From the perspective of having understood this term from my involvement in the arts, I think this is both a good thing and yes - a bad thing too. Let me start with the bad.
Like any new term that arrives in a business context, it is prone to being used to recast the dye on existing efforts. As I see it, audience development does not equate one-to-one with such efforts related to relationship marketing, selling approaches, lead generation, and other similar tactical means. Doing so can actually do more harm than good. How? If pure audience development is laden with high pitchy selling, it can be a major turn-off.
There is a difference between getting someone to be engaged and getting someone to act. Since we were in college with our outdated text books, we have had the notion ingrained in us that the job of marketing and sales was to get someone to act - primarily that act is to buy. Do I need to also go to the other message pounded into our brains over the years also? The one about making sure there is ROI on any effort? This pressure undoubtedly makes the concept of audience development fall victim to being another label for campaigns, lead generation initiatives, and the likes.
In order to be successful with audience development, you need to know your audience well. Many business organizations today make the false presumption that they know their audience. Some well-intentioned audience development efforts can wind up reaching the wrong audience - or worse yet - reach no one. Many a good speech writer always starts with that good old sage advice of a good speech starts with knowing your audience. The same applies to audience development.
Let's take a look at some good.
In the new world of content marketing, the idea of thinking like a publisher has taken root. A focus on audience development and engaging an audience can help bring this idea into focus. Do publishing efforts truly engage your audience? Are they learning something new? Do they want to share what you've published? Sharpening your focus and understanding the purpose of your content - whether for audience development or for marketing messaging can help you develop a receptive audience for both types.
Defining your audience, as done in the context of the arts, can translate well to the business world. It also fits well with the purpose of crafting buyer personas for your organization. Here's how. In the arts, you are forced to go beyond simple profiling of your audience. You must get to know them at a deep level. What are their interests? What is the level of refinement with this interest? Do they care about abstract or modern art? What goals do they have when they are members? Is it a night out or a deep commitment? Getting at this deep understanding in the arts shapes the future programming and licensing of theatre productions or exhibits. In the business context, crafting buyer personas with an eye towards audience development means you must go well beyond the idea of simple profiling.
Understanding the concept of audience development, in its true sense, can help to formulate plans around social media. One of the biggest complaints I have heard about social media, when conducting qualitative interviews, is that some companies see social media as just another sales channel. This is similar to attaching additional hoses to a constant high volume stream of water - gushing out an endless stream of blaring sales pitches. Social media is an excellent audience development medium when done right. For the arts, savvy arts and cultural organizations have expanded their audience base through social media.