The podcast’s blessing may also be its curse: it wasn’t invented to be profitable. A popular early term for podcasting was “audioblogging,” which alludes to its DIY origins. Anyone with a laptop, a microphone and a voice can host their podcasts on iTunes, SoundCloud and numerous other distributors. Not only do many podcasters enter the craft as listeners first, learning production and interview techniques along the way, but audio is also much cheaper to produce than video, which makes it more feasible to distribute podcasts for free.

Yet, if 2017 alone is any indication, the music business is investing heavily in podcasts as an integral part of its future. Within the last two weeks alone, Spotify and Google Play each launched their first original music podcasts, exclusive to their platform (Showstopper and City Soundtracks, respectively). Major labels like Sony Music Entertainment are experimenting with short-form audio podcasts centered around their back catalog. The latest version of social audio startup Anchor, which was released earlier last week, allows its users to incorporate Apple Music and Spotify streams into their broadcasts, enabling everyday podcasters to have a direct impact on streaming numbers. Even Techstars Music is sensing a financial link between music and podcasting, counting dynamic audio advertising startup Pippa in its inaugural class.

The history of podcasting is inseparable from technology. Its popularity rose sharply with the release of the iPod and other mobile audio players, to the point where the word “podcast” was crowned the New Oxford American Dictionary’s Word of the Year in 2005. Nowadays, an estimated 42 million Americans (15% of the country’s population) listen to podcasts every week. Hence, coming from a newly growing industry that historically has wielded songs, videos, news feeds and concerts as its only storytelling canvases, music companies and publishers see podcasts as a long-overdue means of reaching their most passionate fans.

“There’s a generation of internet-native journalists who didn’t get a journalism degree, but rather fell in love with blogging straight out of school,” says Naomi Zeichner, Editor in Chief and Director of Content of The FADER and the host of Showstopper. “Now they’re growing up and gaining influence in media. And like everyone else, they’re adjusting to these new platforms and tools that have emerged for telling stories.”

While the lower costs of podcasting do not forgo listener loyalty—88% of subscribers to any given podcast listen to most or all of its episodes, according to Midroll—the challenge that lies ahead is legitimizing and repurposing this user-generated format for a largely revenue-driven music culture. From developing dynamic advertising and subscription models to improving metadata and recommendation engines, podcasters are taking hints from Spotify, Netflix and similar companies in an attempt to secure their foothold as legitimate catalysts of music-industry innovation.

An Offbeat Alternative To Radio

At first glance, podcasting might seem like a direct threat to the music industry because of its competition for listening hours with terrestrial radio, which remains an important revenue generator for artists. According to Edison Research, the average American devotes 54% of their audio consumption to radio and just 2% to podcasts. For weekly podcast listeners, the percentage of time spent on podcasts skyrockets to 32%, while the proportion spent on radio decreases by more than half.

From a pure content perspective, however, podcasting is a complement, rather than a threat. “Podcasting is not radio because there’s no playbook,” says Tom Mullen, Senior Director of Creative and Marketing Partnerships at Sony Music’s Legacy Recordings and Host of the Washed Up Emo podcast. “It doesn’t have to be as formatted or as slick, and you can experiment with tons of different ways to tell your story.”

Indeed, the podcast format is particularly fitting for more offbeat narratives beyond the standard album or concert. “The term ‘music podcast’ is tricky to pin down, because there’s a crucial difference between a topic and a story,” says Hrishikesh Hirway, Creator and Host of Song Exploder and the newly-minted Host of City Soundtracks. “Music could be your topic, but your story is what makes you truly unique.”

For instance, Hirway’s conception of Song Exploder is uniquely informed by his experience as a graphic designer. “I produce and edit Song Exploder as a design project,” he explains. “The questions I’m asking about music are rather different than what I would have posed from a purely journalistic point of view. I’m trying to format the show as if it’s about problem-solving and innovation more broadly, which hopefully reaches people who might not even think they’re interested in music.”

Likewise, while maintaining a traditional interview structure, Showstopper sheds light on the field of music supervision, which is traditionally not public-facing but has been the driving force behind many pop-culture connections throughout history. “Supervisors are creative and powerful music curators, but they also do work that’s similar to what a lawyer does—dealing with the logistics of clearing and licensing music,” says Zeichner. “It’s a fascinating combination of skills: having the power to break bands and launch them on television, while also having to chase down paperwork. In part, Showstopper is about understanding the unique people who end up in that role, and what they’re able to create.”

A New Gateway To Superfans

Aside from providing space for non-traditional stories, perhaps the strongest value proposition that podcasts can provide for the music industry is their power as a tool for cultivating communities and nurturing fans. Dossie McCraw, Head of Video and Podcast Partnerships at Spotify, recently explained that the streaming service’s user base is “music fans first,” and could potentially convert its paying subscribers to avid podcast listeners. In fact, the way Spotify packaged Showstopper upon its release presented a seamless bridge between podcasts and playlists. Next to the Showstopper episode itself, Spotify listed adjacent playlists such as “GIRLS” and “Trending on TV” that expanded on the episode’s content.

The fan-focused, highly specific nature of music podcasts reinforces its status a companion to radio, rather than as its replacement. In fact, due to the longer duration of podcasts, listeners subscribe only to six podcasts on average, and stream only five episodes per week—a much smaller unit amount compared to music streams, considering that Spotify users listen to nearly 150 minutes of music on a daily basis.

“Radio is more like a Super Bowl commercial: phenomenal reach, but very shallow engagement,” says Matt Carter, cofounder of music podcast network Jabberjaw Media and host of The BadChristian Podcast and Break It Down. “A podcast is the opposite of that: you might have only 1,000 listeners, but they will likely be really devoted and engaged. It’s analogous to music fans who buy every album and VIP tickets to every show for their favorite bands.”

From an artist’s perspective, the nascency of podcasting also allows for more organic, more honest conversations that serve fans where online publishers and social media sites often fall short.

“If you do a lot of media as a musician, you inevitably run into situations either where the person writing about you isn’t even that interested in your music or your story, or they were just pitched the story by a publicist,” says Mark Kates, Co-Founder of Boston-based artist management company Fenway Recordings. “With podcasting, that approach wouldn’t work well, because it’s important to feel like it’s real, like the hosts and guests are coming from a genuine place. That might make it feel more amateur than what the industry is used to, but I love the wild-west feel of that.”

The Future Is In The Data

How does one turn this rules-free podcasting world into a viable, sustainable business? On one hand, akin to terrestrial radio, podcasts feed a counter-narrative to the dominance of algorithms in music discovery by vouching for human thought and word of mouth alone as trustworthy tastemakers. On the other hand, in order for music companies’ rising investments in podcasting to pay off, the underlying data around identifying and targeting listeners, tracking ad engagement and measuring overall growth needs to improve.

“Podcasters have a lot to learn from the music industry, which has been in the business of licensing and monetizing audio to help content creators for decades now,” says Simon Marcus, CEO of Pippa. “The podcast ecosystem is doing pretty well, but to an extent is held back by poor technology.”

While Spotify, Apple and Google are all potential market leaders for podcast metrics as the format transitions from downloads to streaming, a handful of emerging startups are devising their own, independent solutions. 60dB, founded by former Planet Money Tech Correspondent Steve Henn and former Netflix Senior Software Engineer Alisa Peters, is using short-form audio—more manageable than hour-long episodes—as the foundation for a more robust podcast recommendation engine. Pippa is building a dynamic marketplace for podcast ads, in order to support smaller podcasters who might not be able to secure larger sponsorships through networks like PRX’s Radiotopia. The tedious process for podcast music licensing also makes direct streaming integration like that on Anchor particularly exciting.

At large, the future of podcast business models straddles the delicate boundary between freemium advertising and paid subscription. “I think podcasting is held back right now because it depends so heavily on advertising revenue,” says Henn. “The data around advertising and listenership is elusive, so people aren’t spending serious money there yet. Even if the data does gets better, producers might not capture the value effectively, if the wider news industry is any indication. I would like to create an ecosystem around audio production that is more like subscription or public radio.”

It is no coincidence that these concerns closely resemble those of digital- and streaming-first musicians concerned about fair, sustainable compensation. Hence, podcasters would do well to team up with the music business in their current exploratory stage around data, in a landscape where the future of music is intertwined with the future of audio.

“We have a rigid investment thesis around solving the problems of the music industry, but that doesn’t mean our portfolio has to consist only of companies that license music content,” says Bob Moczydlowsky, Managing Director of Techstars Music. “Our definition of what comprises a ‘music company’ is really broad, from low-latency audio technology to AI-enabled composition to in-venue concert wearables. Pippa fits right into that mix, in that we see radio, podcasting and audio storytelling as essential parts of the music ecosystem.”

In fact, this year’s Techstars Music class as a whole makes a thought-provoking case not just for what defines music tech, but also for what areas within music tech are worth investors’ money—particularly because streaming platforms are nowhere to be found.

“That’s a big company game. We’ll let Spotify, Apple and Google fight that fight,” says Moczydlowsky. “Meanwhile, all the best practices around artist discovery, e-commerce, VR/AR, in-venue experiences and overall fan relationships are ripe for reinvention, and are positively impacted by overall growth in the category of music. As the industry continues to grow, there’s going to be a lot more willingness to experiment, so now is a great time to invest.”

This article can be found on Forbes.com