Issue 198,  published March 5, 2019

Enter Luminary

Matt Sacks, the CEO of the forthcoming exclusives-driven podcast startup that aspires to be the Oh-You-Know of Podcasts, couldn’t-wouldn’t say much in the way of specifics when he joined me on stage at Thursday’s Hot Pod Summit. But we ended up getting much of those specifics on Sunday night anyway, when Luminary kicked off a soft launch and its first public-facing press push, through a flashy New York Times write-up.

Let’s go over the details:

(1) A Luminary subscription will cost $8 a month — so, lower than the cheapest tier for Netflix and Audible ($8.99/mo and $14.95/mo, respectively), but higher than Stitcher Premium’s ($4.99/mo).

(2) Despite the March press push, which was presumably timed for SXSW, the service isn’t expected to actually roll out until June. That’s pretty far away, and I’ve been told that it’s somewhat uncommon for a startup to exist stealth mode well before its actual launch. A curious choice.

(3) The service will start off with more than 40 ad-free exclusives. The portfolio looks to be a mix of pre-existing podcasts, new projects from existing publishers, and brand new productions. You can view some of those offerings on this page, but the list includes:

  • New shows from Adam Davidson (through his new studio, Arrow Productions), Guy Raz (on his own, separate from NPR), and Slow Burn co-creators Leon Neyfakh and Andrew Parsons (who weren’t able to carry over the Slow Burn IP from Slate with them);
  • Projects from Jacob Weisberg and Malcolm Gladwell’s Pushkin Industries, Lena Dunham (via Pineapple Street), Topic Studios, and Alex Gibney’s Jigsaw Productions;
  • Some Wondery shows, specifically Locked Up Abroad plus Hollywood and Crime;
  • Stuff from digital media companies like New York Media, The Advocate, The Players’ Tribune, and The Ringer (which will supply three new “original shows”);
  • Two shows from WNYC Studios — Spooked and Note To Self (now a co-production between WNYC and Stable Genius Productions) — which should theoretically raise the question of public radio, its mission, and a service like this; and
  • Love+Radio, which creator Nick van der Kolk is pulling away from the indie collective Radiotopia.

Several folks have already pointed out elsewhere that the line-up, as we see it, doesn’t seem particularly diverse, and perhaps more pressingly, it seems disproportionately stacked towards shows that already have followings or talent that’s already developed bigger name elsewhere. I’d need a more comprehensive list in order to assess the breakdowns along demographic lines and the ratios of established-upstart projects, but the murmuring here accentuates one of the community’s core anxieties around an entity like Luminary: should the platform grow sufficient power to be able to actually pick winners and losers, what they fund — and what they don’t fund — really matters, and strikes at the heart of podcasting’s celebrated openness.

(4) This detail, which I first learned on Thursday, was a surprise to me: on top of its subscription-driven exclusives business, Luminary will also be usable as a conventional podcast app that listeners can use to consume podcasts already out in the open. Previously, I had assumed the platform to practice a pure paywall. I guess I understand the broad logic of this: it’s easier to get people to pay for a ticket when they’re already gathered in the lobby. (A tortured metaphor, but you see what I’m trying to say.) However, I suspect this might end up being a complicating factor, particularly when it comes to building a differentiating case for Luminary, whose construct is essentially the same as Stitcher Premium, albeit with a significantly bigger war chest.

(5) Finally, here’s the detail that strikes me as most astonishing: Luminary has apparently raised a total of $100 million in venture funding. This revelation comes almost a full year after the Wall Street Journal first reported the company’s $40 million raise in a round led by New Enterprise Associates (where CEO Matt Sacks, now 28, once worked).

It also comes well before the startup has converted a single paid user.

Worth further noting: the company currently employs around 70 people — 40 of which, according to the Times, are engineers, presumably well-compensated — with offices in New York and Chicago. In other words, Luminary is a fairly expensive operation pre-launch, and that’s before we even start talking about how much the company must have committed to content deals, some of which, I imagine, must be quite costly given expensive talent. (I have no special insight into this, but I’m guessing that Guy Raz alone is probably valued at the amount of a few ranch-style houses in the Midwest, given the ascent he’s on.)

Look, I’m just an average schmuck who knows little beyond basic personal finance principles — not spending more than you’re earning, so on and so forth — so the notion of a largely untested content-driven startup raising $100 million to shake up a consistently unwieldy ecosystem is something that’s wildly distant from anything I’m able to wrap my head around. Sure, I’m aware that venture finance has its own universe that adheres to conventional logic as much as the bubble-world in Annihilation does to actual Florida, but I have to say: I gulp at the level of risk involved in a situation where a *consumer-facing media company* has raised that much money before validating any of its hypotheses out in the wilderness.

Again, I don’t walk the venture/finance world, and I’m sure there are ~business reasons~ packed in there somewhere. And to be clear: I’m not saying that this won’t work. I’m not intellectually confident in saying that about anything, ever, until the end of time. I’m just saying that, given the details, Luminary has the feel of a wild, wild gamble.

Anyway, I stand by my initial analysis of Luminary’s principal challenge back in the Spring of 2018: within the context of podcasting — defined, to this point, by its wealth of free ad-supported options — this particular venture is in the business of consistently and perpetually beating that entire universe of free alternatives. This doesn’t necessarily mean that the venture needs to provide better programming (however defined) than all available alternatives in the open ecosystem; which is to say, to be entrenched in the highly-volatile hits-making business. It can also mean that venture can simply opt for providing a better overall experience when it comes to ordinary people interacting with the world of on-demand audio in general.

From the sounds of the press push, Luminary seems to be primarily focused on the first notion, framing its value proposition to be based on the quality of its content. Here’s Sacks, from the Times piece: “What sets Luminary apart is our exclusive content right off the bat. Nobody comes close.”

The tricky thing about “quality” is its subjectivity. To state the obvious: “quality” means different things for different people and, not to go all liberal arts college on you, the concept is tied to specific structural productions of status, prestige, social capital, taste, and power. (Perhaps relevant to this discussion of perceived quality and prestige is the nature of Luminary’s unveiling: announcement via flashy New York Times piece.) It’s one thing to build a “quality” product aimed at converting a specific group of people — say, certain demographics of existing podcast listeners as we know them — but it’s another thing altogether when the expressed north star is literally Netflix, a subscription product that’s continuously growing off the fact that it’s well positioned to be most things to most (paying) people.

Ah yes, the Netflix analogy. I’ve written before that I find the analogy troublesome… not because the “Netflix for X” is overused to the point of cliche, but because the evocation almost always underplays a crucial fact: Netflix didn’t build an initial sustainable user base off the strength of exclusives; rather, it was developed through the easy provision of film and television products that were already tested in the marketplace, but were perhaps inefficiently or under-monetized. To put it another way, Netflix’s early success was rooted in giving users products they already knew they wanted, that they were already habituated into paying for, and that already went through their own awareness-raising cycles — and then later layering a much harder exclusives strategy on top that allowed them to expand into a different kind of business, though one backed by the stability of the older one. Point being: Netflix’s original content journey was gradual. In contrast, Luminary is tasked with a pure dead-lift: they have to originate a new user behavior, develop a programming pipeline that not only continuously converts more people into paid members but also continuously convinces them to stay paid members, and do all of that a rate that outpaces their spend over time. Oh, and they’d have to do that beneath all the pressure that a $100 million VC fundraise brings.

But anyway, back to the point about quality and subjectivity: the thing about the value proposition for something like Luminary is that it has to be specific enough to stick. As in, what specifically about Luminary’s portfolio should convince me — a ordinarily specific person with specific tastes — to pay $8/mo instead of turning to the universe of free alternatives? Is Lena Dunham enough? Is Adam Davidson enough? Is Leon Neyfakh enough? Is this particular version of Guy Raz, who I can already on other still-active podcasts on other (free) platforms, enough? More to the point: even if my answer to any of those individual questions is yes, will there be enough yeses for me to not cancel my Luminary subscription after a few weeks? (As it stands, personally speaking, I’m not sure.)

Let’s re-frame this line of questioning. Someone — I can’t remember who, if you recognize this let me know — once articulated a subscription or membership business not just as a transaction, but as an investment in continuous production. You give me, say, $7/mo in part because you trust in my ability to continuously surface the stuff you’d like to consume. When applied to this scenario, the question is: will you trust in Luminary’s ability to develop stuff you’d want to consume? An associated question: what is a Luminary show? What does it stand for?

Setting the notion of “quality” aside, I’m more comfortable thinking that Luminary will more likely live or die based on its marketing and user acquisition campaigns. Even if it doesn’t end up producing “best-in-class” inventory, it can still persist by successfully actual human beings to become and stay paid subscribers for something they can usually get for free. And so the more appropriate question that we should focus on: how will they spend their $100 million, minus overhead and content deals, to do all that? The Times already made note of outdoor advertising targeting New York, Los Angeles, and Austin. Will we see Luminary napalm America with more ads and billboards until Americans reflexively equate the word Luminary with podcasts? Will we see an aggressive ground game operation in the vein of Skimmbassadors? Will we see Luminary’s PR team attempt to command the trades and the prestige press? Will we see Luminary attempt to mint celebrities of its signed talent? Will they ask their signed talents induce a halo effect to its platform by promoting it on Twit- … oh wait, that’s already happening. This, perhaps more so than the content game, is the principal front-line for the company.

A closing thought: note that I haven’t really argued whether Luminary is good or bad for podcasting. Frankly, I don’t know. For what it’s worth, I tend to be sympathetic to the view that the ecosystem needs some paid options, if only to eat the risk for things like limited-run series and provide creators with an alternative revenue source. Open podcasting that’s primarily ad-supported, as we know it, is important, but it has limits for certain show types and people. The key question, in my mind, is whether a paid platform can be executed in an equitable and sensible manner, and whether it can do so without triggering some sort of winner-takes-all dynamic. Whether all of that applies to Luminary, we shall see.

Two final notes on this story:

  • Some readers wrote in asking how I think this whole Luminary business will play out. Look, I might dabble with tarot readings, but obviously, I have no idea. There is a possible future in which Luminary succeeds, but becomes a stable home for a certain kind of show and doesn’t assume a kind of landlord power over podcasting. There is also a possible future in which Luminary succeeds but does accumulate enough power to assume landlord status. There is also a future in which Luminary doesn’t really work out, and everybody there gets to fail upwards or whatever.

  • Readers also asked: should they work with them? Look, that’s between you and your god. But if I was a smaller publisher who needed cash flow for whatever reason, I’d probably do it, because if Luminary doesn’t work, at the very least it’s a wealth redistribution vehicle. Go get your money. I’d just make sure I’ve got other things going. Diversification, you know?

And that concludes Question Time with Nick Quah.