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Insider: May 21, 2020

Follow-up to Rogan/Spotify The Saga of Call Her Daddy Alternate Take on Luminary... and more!

Follow-up to Rogan/Spotify. Okay, first of all, because I didn’t link to it yet, but the Wall Street Journal seems to have the number for Spotify’s exclusive Joe Rogan deal: a “person familiar with the matter” told the Journal that it was worth more than $100 million.

Another thing to note: Spotify’s stock jumped after the Rogan news dropped on Tuesday, and continued to surge on Wednesday. If I’m not mistaken, this is the first podcast-specific development to elicit that big a response from the markets. A testament, perhaps, to Rogan’s power in the marketplace, or maybe an indication of just how many bankers are JRE listeners? I kid, but not really.

One layer to think through: as the dude Peter Kafka over at Recode notes, what’s additionally interesting about this deal is the fact that Spotify is now the exclusive home to a talent that has a history of courting controversy — which means that Spotify will have to develop a whole stance and press strategy around when the next hubbub inevitably happens. The Swedish audio streaming company has had some experience in this area before, but it’s a little different — i.e. significantly focused and concentrated — when it’s a single prominent person that will likely channel all that attention.

Alright, let’s pull back for a second. Double newsletter days are always intense, and they almost always leave me with a migraine. Also, a vague feeling of discontentment. I don’t know about other people, but whenever I’m quick-drawing to push out an emergency newsletter, I’m often sucked into a tunnel vision to a point where I don’t get to adequately feel out all the angles. Which always almost means that I come out the other end feeling like I missed the big picture.

And I probably did, because I should have more robustly flagged that, in addition to this major development being a large step forward in the Spotify vs. Apple story, it’s also a large step forward in the Spotify vs. Open Ecosystem story.

Thankfully, there’s already been some interesting discussion around that, in particular this column from Matt Stoler, who writes a newsletter about monopolies called BIG, and who previously wrote about Spotify and podcasts after The Ringer acquisition, back in February.

I’m planning to do a 30,000 ft reset column for next Tuesday’s newsletter, as a way to re-piece everything together in the wake of this change. And as always, my inbox is open for your thoughts and opinions, and if you just want to vent. I’ve already gotten a ton of messages, and I’m still trying to dig through and reply, but it’s all helpful.

We have a lot to think through.

On a related note… Found this Axios post interesting against all this: “Consumers abandon audio streaming during lockdown.” The headline overstates a little bit, I think, but the general trend is worth filing away in the back of your head. Citing eMarketer data, Axios noted that the drop in audio streaming grew from 6.2% to 9.2% in the week ending March 26 compared to a pre-pandemic eight-week baseline, while video streaming grew. More fodder for the Spotify vodcasting thing.The Saga of Call Her Daddy. I had drafted a story on this for the last Tuesday newsletter, but then I heard Taylor Lorenz over at the New York Times was working on it, so I ended up switching the story into a brief blurb. I mean, it’s Taylor, the True Bard of Teens, Influencers, and Social Media — she’s probably going to knock it out of the park.

And boy, did she. Lorenz’s write-up lays out a great beat-by-beat accounting of what went down in the dispute between Sofia Franklyn and Alexandra Cooper, the hosts of Call Her Daddy, and Barstool Sports, further contextualizing the saga within a larger shift in power dynamics between media organizations and talent that’s facilitated, in large part, by the affordances of the modern internet.

From the piece:

Media companies have long acted as talent incubators, providing content producers name-brand recognition and access to a larger audience. But, as that talent builds a following on social media, the balance of power shifts. Often, talent no longer needs the media company to operate as a middleman, and many realize they could monetize their own platforms more effectively by themselves…

… When “Call Her Daddy” started, Ms. Franklyn and Ms. Cooper were relatively unknown. Now they have about one million followers on Instagram each and wield a wide and loyal audience online. To Barstool Sports, however, they were simply employees.

“We’re entering a period where creators are business owners and media brands of their own. They can’t just be seen as employees,” said Jordi Hays, a digital strategist who works with online creators in Los Angeles. “The tools are available to them to become founders and C.E.O.s of their brand, and develop businesses with multiple powerful revenue streams like merch, ad sales and subscription revenue.”

I love the set of questions this story kicks up. At the heart is the following: What is the role of the media company — specifically, the “middle-men” media company — in the modern era? And from that, a host of others: how should those companies relate to their talent? What are their responsibilities? How should we think about the modern media company? Now that they mostly don’t have monopolies over distribution, what do they have theoretical monopolies (or, alternatively, outsized advantages) over? Monetization? Marketing? Production technology? Talent sourcing? Risk-taking?

Again, here is Taylor’s piece, go read it.

Alternate Take on Luminary. So, I don’t necessarily buy this theory, but the idea is interesting enough to take out for a spin. Andrew Rosen, who publishes a weekly analyst newsletter on digital video supply chains and runs a data analytic company called PARQOR, presented the following argument on Twitter: that Luminary’s current value should be read more as a “creative pipeline for original IP to be sold to streamers.”

A key component of this analysis would be the fact that Richard Plepler, the former HBO chief executive who is now a Luminary investor and sits on its board, recently signed a five-year deal with Apple which sees Plepler’s new production company, Eden Productions, exclusively developing and making new TV shows, documentaries, and films for the Apple TV+ service. The New York Times wrote up that development back in January.

Though Luminary just has 80,000 paid subscribers (reportedly), Rosen notes, the paid podcast platform would still be able to function on a business logic where those subscribers are effectively paying to be a focus group, as opposed to the other way around.

I mean, sure, I suppose? That’s a theory on how this could play out, and it could very well be the Hail Mary throw that’s been drawn up in the Luminary C-suite right now. I guess I’d be more inclined to believe this if we end up seeing Luminary dropping the whole vain attempt at a subscription-driven business model and go whole hog into the “We’re just a glorified prototype dispenser” model, which, frankly, is a model we’re already seeing with podcast publishers like QCODE. Why max out on 80,000 focus group subjects capped by a paywall when you can hit more people — and effectively develop pre-marketing buzz for the film/television adaptation or whatever — in the broader podcast ecosystem? So you can gather proprietary and potentially more granular data on the 80,000 surveilled within Luminary’s stack? Ehhhhhh.

So, I’m willing to concede that maybe my capacity for analysis is prohibitively hampered by the fact that I’m unable to effectively grok the decision-making/risk-assessment pathways of those for whom cash flows freely and voluminously — I’m a stingy, cautious bitch — but this IP generator-first approach strikes me as too risky a business model to swap into as your primary value-creating engine. It’s just too wobbly an engine, especially for something that has already had $100 million sunk into it, plus $30 million more.

But I guess, if you were in Luminary’s shoes, what else are you supposed to do? Throw more money at talent? At marketing?

On a related note… Got the press release yesterday: ThreeUncannyFour’s The Passion Economy, which was one of the first exclusives touted by Luminary, has now been made available outside of the paywall.

Alternate Take on Luminary. So, I don’t necessarily buy this theory, but the idea is interesting enough to take out for a spin. Andrew Rosen, who publishes a weekly analyst newsletter on digital video supply chains and runs a data analytic company called PARQOR, presented the following argument on Twitter: that Luminary’s current value should be read more as a “creative pipeline for original IP to be sold to streamers.”

A key component of this analysis would be the fact that Richard Plepler, the former HBO chief executive who is now a Luminary investor and sits on its board, recently signed a five-year deal with Apple which sees Plepler’s new production company, Eden Productions, exclusively developing and making new TV shows, documentaries, and films for the Apple TV+ service. The New York Times wrote up that development back in January.

Though Luminary just has 80,000 paid subscribers (reportedly), Rosen notes, the paid podcast platform would still be able to function on a business logic where those subscribers are effectively paying to be a focus group, as opposed to the other way around.

I mean, sure, I suppose? That’s a theory on how this could play out, and it could very well be the Hail Mary throw that’s been drawn up in the Luminary C-suite right now. I guess I’d be more inclined to believe this if we end up seeing Luminary dropping the whole vain attempt at a subscription-driven business model and go whole hog into the “We’re just a glorified prototype dispenser” model, which, frankly, is a model we’re already seeing with podcast publishers like QCODE. Why max out on 80,000 focus group subjects capped by a paywall when you can hit more people — and effectively develop pre-marketing buzz for the film/television adaptation or whatever — in the broader podcast ecosystem? So you can gather proprietary and potentially more granular data on the 80,000 surveilled within Luminary’s stack? Ehhhhhh.

So, I’m willing to concede that maybe my capacity for analysis is prohibitively hampered by the fact that I’m unable to effectively grok the decision-making/risk-assessment pathways of those for whom cash flows freely and voluminously — I’m a stingy, cautious bitch — but this IP generator-first approach strikes me as too risky a business model to swap into as your primary value-creating engine. It’s just too wobbly an engine, especially for something that has already had $100 million sunk into it, plus $30 million more.

But I guess, if you were in Luminary’s shoes, what else are you supposed to do? Throw more money at talent? At marketing?

On a related note… Got the press release yesterday: ThreeUncannyFour’s The Passion Economy, which was one of the first exclusives touted by Luminary, has now been made available outside of the paywall.

Alternate Take on Luminary. So, I don’t necessarily buy this theory, but the idea is interesting enough to take out for a spin. Andrew Rosen, who publishes a weekly analyst newsletter on digital video supply chains and runs a data analytic company called PARQOR, presented the following argument on Twitter: that Luminary’s current value should be read more as a “creative pipeline for original IP to be sold to streamers.”

A key component of this analysis would be the fact that Richard Plepler, the former HBO chief executive who is now a Luminary investor and sits on its board, recently signed a five-year deal with Apple which sees Plepler’s new production company, Eden Productions, exclusively developing and making new TV shows, documentaries, and films for the Apple TV+ service. The New York Times wrote up that development back in January.

Though Luminary just has 80,000 paid subscribers (reportedly), Rosen notes, the paid podcast platform would still be able to function on a business logic where those subscribers are effectively paying to be a focus group, as opposed to the other way around.

I mean, sure, I suppose? That’s a theory on how this could play out, and it could very well be the Hail Mary throw that’s been drawn up in the Luminary C-suite right now. I guess I’d be more inclined to believe this if we end up seeing Luminary dropping the whole vain attempt at a subscription-driven business model and go whole hog into the “We’re just a glorified prototype dispenser” model, which, frankly, is a model we’re already seeing with podcast publishers like QCODE. Why max out on 80,000 focus group subjects capped by a paywall when you can hit more people — and effectively develop pre-marketing buzz for the film/television adaptation or whatever — in the broader podcast ecosystem? So you can gather proprietary and potentially more granular data on the 80,000 surveilled within Luminary’s stack? Ehhhhhh.

So, I’m willing to concede that maybe my capacity for analysis is prohibitively hampered by the fact that I’m unable to effectively grok the decision-making/risk-assessment pathways of those for whom cash flows freely and voluminously — I’m a stingy, cautious bitch — but this IP generator-first approach strikes me as too risky a business model to swap into as your primary value-creating engine. It’s just too wobbly an engine, especially for something that has already had $100 million sunk into it, plus $30 million more.

But I guess, if you were in Luminary’s shoes, what else are you supposed to do? Throw more money at talent? At marketing?

On a related note… Got the press release yesterday: ThreeUncannyFour’s The Passion Economy, which was one of the first exclusives touted by Luminary, has now been made available outside of the paywall.

In case you’re wondering… For those curious about the latest in Wondery CEO Hernan Lopez’s on-going legal battle related to the FIFA bribery, here’s an update from the legal news site Law360:

Brooklyn prosecutors hit back hard on Friday against a former 21st Century Fox marketing executive’s bid to dismiss the soccer-related bribery charges against him by arguing that a grand jury may not have reached a quorum when it indicted him, calling the suggestion “absurd,” “nonsensical” and “frivolous.”

In response to ex-Fox Sports official Hernan Lopez’s Wednesday motion to dismiss, the government flatly rejected his speculation that coronavirus restrictions may have prevented the grand jury from reaching a quorum when it approved the 53-count superseding indictment targeting him and others.

Yiiikes. You can read the whole piece here. Law360 is a subscription news site, by the way, but it seems to be making some articles free throughout the coronavirus pandemic.

Again, just so we’re clear: this is a bonkers story. For what it’s worth, whenever I bring it up during my chats with other podcast execs, the broad sentiment seems to be a general befuddlement that Lopez hasn’t stepped down as Wondery CEO yet. A weird, weird sideplot in what is already a weird, weird time.Public Radio Watch.

(1) Chicago Public Media finally has a new CEO: Andi McDaniel, formerly the chief content officer of WAMU, the NPR-affiliate that serves the DC area. McDaniel will be filling up the seat left open by Goli Sheikholeslami, who left the Chicago station last year to become the new chief executive of WNYC. Here’s the official announcement.

(2) NPR has received a $4.7 million grant from Eric and Wendy Schmidt to create two new regional newsrooms — one serving California, and one serving as a Midwest hub, tying together stations in Kansas, Iowa, Missouri, and Nebraska — under the Collaborative Journalism Network. Eric Schmidt, in case you didn’t know, is the former chief executive of Google. Here’s the official announcement post.