podcasts is the the number one Black True Crime podcast. And so what she does is she talks about the actual incidents and the crime. She finds either the victim or the family’s victim, or she actually finds the person who did the crime. She will talk to them about why they’re in jail and she makes that episode exclusive. She’s doing very well at the five cents per play: she has a has a growing fan base of probably around ten to fifteen thousand listeners, and out of that she has about 200 exclusive plays per episode.
Disctopia allows podcasters to earn from 5 cents per play, but also donations and value-for-value.
JC: I noticed that you are “Podcasting 2.0 Certified”. What does what does that mean?
PH: Actually, if you’re on a host and then or a platform that’s not Podcast 2.0 Certified, then you’re behind the eight ball on that one.
For creators, the biggest thing it means for them is probably freedom. Their host is doing things to help them stay independent. It’s helping the whole industry keep podcasting open. The RSS feed was made open for a reason: if it wasn’t for the RSS feed and Podcasting 2.0, podcasting would have become the music industry within two years as far as people getting paid in, far as people earning royalties.
JC: You mention value-for-value. What’s that?
PH: Value-for-value allows creators to get paid literally by the second, and it also allows listeners to show how much value they get from the podcast. So I can give you any amount per minute, or boost you an amount on top, and value-for-value allows that seamless transaction to happen across podcast platforms.
It actually keeps us out of it - we can’t even really touch it. We do have a small fee but is really very small, like 3%, and that’s just to get it from one end to the other. It uses the Lightning Network, so it’s literally hitting your wallet the moment they’re playing it.
We did a demo in Podcast Movement in Las Vegas where someone pulled up our app and hit play, and literally the satoshis were just going, going, going, going, going, going, going, going!
If you don’t know what a satoshi is, it’s the smallest amount of a Bitcoin that you can give someone - it’s like giving someone a penny, but getting a penny per second off a 90 minute podcast is something that can revolutionize the industry.
The RSS feed and web 3.0 together is like taking an old technology and putting it in a modern house. The RSS feed has literally caught up to a new way of doing things as far as payment is concerned, I do think is revolutionary. If we can get it in the music world, it’ll really be revolutionary far as the entertainment industry is going.
JC: In terms of your pay-for-plays, how does the business model work there?
PH: We have a free account where you can just come in, listen to free podcasts. Of course, you can also listen to free music based on the creators choice. If they want to market free, then it’s free.
We have another level is $6.99, and that money is then shared with the creators who mark their stuff exclusive, whether it be podcast or any other form of media.
And if you choose $9.99, we deem you as a creator. You can upload audio, you can do things within the platform. And if you decide to go to $19.99, that’s when you get video and merch, you get the whole gambit.
JC: The one thing that I haven’t heard you mention is advertising. Why not?
PH: We’ve purposely stayed away from advertising. It comes back to our roots, our values of music. At the time we started, advertising was so far away from music that’s changed. Now, Spotify has free accounts that means ads come every third track, and we’ve purposely stayed away from it as long as possible.
Some of our bigger clients are really, really hammering on us for dynamic ad insertion. We’re coming out with some cool things with the we’re we’re going to do it - we’re going to do it in the Disctopia way, we’re going to make you, the creator, get a 90% share. That’s my goal.
I have to build it in a way to where the creator or the content owner, whether you’re a huge network or a guy in a basement, receives 90%. We have filed a patent on on our way of doing it to allow the creator to receive 90% of any ad that is placed on their content, and that is including music, podcasts and video - especially podcast video. The biggest one, as you know, is YouTube and creators have very little choice of what ad, when it plays, where it plays. You kind of pick and choose and let the algorithm kind of figure it out based on the audience. But we want to change that, and we want to give the creators of 90% of their CPM. And so I can do that effectively, technology costs have to come down a little bit - we’re currently in a inflated market, but once that comes down a little bit, I should be able to do advertising the correct way.
Now, right now we don’t stop any podcast from putting an ad on their on their content. We don’t stop anyone from doing anything for their advertising or revenue. We just don’t forcefully place any ads on any content. It’s really their choice. We want to leave creators that freedom of how they want to earn revenue.
JC: Before we started recording, we were both talking about the state of the industry. Where are we going, do you think?
PH: I see content and streaming in a very positive way. The podcast industry is a little bloated on both ends. We’re bloated with content purchasing and advertising, but we’re also bloated on the hosting side.
You link to a lot of great data on your site, like the top 200 hosting companies. Even in the top 100, some of those hosting companies only have, like, 200 podcasts on them. And even that is not cheap - you might have two podcasts on your platform, but one of them might be the number three podcast in Spain and your bandwidth charges will be just out of this world. You can’t really survive. So once we do a lot of consolidation, we’ll start to see the industry grow.
Right now, the industry is growing from a copycat standpoint, instead of of an innovation standpoint. And so, everybody wants to do ads, or everybody wants to do AI marketing, everybody’s the same. What we need to do is grow from an innovation standpoint - how are we going to innovate the industry? And that’s the only way that industries grow: it doesn’t grow from every single company doing the exact same thing.
And so once we go through this current consolidation period, you’ll start to see more innovation: and hopefully we get there sooner than later, because as we know, there’s going to be, some some difficult conversations over the next 18 months.
JC: Patrick, thank you for your time, and for your support of the Podnews newsletter as well.