What do you get when you put together an Irishman, a Shanghainese and the internet? It may sound like the start of a bad joke, but that’s the story of Chinesepod, one of the world’s most popular podcasts.
When Chinesepod , which is recorded in Shanghai, first started, Irishman Ken Carroll and Shanghai native Jenny Zhu hosted almost all the shows. Each show was a mini-Chinese lesson, comprising a dialog and vocabulary drills. The podcasts were free to download, but listeners could pay for a premium subscription to gain access to PDFs of the dialogs, interactive vocabulary banks and more.
“We started in September 2005, and we couldn’t have predicted what would happen after that,” said Carroll, who co-founded the company with two other expats and US$100,000 in startup capital.
Chinesepod became one of the world’s most popular podcasts, with 300,000 subscribers to their free downloads, and a regular spot on the iTunes and Yahoo top 10 podcasts list.
Cue the copycats
The meteoric rise of the service has inspired a crop of entrepreneurs who hope to profit by putting a new, internet-powered spin on the age-old business of teaching languages – or language-casting.
These language-casters all follow the same basic business model: Offer a free podcast and hope that entices listeners to pay for premium services.
This subscription model has been effective for Chinesepod. Although Carroll declines to say how many paying subscribers he has, he says the enterprise, which currently employs 32 people, is profitable. According to Hank Horkoff, another Chinesepod co-founder, revenues will be over US$1 million this year.
Chinesepod’s services start at US$9 a month for extra services like PDF transcripts of podcasts and go up to US$200 a month for daily phone calls from a staff member to practice speaking Chinese. Its main market is North America.
The podcast is just one part of the equation, though. The secret to getting listeners to pay for premium services is community-building. The language-casters’ websites offer lively forums, blogs and other platforms that allow listeners to interact with hosts, and with one another.
This creates a self-reinforcing learning community, bonding listeners as fellow students – a powerful incentive to learn more, by signing up for premium lessons.
“We think of learning as very much a social thing,” Carroll said. “The social aspect of how people learn from each other, how they ask questions, get insights, get suggestions… all this stuff is really helpful to the learner. ”
Language-casts take advantage of the best the internet has to offer: user-generated content, highly contagious viral marketing and a practically unlimited global distribution, all at a fraction of the cost of operating a traditional language learning school or publishing text or audio books. Chinesepod, for example, does not have a marketing budget.
If imitation is the sincerest form of flattery, Japanesepod101 , based in Tokyo, is very sincere indeed. As its name suggests, Japanesepod101 is trying to replicate Chinesepod’s success in Japanese.
It uses the same business model and, according to Peter Galante, Japanesepod’s founder, the two-year-old podcast has an active listener base of about 20,000 and some have been signing up for packages.
“Last year compared to this year, revenue has grown exponentially,” he said.
Language-casting is cheap to set up, so virtually anyone can offer a product. Scotland-based Radio Lingua, for example, publishes podcasts for Spanish, German and Italian learners – all as a side project by founder Mark Pentleton. Its most popular podcast is Coffee Break Spanish , which Pentleton says has an audience of 80,000 to 100,000 per show. He adds that Radio Lingua, set up last September, is now profitable, and it is looking to expand beyond its scope as a hobby.
“It doesn’t matter anymore where you are,” said Pentleton, whose day job is educational consulting, said. “As long as you have quality content, there’s no reason why a Scottish person can’t teach a language… all over the world.”
Ease of entry
These same low entry barriers may prove to be the weakness of language casts.
“No doubt [language-casting] can make money, but do people learn the same way [everywhere]?” asked Ron Cao, a Shanghai-based partner at Silicon Valley firm Lightspeed Venture Partners. “The barriers to entry are low, and people learn differently in different countries.”
While the language-casters have been content to nibble on the crumbs of the global language learning market for now, they are now looking for a bigger slice. The allure is understandable. Leading language services company Berlitz International, for example, reported US$464.9 million in revenue last year.
The language-casters will try to boost revenues by adapting their products to teach different languages. Chinesepod’s parent company, Praxis, has already launched Spanish Sense in an attempt to crack the huge Spanish learning market in North America. Galante is launching a Korean podcast this year.
“If Spanish Sense really gets traction, I think we’ll be looking at a very disruptive business model that could potentially attack the Berlitz’s of this world,” Carroll said. “If we got anything like a fraction of the market share of what Berlitz has, we’d be so profitable it’d be obscene.”