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Five Storylines

Now that we’ve set the table, let’s lay out some dishes. (Is that the right next step for the metaphor? Whatever. Roll with me here.) Lacking psychic abilities, I don’t know what’s going to happen next, but I do know a few stories that’ll get us going.

Here are five major beats that we’re going to start the year thinking about:

The Politics of Granular Analytics. Here’s what’s at stake: many podcast companies would like more granular audience analytics so that they may better attract advertising dollars, and further, it would be great if they could continue to have some direct control over their data pipelines no matter what happens in terms of podcast distribution over the long run.

Two efforts to watch: (1) NPR’s campaign to foster industry-wide implementation of its Remote Audio Data protocol, and (2) the IAB’s Podcast Measurement Compliance program certifying publishers that have adhered to its analytics standards. (One way to think about this: the latter is trying to set the floor, the former is trying to raise the ceiling.)

It’s not going to be easy. Herding cats may prove to be difficult — and not to mention the platform-sized felines, like Spotify and Pandora, some of which will likely want to enforce their own analytics paradigms — and there’s always the strong ideological resistance upheld by certain corners in the podcast ecosystem that reject further extraction of listener data.

Something Paywalled This Way Comes. Last May, a curious startup named Luminary Media raised $40 million in venture funding to build what may be the first true “Netflix for Podcasting” test. The company has remained virtually silent in public messaging since the fund-raise, but it’s been spending that time building out infrastructure, accumulating content assets, and signing deals. Soon, we will see it enter the market, where it will almost certainly advance the conversation around whether or not people will actually pay for podcasts.

For what it’s worth, my thesis on the company remains unchanged. Pardon me for quoting myself off “The Subscription Problem” that I published last June:

Such a venture is basically in the business of extending the promise that it can consistently and perpetually beat the entire universe of free alternatives. This doesn’t necessarily mean that the venture needs to provide better programming than all available alternatives in the open ecosystem — that is, 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 interacting with on-demand audio in general. Consider one of the fundamental issues for new listeners trying out podcasts: they are made to navigate the full spectrum of options that spans millions and find content that means something to their given tastes.

The game, as they say, is afoot.

The Marketplace, Being and Becoming. For the most part, podcast advertising is a fairly manual process. As a publisher, you either work directly with an advertiser, or you access them through a network like Midroll or an agency like AdResults and Performance Bridge, and what generally happens is a very human interaction: you find a good match, you negotiate, you haggle, you make a deal. In a manual marketplace like this, things can happen quite slowly. You might even say things happen inefficiently.

The impetus of things like Megaphone and Anchor Sponsorships is to attack those marketplace inefficiencies, in large part by becoming the marketplace themselves. The idea, I reckon, is to build a transactional environment that removes the various frictions of those pre-existing inefficiencies: being found, negotiating, closing. Perhaps they can cultivate environments that are attractive enough for advertisers such that the latter may end up eschewing the entire manual process in favor of hitting Megaphone or Anchor as the catch-all solution to buy into podcasting. Maybe there will be enough advertisers that end up being intentional enough to round out Megaphone and Anchor buys with direct deals, creating a buying mixes. Maybe not.

The possible success of solutions like Megaphone and Anchor has the capacity to alter the balance of power in the podcast ecosystem. The question, of course, is how.

The Cycle of Power. Two threads here. First, I’m pretty sure podcast-land is going to become way more intertwined with the legacy radio broadcast world than it is right now — and it’s not like the two universes aren’t already mingling. In August 2017, Entercom bought a 45% stake in Cadence13 (née DGital Media). Last September, the bankruptcy-fighting iHeartMedia acquired Stuff Media, the parent company of the HowStuffWorks universe. And my lizard conspiracy theory brain is going apeshit with the New York Post’s recent report that Liberty Media, the owner of SiriusXM (which moved to acquire Pandora in September) and Live Nation, is apparently interested in picking up iHeartMedia whenever the company digs itself out of its financial hole. Culture trickles from the top-down as much as it does from the bottom-up (see: civic society), and so the question of the podcast industry’s overall ownership and power over the long term is a crucial one to watch. It may well affect podcasting’s flavor.

I’ll keep the second thread short and sweet: speaking of ownership, which company is going to get acquired next? Obviously, I’d keep my eye on companies that aren’t particularly built to stay independent — which is to say, the ones that are venture-backed.

The Middle Class. As platforms, marketplaces, venture-backed entities, and conglomerates go about their business, what is the fate of publishers for whom the ideal isn’t an exit, but the opportunity to stay in the game? Is it a binary outcome: either build for acquisition, or stay niche and small? This line of inquiry, admittedly, is the one that I’ve done the least work on, but it’s one that I’d like this newsletter to scale its efforts up on.