In MOL47, we read an email from listener Trevor. We asked for permission to publish it. We got it. Here it is:

I wanted to contact you in response to your question about what impact Apple TV will have on the monetization of podcasting. I think it will definitely have a major impact by increasing the attractiveness to podcast advertisers and for subscription based premium content models. As you mentioned, most people don’t know what a podcast is but they know about online video from the popularity of You Tube and similar services. You won’t see overnight results but as the awareness of the Apple TV builds, you’ll gradually see more and more people creating content to be downloaded from the internet and viewed on their TV.

As far as it being a mainstream product in everyone’s household, I don’t think it was meant to be. Sure, someday Apple would love to have an Apple TV in everyone’s house but for now it’s being geared towards the technology enthusiasts. If you look at the specs, the Apple TV has HDMI and component video outputs which are designed to connect to a 16:9 Wide Screen High Definition TV. It will also play 720p HD video, again designed for HD TVs. Now if you look at who has HD TVs, they are savvy early adopters of technology who most likely have at least one computer in the house and probably an iPod or some other form of media player. They would also most likely have the knowledge to transfer media from their computer to their portable player, so hooking up an Apple TV for them would be a piece of cake.

Apple is betting that based on the success of their movie and TV show downloads, the consumer will want an Apple TV to enjoy their purchases on their big screen TV while sitting on their comfortable couches. As they view the main screen of the Apple TV they see headings for their Music, TV Shows, Movies they downloaded and most importantly Podcasts. Even if the viewer doesn’t know what a Podcast is, they’ll most likely be intrigued enough to find out and once they realize that there are a ton of free video shows available they’ll surely download and watch a few. Now it’s up to the Podcaster or Content Creator to produce compelling content that will make them want to keep coming back for more.

Based on this demographic, the most logical type of podcast that would be of interest would be geared towards technology. Shows like Geekbrief TV, DL TV and Macbreak are always high up in the iTunes video rankings. With that said most people have interests other than just technology and although that may be what gets them in to the store, once there they’ll find shows on pretty much anything you can think of.

So where does the monetization come in? Short video shows like Ask a Ninja and Geekbrief TV are fine to watch on the computer in your office or on your iPod, but what about the longer shows like DL TV or Diggnation? I personally don’t want to spend 30 to 45 minutes watching a video on my 17” monitor or the tiny iPod screen, I would much rather watch it on my 50” Plasma sitting on my Lazyboy recliner. These shows are already benefiting from sponsors and advertisers but what if they were producing their shows in HD with the intention of them being viewed on big screens. That becomes very attractive to advertisers because now their message is larger than life and is being viewed by a captive audience. Sure you can always fast forward through the commercials but if the ads are relevant to the type of show, most viewers will be interested enough to watch. We are also so conditioned from network TV to sit through commercials, I find even when I record a show on my DVR sometimes I forget that I can fast forward.

While sponsors and advertisers are great and certainly worth looking into, I think the real money is in subscription based premium content. Producers should create their shows to be viewed for free, in a smaller iPod version that is ad supported, but provide a pay for HD version that is commercial free and can be downloaded through iTunes with a password. If people are willing to pay $1.99 for television shows that they can get for free, they should be willing to pay for content that they can’t get anywhere else. I’m not saying $1.99 per show is the right price, but maybe $2 a month or $20 for a years subscription could be very profitable. Screen Casts Online currently uses this model and from what I’ve heard has been very successful. To really entice free viewers to pay, you may want to offer some additional content that only subscribers can get. Anyone listening to this show knows that bonuses help sell the product. As more and more creators start taking this approach, subscription based models will become the common place and be easily accepted by the consumer. As the quality of the product increases, the price can also increase as everything has a perceived value. And don’t underestimate the value of niche markets. People are willing to pay crazy money for very specialized information.

The key to success in both these approaches is quality. You need to produce as professional looking video as possible with great information, and likeable talent. The writing needs to be clean, well thought out and to the point. If you’re creating something that’s a little more improvisational like Diggnation then make sure you’re funny, the laughter will keep them coming back. With the price of HD camcorders coming down, some inexpensive lights and the availability of great software like iMovie, Videocue Pro and Wirecast, the average person with some skill can product great content.

Thanks for your time and I hope my input was helpful.

It was sir - thanks!

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