The introduction of subscription revenue and heavier loads of advertising are two of the ways podcasters are looking to increase the monetization of their content. Owen Grover, CEO of Pocket Casts, says it’s great to see podcasters test the boundaries of industry business models. But he says a lot of questions remain about some of the new ground that’s being plowed.

Since the start of the year, Himalaya and Luminary have burst onto the scene each armed with $100 million in funding and announcements they plan to offer up subscription-based podcasts. Himalaya has offered few details although it will draw on the expertise from one of its investors, Ximalaya FM, which is the top spoken audio platform in Asia. Luminary says it will charge an $8 per month subscription to access the roughly 40 shows that will be exclusive and ad-free.

Grover says a proliferation of new business models is important for the industry. “The podcast industry has traditionally been an ad-supported medium, and that’s going to continue to grow. But direct support from listeners is going to be more important, tapping crowd-funding and subscription models,” he said in an interview with Cheddar.

But Grover also questioned whether it’s too early in podcasting’s life cycle to switch the model from one that’s ad supported and free to one that looks more like Spotify, Netflix or Hulu. “Those markets were much more mature and there was a well-established pay model in place,” he said. “Podcasting has traditionally and typically been free. The question that we need to ask ourselves is what problems are we solving for listeners? There is a wonderful array of content available to listeners right now for free. Is the industry ready for paywalls? We’re going to find out in the next year or so.”

That echoes similar concerns raised by Conal Byrne, president of the iHeartPodcast Network at the RAIN Podcast Business Summit last week in New York. “For the time being, let’s default to ubiquity and make the content available everywhere anyone wants to consume it,” Byrne urged the industry.

Pocket Casts was acquired by four of the most prominent podcast producers in the U.S.–NPR, WNYC Studios, WBEZ Chicago and This American Life–last May and Grover says he’s also worried that a “walled garden” approach could hurt independent show creators. “Walled gardens generally benefit the people who own the walled gardens, not necessarily the creators who build so much value and interest in the space,” he said.

Increasing Podcast Ad Loads

Podcasters are also looking beyond just subscription revenue. As anyone who has listened to podcasts through the past decade can attest, the amount of advertising on the medium has increased along with consumption. “That is inevitable because the medium is so effective,” Grover said. “The question becomes how do you fit the formats and the delivery mechanisms with the audiences and their expectations.” He points to Pandora as a warning, since as the streaming music service increased the number of ads it served listeners, overall satisfaction with the app went down. “The question is do you have brand permission, does the content support it, and what’s the right balance the right mix,” Grover said.

There’s little doubt to Grover that podcast is an effective advertising medium. “It’s proven itself in the scrappiest way possible,” he said. “Which is podcasting has been driven by direct response media spend, and if you don’t perform you don’t get those dollars.” That message has been received by marketers according to Grover, who credits it for why podcasting can get CPMs as high as $40 to $60. “As we look forward to how that growth is going to continue, I think you are looking at more involvement and engagement from brand advertisers, not just DR, and there is a whole bunch of business model diversity on the horizon,” Grover predicted.

In the brief but wide-ranging interview, Grover also told Cheddar that he credits daily news podcasts like the New York Times-produced The Daily for helping accelerate the medium’s growth during the past few years. “Creating that daily habit, bringing people back to the medium day after day, has been I think one of the major innovations that has driven growth,” he said. But to grow podcast beyond the well-educated, affluent early-adopter crowd, Grover said it will need to do more to reflect the diversity of listeners. That means more shows that target women and people of color. “As we bring in more diversity of thought and more diversity of voices,” he said, “telling the stories that are resonant and meaningful to them, you’re going to see more audience growth from those efforts.”