eMarketer has just published some interesting stats on Podcasting that shows it’s growing very nicely and not in terminal decline, which seems to be the popular perception. Another case of the Trough of Disillusionment in Gartner’s Hype Cycle?

The research estimates that the current US audience is 18.5 million and will increase by 251% to 65 million by 2012. To put this in perspective, I reckon* that about 225 million people listen to radio today in the US, so there’s plenty of upside here.

One of the problems with Podcasting is the business model. With few exceptions, subscriptions haven’t worked, so we’re back to dear old the ad-funded solution - not that there’s much wrong with that in principle. However, the market is very fragmented today meaning that most Podcasters will find it hard to get on mainstream advertisers’ radars. Advertising is primarily still about reach and unless you can deliver millions of ears, uptake is likely to be minimal.

So I was quite surprised to read that the current market size is already $165 million in the US and is expected to rise to $435 million by 2012. Again, this will be tiny in comparison to other media, but it shows that there’s a business to be built for Podcasters themselves, as well as some kind of advertiser aggregation play - an AdMob for the Podcast industry, if you will.

The research proposes a number of reasons for growth, ranging from ease of download, the proliferation of MP3 players (although most Podcasts are apparently still consumed on the desktop) and promotion by traditional radio stations.

The final reason they cite - evolution of smart phones and proliferation of affordable mobile data plans - is the most interesting for me as I’ve been saying for ages that this is why Podcasts are going to be huge. The marriage of mobile and audio is much more appropriate than mobile and video, if you think about it. And this is why I believe that the forecasts they make will end up being conservative in the end, even if they look bullish today.

In my Predictions for 2008, I suggested that while the opportunity is huge in the long term, this year would be a tricky one for Podcasters and that the challenge would be to stay in the game until the time was right. I still believe that this is a fairly good assessment, but this research certainly gives the players reason to be optimistic about the future.

* Calculation based on current US population is 300 million. Assume 80% are over 12 years old. 94% of over 12’s listen to radio, albeit calculated with controversial methodology.