Six hours before I packed my whole family up to head out to Australia for three weeks, the team at Apple Podcasts briefed me on the Apple Podcasts HLS announcement that would be coming out that same day. That was a lot to take in, and the pressure to write an article on the topic while in Australia, leading up to Podcast Movement Evolutions at SXSW which Apple Podcasts will be keynoting at, was pretty overwhelming.

Until I read every hot take I could possibly find on the topic and realized that maybe, I should think on this a little bit longer than I typically would when there’s interesting news to share. We’re not journalists at Sounds Profitable; we’re a trade association that works incredibly hard to get out as much information about podcasting, ours or otherwise, to help all of us grow this industry. Sometimes I forget that the newsletter can be a mouthpiece for that because in the six years since we started the company. My role has focused more on just talking to everyone instead of writing each week. But this announcement is the perfect opportunity to fix that.

What It Is

Apple Podcasts will start rolling out support for HTTP Live Streaming (HLS) which supports Video, Audio, and full support for HLS Interstitials which is how dynamic ads are served. If you want the full technical breakdown, Podnews nailed it, so my focus is more going to be on: What does it all mean? And why is it important?

Users can seamlessly switch between your identical video and audio content within Apple Podcasts on iPhone, iPad, Apple Vision Pro, and the web. Weirdly, not Apple TV. The content has to be identical, but your hosting platform can provide you the ability to upload the highest quality of each directly vs the only option being extracting the audio from the video.

HLS isn’t replacing RSS. For shows that choose not to utilize video in any capacity, RSS is still the protocol for everything. But any episode that uploads a video, HLS is utilized for both video and audio.

HLS just so happens to be an open standard like RSS, but a key difference: there’s no governing body for RSS currently (though the Podcast Standards Project has done a killer job as stewards of it) while HLS is entirely governed by Apple. Each podcast player that implements an open standard gets to pick and choose what they implement, so just like RSS, the full bells and whistles of HLS aren’t implemented.

Another incredibly important thing to note that I don’t believe has received the attention it deserves: IAB certification is all about server logs, the requests received and responses sent from the hosting platform, not the protocol of delivery (RSS or HLS). This means certified hosting platforms that support HLS with Apple Podcasts are able to report on Downloads and Ad Delivery across HLS Video/Audio as well as their current RSS implementation. And this HLS Video/Audio solution isn’t proprietary: the same “multivariant playlists” that you will be sending to Apple Podcasts can also work, without any changes, in other podcast players in the future – making it easier for everyone across the ecosystem to add video.

That’s one less instance of fragmentation for our industry to try and resolve.

Your prefix analytics works the same.
Your ad delivery pixels work the same.
Your entire ad stack (can) work the same.

Let’s open that can.

HLS Interstitials

HLS Interstitials were implemented by Apple as an analogue for RSS’s Server Side Ad Insertion (SSAI / DAI). If you dig deep into the main Apple HLS spec doc, you’ll find all sorts of neat things that can be done and are done when the same company owns the client-facing app and the server with the content. While we can lament the lack of ability to place in unskippable ads as part of Apple Podcasts specific implementation of HLS, we should also celebrate that Apple isn’t requiring us to identify the ads in the timeline. Cool features aren’t great when they only apply to a small subset of your delivery.

Just as the episode content requires both video and audio, the ads must serve both video and audio. So while your RedCircle OpenRAP VAST URL or all your unique programmatic stack absolutely can work in this environment, if it’s not providing both video and audio, you’re going to be serving ad free in both formats if you go live before figuring this out.

But I’ve got to say, with a challenge like that, seeing Acast, Amazon’s ART19, Triton’s Omny Studio, and SiriusXM Media (including AdsWizz and Simplecast) announced as early adopters is really encouraging. Acast and Omny Studio are also on the most recent Spotify announcement about their soon-to-be-implemented plans. Triton and AdsWizz both offer Supply Side Platform (SSP) solutions. And AdsWizz and Amazon both offer Demand Side Platform (DSP) solutions. If you look back at the messaging and statements of these four companies over the past 6 years, they have all been adamant in defending their place in the podcast and creator ecosystem, which this Apple and the previous Spotify announcement really cemented that their points were heard.

Quick tangent: it feels like just yesterday that our industry was small enough that we were all talking about everything and collaborating on everything together. As someone who gets to talk to so many of you in private conversations, it’s important to highlight that’s not the case anymore. It doesn’t mean we’re not all aligned with growing and advocating for this space, you can clearly see that from announcements like this, but it does mean we’ve matured. While it might feel bad that the table isn’t open to everyone, I truly feel like the companies we all get to pick from to represent us at the table have never been more empowered to fight for what benefits all of us.

When a DSP receives an uploaded video ad, it can absolutely create an audio version of that ad before sending it to the SSP. SSP’s tend to cache the first instance of an ad they see before serving it, so if it’s only video they could strip out the audio, or if audio they could make a static image video. Publishers can upload both versions of their ads directly or take advantage of hosting platform tools to convert the files.

All of it is technically solvable, but there’s two big conversations we all need to be having internally and with our demand partners:

• Is that a good user experience, to listen to the audio of a video ad or to see a static image for a video ad? How can we do better?
• Is the allure of video podcasts enough to convince programmatic video ad buyers who are used to receiving more real-time and client side analytics that Download and Ad Delivered work just fine? 

Thankfully, we’ve got time to solve those questions.

The Cost of Doing Business

There are two costs associated with HLS that we need to talk about.

The first one is pretty straightforward: the infrastructure to support an increased flow of requests for HLS delivery is substantially more expensive than RSS. We’re talking the difference of 1 request for an RSS file to 450 requests for segments of that same file, all for just one person. What this means is that supporting HLS becomes far more manageable the larger the hosting platform or parent company of that hosting platform is so that they can better negotiate those rates. What that means for the smaller hosting platforms, time will tell, but HLS isn’t replacing RSS.

The second one is more nuanced: Apple Podcasts will be charging what appears to be a not-publicly-disclosed CPM-based tech fee to hosting platform ad servers for the utilization of HLS Interstitials. Apple’s press release worded this as “ad network” but it means the hosting platforms that are participating who have ad serving capabilities. It applies whether it’s a direct served campaign or programmatically sold, but it’s important to note that if you’re baking all the ads into your episode, there’s no cost applied by Apple.

While it’s clear how Apple is charging for HLS, we haven’t seen anything public yet on how each hosting platform is handling it. It wouldn’t be unreasonable to see both applied costs for the hosting of video and distribution over HLS as well as fees associated with serving ads. And while that might be a change of pace for podcasting, it’s entirely normal for content distribution and ad serving in other channels. While I get that I’m asking all of you to celebrate that we have been incredibly fortunate as an industry to stave off the general and technical costs of doing business for so long, those costs may alter business for many of you.

Until we know whether we can justify higher CPMs for this inventory and how many people will be consuming video on Apple Podcasts, it’s hard to do the math today to figure out where this all nets out.

But I think that’s more of an issue of not seeing the forest for the trees.

Future State

I don’t think this is just about podcasting.

Sure, there’s an immense opportunity for creators to now utilize their hosting platforms and ad servers to deliver HLS content not just through Apple Podcasts but their own app and website.

And when you look at what Spotify is doing, which can often feel like a midpoint between what Apple just announced and what YouTube offers, it seems entirely possible to believe that Spotify will move in the direction of supporting HLS as well. Especially if there’s massive support behind it from both hosting platforms and publishers.

But what about music? Audiobooks? Film and TV?

While there are so many streaming solutions out there implementing HLS in one form or another, I haven’t personally come across any examples as large as what we’re seeing today where a publicly available app connects to multiple content distribution hubs it doesn’t own. So what does it look like in a world where Apple Music opens this up? Or Apple TV? How would companies like Spotify, YouTube, and Netflix react to a world where Sony says “if it works for podcasting it can work for us” and puts their foot down on uploading their content to all of these individual apps. How many apps can you stream Spider-Man on anyways?

It’s really easy to focus on “who is going to watch podcasts on Apple Podcasts?” Maybe I’m entirely off base here, but that’s not where I’m focusing. It’s “who is going to adopt HLS and empower creators to own their own content distribution”, which I think is pretty monumental. But it only happens if people buy into announcements like this and start asking more of the places they currently distribute content to and even evaluating where they can hold back on buying into offerings that aren’t as open as this one.

Wrapping It Up

The entire world says the word podcasting now without immediately making a joke. Taylor Swift got on her now-fiancé’s YouTube show to announce her next album, called it a podcast, and none of us had a chance to celebrate. The opportunity around all of us is immense and every single other channel is looking for what they can pull from our industry and into theirs.

So when the platform that started it all reinforces to podcasters that the center of their universe should be their hosting platform along with supporting their rights to manage their own distribution and advertising flow, it’s a big deal. The thing about podcasting that has stuck with me the most is how much of our success is retrying things that have fallen short in other creator economy industries (like driving people to your own individual subscription) but finding success with them. In reminding creators and content rights holders that they have more options than simply uploading content to another walled garden.

We got here through hard work, and we should applaud Apple for buying in, but most importantly those hosting platforms that made it happen. We should support and buy in to what they’re asking of us, because what Spotify currently offers for SAI isn’t that wildly different in concept from what Apple has now offered, and two of the partners Apple announced happen to be on Spotify’s announcement list. Think of how valuable it would be to reduce the fragmentation that’s holding us back as we expand to even more platforms.

This announcement changes a downward spiral of ownership that many of us didn’t believe could be reversed. So let’s buy into it in whatever way we can, and see just how far we can take this momentum.