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Insider October 1, 2021 — Why is SmartLess worth more than TMZ?

Plus: Advertising to advertisers

Howdy, y’all. It’s Aria here on this fine Friday. You’re all probably off to do some spooky stuff now that it’s October, so here are some things to chew on before you head out.

Why is SmartLess worth more than TMZ?

When FOX recently acquired TMZ for $50 million, the person who broke the story — The Hollywood Reporter’s Alex Weprin — emphasized how low the price was by contrasting it with “niche podcasts selling for more money.” While I wouldn’t necessarily describe The Joe Rogan Experience, Armchair Expert, or Call Her Daddy as niche, Weprin was justified in pointing to their surprisingly high price tags: how is it that temporary rights to a single podcast are worth more than a 16-year-old institution of celebrity gossip?

SmartLess was the most recent podcast to surpass TMZ’s sale price, with Amazon agreeing to pay $20 to $26 million annually over the course of three years, according to Lucas Shaw’s reporting for Bloomberg. It’s the latest in a string of big-budget deals that picked up after Spotify paid Joe Rogan a reported $100 million in May 2020, itself a big jump from the two-year, $10 million deal between My Favorite Murder and E.W. Scripps the year before.

Why the hefty price tag for SmartLess? Advertiser enthusiasm, suggests Shaw. Even though the podcast only launched last summer, it’s hosted by Will Arnett, Jason Bateman, and Sean Hayes, who have good rapport and seem excited to be there, and the show has yet to have anything scandalous arise from its conversations. Shaw says the appeal to potential sponsors is strong.

“I think SmartLess is a very advertiser-friendly show,” Shaw tells me. “It’s three famous people just kind of yukking it up with people they like and their friends,” making it “unlikely that it would be in any way troublesome for advertisers.” 

I reached out to six SmartLess sponsors to ask why they went with the show, but none wanted to talk. Even so, one can see the appeal: while SmartLess is fawning over Fred Armisen’s contributions to SNL, TMZ is breaking the news of alleged affairs. “TMZ is a little tricky because they specialize in types of news that I would say are… difficult to monetize,” says Shaw. “Their output is not the most advertising friendly.”

The SmartLess deal gives Amazon a one-week window to publish episodes before they go up elsewhere, as well as first-look rights for future projects. Critically, it also gives Amazon full control over the show’s ad sales. That, of course, leaves Amazon the opportunity to plug any of its own products and services, but one also assumes ad spots on SmartLess will yield a pretty penny: AdvertiseCast pegs average CPM for a 30-second podcast ad at $18, while social media display ads appear to bring in less than half that per thousand impressions, and Shaw reported SmartLess as having millions of listeners at the time of the deal. That means Amazon’s bet — that big advertiser dollars will outweigh any potential losses from loss of exclusivity — might be pretty solid.

It might not actually matter that SmartLess is less scandalous than TMZ. The Joe Rogan Experience is provocative, too, and ZipRecruiter still advertises on that show, just like it does on SmartLess. Amazon invested with the idea that it could capitalize on podcasting’s hyped ad market, and, as Shaw says, “the numbers just keep going up because whoever’s shopping it wants to top the previous deal.”

“There’s a tremendous land grab going on at the moment for podcasts and content more generally — call it the Netflix effect,” says Scott Ehrlich, corporate partner and head of mergers and acquisitions at the law firm Sklar Kirsh. Ehrlich helped facilitate, among other things, SiriusXM’s acquisition of 99% Invisible Inc., a sale he says didn’t surprise him. “In that case, Sirius, they’re looking to be a one-stop shop to justify their subscription, and I say that as a guy who’s a subscriber to Sirius. I’m delighted that I’m getting more for my dollar.”

When looking at more recent deals, like between Amazon and SmartLess, he says, “I’m not sure the valuation of any of these podcasts is tied to traditional metrics.”

“Amazon’s not playing with real money these days,” he adds. “I think it’s a land grab. They’re building for the future.”

Post note: The jury’s still out on what advertisers might think of TMZ’s new podcast, which launched Wednesday. 

Then a few oddly related news bits this Friday:

There are two main ways to think about how this aligns with larger trends. The first is that it wouldn’t be unprecedented. Institutions like The Philadelphia Inquirer are already run by nonprofits, and some have converted from for-profit status on their own. If the Sun-Times reinvents itself — and therefore allows people to support it through tax-deductible donations — it’s in line with moves made by other legacy newspapers.

The second is that an audio-first company acquiring a written-word publication feels in keeping with the SmartLess story, re: the valuation of podcasts vs. print. Will audio save the day? That seemed to be the case when anonymous donors funded WNYC’s acquisition of The Gothamist instead of just, you know, giving the money right to The Gothamist; public radio stations KPCC and WAMU acquired The Gothamist’s sister sites in the deal, with the hope that the three stations could “expand their digital footprints.” I’ll be tracking the Chicago shift; if you know anything, you can reach me at

  • And again, on the topic of audio and ad revenue: the hosting and monetization platform Acast launched an ad campaign where podcasters talk about their favorite shows. The folks aren’t there to explicitly tout the ability to buy ads against said shows, but one assumes that that comes across by the execution of the campaign, which is delivered via podcast ads. How very Anchor of them.

As part of Spotify’s own push to recruit more advertisers, which Ashley mentioned on Tuesday, the company also dropped an ad… to try to sell ads. In the minute-long spot, people moving around a city drown out the ambient noise by listening to music or podcasts on Spotify, at which point they become “the most immersed audience.” The ad insists these are the people brands should be trying to reach, but I don’t know — when a person opens the app, a bubble shoots up around them and seals them off from their surroundings, and since we’re still in a pandemic, the feeling of being cut off is a little raw.

  • Less related, but in a move that makes Clubhouse feel more like podcasting, the company announced a long-awaited in-app recording feature, as Ashley reported yesterday. When the feature drops in October, creators and moderators will be able to record public rooms, and other users will have the ability to retroactively capture 30-second chunks of audio in rooms that allow it, which they’re free to share or download. Ashley points out that, paired with a forthcoming search tool, this will ostensibly “address some key issues Clubhouse has had: discovery and the desire to revisit conversations that already happened.” You know, as one can with podcasts.

We’ll be back in 93 short hours. Enjoy your weekend.