Tech companies jumping on podcasting craze

updated 2:21 p.m. ET July 16, 2005

SAN FRANCISCO - The runaway popularity of blogging, which has turned everyday people into online news outlets, caught the media establishment off guard. The industry is trying not to make the same mistake with podcasting — which lets nearly anyone "broadcast" on the Internet.

Everyone from Disney to Newsweek to National Public Radio is now offering podcasts, and Apple Computer, Inc. last month made it a whole lot easier to find them and download them to iPods. (MSNBC.com also offers podcasts.)

While profits remain elusive, there's a bigger prize out there — the company that manages to become the go-to Web site for podcasts could gain enough leverage to strike favorable deals with proven content providers, and generate cash by charging for subscriptions and advertising.

Podcasts are recorded audio files, distributed via Internet download. They can be stored on computers or digital music players and played back whenever the listener chooses. Like bloggers, podcasters can sound off on whatever they please — from politics and religion to gladiolas and glass-blowing.

For now, podcasts are mostly talk — the complexities of the music-licensing business make it exceedingly difficult to legally include songs in the audio files. Podcasting isn't likely to explode in popularity until companies figure out how to guarantee that music owners get paid.

Help for podcasters, listeners
But as tens of thousands of podcasters seek audiences, a growing number of companies are trying to make sense of what's out there and become magnets for the best of it. They include not just Apple but also Podcastalley.com, Podcast.net and as of last weekend, another startup — Odeo.com.

In Odeo's newly renovated loft across the street from the Giants' ballpark, Evan Williams and his first nine employees have hustled to launch the beta version, which creates directories of podcasts for downloading and provides studio-quality sound tools for podcasters to use.

Odeo encourages podcasters to upload their shows on its site. Recognizing that one of the main complaints about podcasting is the difficulty of finding them, Odeo organizes the shows by genre. Odeo's headings includes arts, food, religion, sex, and technology. There is even a one called "weird."

To help listeners discover new shows, Odeo employees scour the site for the best and display their recommendations on the "Featured Channels" page.

Williams, who co-founded Blogger.com before selling it off to Google three years ago, is enough of a believer in podcasts to bankroll Odeo out of his own pocket. And while he won't say exactly how he plans to make a profit, he says charging for premium content or for access to digital recording tools is a possibility.

Gaining legal access to popular music may be what's needed for podcasting to become profitable. Without music, skeptics doubt there is any money in it.

"There is no easy way to license music legally for podcasts," says Fred von Lohmann, an attorney for the online civil liberties group Electronic Frontier Foundation. "You have to clear the rights one song at a time from record labels and artists and that's a painful process."

Williams, however, is optimistic: "If podcasting finds a large enough audience, the money will come."

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