Issue 186,  published November 20, 2018

Reprocessing the Limited-Run Podcast Documentary

Here’s a weird one for the holiday week. I’ve been mulling over this topic for a while, as it’s something I’ve encountered fairly frequently in conversations for some years now, and I don’t have any particularly conclusive takeaways, so please bear with me as I process this out loud.

Let’s say you found a great story. Maybe it’s the story of a lifetime. It’s got everything: a solid hook, buckets of fantastic archival tape, living principals who are willing to talk, and a satisfying resolution that gives closure and meaning to the entire enterprise (which, really, is the rarest find of all). Let’s also say you’ve deemed this to be a story best told in five parts. It’s too complex to be a one-episode deal, or even a two-parter, but any longer and you’d be dragging feet. Rich and complicated but tightly wound: that’s the goal. You feel confident this story will kill.

But let’s also say you are, for the most part, working from scratch. You’re not part of an ongoing podcast that can serve as the staging ground for a project like this. You’re an experienced producer, but you don’t exactly have name recognition. You’re doing alright financially, but you don’t have enough capital buffer to personally stake this bet, which probably requires significant resources to get off the ground. Money, sure, but also time spent reporting, gathering tape, structuring, editing, writing, going crazy. That’s a lot of time you could have spent working another paid contract for another branded podcast or something.

It’s a tough equation. But what makes the equation infinitely tougher is the relative low ceiling of the upside for first-timers. Even if you were able to cobble together the resources to produce this thing, there’s no guarantee you’d get to adequately capture the returns should the project actually take off. In fact, your material return will almost certainly be a fraction of whatever audience you end up pulling in.

That’s because the podcast business, in its current form, isn’t particularly built to reward brand new projects that end after only five or six or ten episodes. Podcast advertising dollars tend to favor persistently-publishing shows with clear track records — which makes sense, of course, given that advertisers themselves are controlling for risk and have their own goals to hit. There may well be an emerging class of advertisers that’s willing to take those bets on limited-run projects with potential high audience upsides from new teams, but those pre-launch deals tend to be conservative. Again, that’s the risk control for the adventurous advertiser: it’s a buy-low, sell-high prospect. This state of affairs puts new producers and teams with limited-to-no track records looking to develop a limited-run series at a severe disadvantage.

Upstarts have to shoulder the entirety of their own risk when getting new projects off the ground. (This is true for creative production, but also marketing, which, in a publishing environment defined by relatively open distribution, is the significantly tougher barrier.) This is a typical condition of the creative industries, and it’s generally true across categories, but the burdens of this is unusually expressive when it comes to the limited-run podcast documentary, especially when you consider the fact that, even if such a project far exceeds initial expectations, the gains tend not to come from the immediate achievement but generally pushed down the line.

To illustrate the nature of these delayed returns, let’s turn to the case of Mailchimp and Serial’s original season. (Yes, Serial wasn’t technically an upstart, given that it was the spin-off of a highly popular radio show and podcast. But its story is the most well-documented, and the underlying learning carries over.) A great Vanity Fair write-up from September 2015 sketched this out:

It became clear that Serial’s producers had far more modest goals for their project — so modest, in fact, that they lost out on millions of dollars in unrealized revenue. “When we launched, we hoped for 300,000 downloads,” co-creator and co-producer Julie Snyder told me. So the producers sold the first season to MailChimp, an email-marketing service provider that you’d probably only know about if you listened to copious hours of podcasts. Snyder wouldn’t share the C.P.M. rate at which MailChimp agreed, but she noted that “expectations weren’t huge.” MailChimp bought Serial spots, in other words, well before Serial knew just how valuable they actually were.

Breakout hits can still extract value from their overperformance, of course, but as mentioned previously, only over the longer-term. A podcast advertising exec recently told me that, in pre-launch advertising deals, both parties try to leave a way to monetize in the event of a runaway hit. With the increasing ubiquity of dynamic ad insertion technology, there’s the potential to bring in more revenue based on the project’s ability to generate a long tail. And more importantly, overperformance increases expectations around the next project. The pre-launch advertising market eventually balanced itself out for Serial. Ahead of launching its third season earlier this fall, the show booked what may have well been the biggest pre-launch advertising deal to date, courtesy of ZipRecruiter.

But all those returns are nonetheless still generally delayed and, more pressingly, contingent. Sure, a breakout limited-run podcast documentary generates potential energy that can be parlayed for better pre-launch advertising deal terms to back the next project, which may seem like a straightforward positive on the surface, but it’s actually more complicated than that. All that potential energy translates into pressure to ensure the success of the follow-up project (which, by the way, you might not have come up with just yet), where the threat of a sophomore slump looms large. In fact, the pressure to replicate what made the first project work and quickly execute the follow-up project to capitalize on those expectations — fleeting as they may be — may exacerbate the likelihood of a sophomore slump. The end result is a situation in which follow-up projects, which are supposed to be the vessels that finally remunerate the producer, over-promises but under-delivers. That’s bad for the creator. And if it happens a lot, that’s bad for the industry.

All this makes for an industry environment that’s deeply prohibitive for the sustained growth of the limited-run podcast documentary pool. In a nutshell, the conundrum can be best expressed as: high startup risk, agonized and patchworked returns. These conditions greatly reduces the incentive for new teams to participate in and experiment with the format, and it also reduces the incentive to commit substantial investment in such projects. Which is a total bummer! Speaking personally, the limited-run podcast documentary is the format I’ve come to love and admire the most from this medium. I would love to see more of such projects from a greater variety of teams and people, but the current incentive environment doesn’t make that easy.

What I’m trying to think through are things that can reduce the risk and increase the direct returns for upstarts as it pertains to that first project. There have been a few hopeful industry development in this direction over the years, but as with all things, they come with tradeoffs.

The most obvious development is the rise of windowing as a practice, particularly as a function of existing digital audio distribution platforms, like Spotify, and premium podcast listening services, like Stitcher. In these arrangements, publishers are paid upfront for partial exclusivity behind the platforms’ respective walled gardens, which ensures that the producer will get at least something back for the work. However, one could argue that an exclusive presence on a specific platform, especially if they haven’t achieved a critical mass of engaged podcast listening users, potentially limits the maximum distributive reach of the project, which in turn undermines the generation of potential energy for better pre-launch advertising deals around future projects. On the face of it, this seems like one of those higher floor, lower ceiling scenarios for the producer. (One should also add to this a further gatekeeping factor: these platforms essentially function as curators, and their willingness to stake first-time creators comes down to their own tastes, biases, and capacities for risk.)

The magnitude of these trade-offs will likely be greater accentuated when it comes to a pure paid podcasting platform, the prospect of which is currently embodied by Luminary Media. It remains to be seen whether paid podcasting will fully take in the American market — though apparently it’s big in China — but I imagine upfront paydays, distributive reach caps, and gatekeeping dynamics are all more severe when it comes to something like Luminary.

The increased involvement of talent agencies, plus the corresponding growth of the podcast-as-IP phenomenon, is also worth noting as potential derivative revenue for limited-run podcast documentaries. But this development doesn’t particularly change the core equation: first-timers still have to shoulder the startup risk, and the benefits from this layer tend to still very much delayed and after-the-fact.

The sweet spot, I think, is to find a mechanism that’s able to assume some of the first-timers’ risk while not placing any limitations on potential natural reach — to simply raise the floor of that first limited-run documentary project without fundamentally changing the ceiling. What would that mechanism be? I have no idea. Look, as I mentioned, I’m just thinking this one through out loud. I guess what I’m saying is that podcast publishing companies should have divisions that function like venture funds. Or maybe that’s a clear way for legacy magazine companies to participate in podcasting, instead of slapping together rough audio facsimiles of a magazine. Documentary podcasts are basically features, right?

Anyway, my brain is fried. Thanks for reading.