Rising Budget Lines
From Lucas Shaw over at Bloomberg, out yesterday:
Amy Schumer will host and produce a comedy podcast for Spotify Technology SA, helping the paid music service attract a wider audience and challenge Apple Inc.’s dominance of this growing audio entertainment field.
The show will focus on “pop culture, politics and the world of standup comedy,” according to the company, which declined to say when it would be available. Spotify agreed to pay the comic actress more than $1 million for rights to the program, according to two people familiar with the matter who asked not to be identified because the terms are private.
The key detail here, of course, is the eye-catching $1 million+ price point for exclusive podcast rights from a Hollywood talent testing the audio waters. My initial read of the situation was a little frazzled. With this deal, we’re talking about $1 million+ to the core talent alone; actually producing the podcast includes a whole other budget scale altogether. On the one hand, it strikes me as a tremendous sum of money to invest in a podcast upfront, given (a) the medium’s overarching value narrative of being a more “cost-friendly” space to build a media product and (b) the consistent stream of complaints about tight operating budgets from the years I’ve been covering the podcast industry. The fact of life, for the longest time, was a shoe-string operation. Perhaps it’s a sign of changing times.
On the other hand, $1 million+ is still flies well under the price ranges you’d expect from the usual range of Hollywood production budgets. For some sense of scale: Schumer was reportedly paid significantly more than $11 million by Netflix for 2017’s The Leather Special. (There’s some wonkiness to this story: ~$11 million was the original deal Netflix offered to Schumer for the special. Her team reportedly went back to negotiate for significantly more money to close the gender pay gap. It’s a pretty cool story: check it out.) Which is all to say, the Schumer podcast deal is still a fraction of what you’d pay to build a streaming, television, and movie project for the comedian, and in the larger scheme of things, a less risky bet to extract value from what is still largely considered an experimental space.
For what it’s worth, I’m looking at this situation through a keyhole. A few sources active within the talent agency machination pipeline have told me that podcast deals at such prices have been emerging over the past year — which is to say: this is the first $1 million+ deal that’s out in the public, and there are almost certainly others of comparable scale that have been executed. Indeed, one source also intimated that $1 million+ is on the lower end. I don’t know; I don’t have a clear grasp on the deal sizes out there right. However, I’m taking all of this with a grain of salt. Personally, I haven’t heard anything concrete about a deal larger than this, and in any case, $1 million+, under any current circumstances, is an outstanding amount of money to pay upfront to build a podcast around a talent, Hollywood or otherwise.
Some others things to note:
- In my view, there is considerable significance to the $1 million+ number now circulating in the public: it establishes a hard contextualizing price point that will loom over any future deals that talent agencies will assemble for celebrity clients. Data points like these, floating around the informational ether, bear heavy influence.
- The angle for Spotify is pretty straightforward: Schumer is a buzzy celebrity, and they’ve been working to build out their non-music audio programming for a while now. The Bloomberg write-up further notes that the Schumer podcast will be “the first of many new comedy shows coming to Spotify” — at this point in time, I’m not super sure that the Schumer deal sits at the upper end of its machinations, for we have yet to see the full scale of Spotify’s new podcast programming initiative. But I’m pretty comfortable to assume so, at this moment anyway.
- It remains unclear to me whether the show will be produced in-house, or whether Spotify will contract an external shop to handle production, but it’s one thing to consider. Another one worth pushing: how much value and revenue are they expecting to generate from the podcast? And how will that value and revenue be generated? I’d keep an eye on any show-specific sponsorships there; my mind seems to be drifting to the way Pandora sought to build a unique ad package around its mid-2016 experiments with This American Life.
- How should we assess Spotify’s claim to an exclusives strategy? It will come down to its podcast-specific warchest. Friend of the newsletter Scott Porch, who writes about the TV business for Decider, suggested that the $1 million price tag isn’t “a big enough number to be a signal to Apple and smaller player apps that Spotify thinks it can drive the market with exclusivity.” I’m tempted to agree, but I also think we’re just at the tip of the iceberg with this exclusives business. Luminary Media’s $40 million war chest looms on the horizon, and it’s worth remembering that there’s quite bit more possible money in Spotify’s coffers if the Swedish streaming company decides that the initiative is worth further investment.
- Also: it’s probably useful to note that, as it stands, only a few players are able to embark on a pricey exclusives strategy.
- Let’s take a few steps back and consider the bigger picture. I suspect that this rising talent price tag trend is still localized at the nexus of podcasting and “higher-end” celebrity talent. But it has the potential of generating a trickle-down effect as it pertains to budget expectations and talent cost expectations. To put it another way: it’s entirely possible that what we’re seeing is the beginning of talent price inflation; whether it’s specific to a tier, or whether it gets spread across the spectrum of talent — hey, Paul Scheer’s been doing pods for a long time, shouts to Unspooled — is something we’ll have to see.
- One question I’ve been getting from readers: is this the beginning of some sort of bubble? The answer, as always, depends on whether all this cost generates positive value returns. Again, we shall see.
On a related note
While we’re talking about Hollywood, let’s briefly touch back on adaptations. I’ve spent a fair bit of digital ink writing about podcasting’s increasing activities serving as an IP-farm for Hollywood, and for quite a while, I believed, perhaps vainly, that this is a trend specific to podcasting.
It’s not, of course. If anything, it’s a singular expression of Hollywood’s much broader — and inventively expanding — appetite for harvesting IP from a wide range of digital-native, often non-traditional spaces. A few recent stories that reflect this:
- “How Wattpad is using its platform, data to sell shows to TV studios and streaming services.” (Digiday)
- “BuzzFeed News and Hulu developing feature documentary on R. Kelly.” (Axios)
- “New York Times Pacts With Anonymous Content to Represent Film and TV Rights” (Variety, from January)
Here’s my hot take on this: podcasting’s adaptation story, then, is less a story about podcasting and more — mostly — a story about Peak TV.
Quick note on Podtrac
I checked with the company: Velvet Beard, Podtrac’s VP of Products, tells me that they are not considering such an initiative.
Mumbles about Google
From a Digiday article that came out yesterday about Google’s podcast strategy, which built a sentiment piece around quotes from attendees at VoiceCon, a one-day conference on digital audio and voice from VaynerMedia that took place last week:
“Google has a podcast beast just sitting there,” said one publisher, who shared that the vast majority of their traffic comes from Apple. But they’ve been frustrated by the ad solutions and data from platforms like Spotify and iHeartRadio.
Dylan Hecklau, director of product management at programmatic ads company Jelli, said Apple’s potential inability to create a scalable ad solution has opened up a window for Google.
“Apple has never been strong in advertising whereas it is in Google’s DNA, and I wouldn’t be surprised if a podcast ad network doesn’t soon follow. Google knows how advertisers think and how to address consumers,” Hecklau said.
The desire for more podcast products from Google arises even as the tech giant, along with Facebook, continue to pull ad dollars and keep data from publishers. A publisher, who has spoken with Google about its product initiatives, said Google’s incredible reach via search and on phones is undeniable, and it’s better to work with them than against. Google, with its wealth of data, could also provide more analytics tools for publishers. Apple released podcast analytics at the end of last year.
I’d take this write-up with a grain of salt if you plan on using it a sentiment index for podcast publishers writ large. The opinions displayed in the piece are the opinions held by the kinds of reps that would go to an event like VoiceCon. That said, it does spotlight an argument I’ve heard quite consistently from conversations over the past few weeks: “it’s better to work with them [i.e. Google] than against.”
To borrow Axios’ whole gimmick, be smart:
- Some brief historical contextualization: the viewpoints primarily highlighted in the piece appear to come from the part of the podcast industry-ecosystem that argues more granular audience analytics are needed in order to properly unlock more institutional advertising dollars. Opposing this is the more traditionalist view, exemplified by independent bloggers and podcasters like John Gruber and Marco Arment, that the rudimentary analytics Apple has long provided are, in fact, enough to draw solid dollars from smart advertisers, and that the industry has been grow steadily and get by on its own.
- I’m somewhat ambivalent on the issue. In my mind, the two sides are driven by different incentives based on how their respective businesses work — which, in turn, are constructed based on their respective philosophies about users, user data, and the relationship between publishers and users. Very, very reductively: one side advocates for independent media business creation, the other pushes for scale. Personally, my own principle fixation is on revenue diversification.
- As far as the larger conversation about Apple dominance is concerned, I’d counsel pursuing the bigger picture: the set-up that best serves the publishing ecosystem isn’t one where Apple merely has a single comparable competitor to “keep it in check,” as it were, but a situation where a larger number of platforms vigorously compete against one another. In other words: a state where publishers are not bound to the policies and the often non-aligned incentives of a few platforms, but are served by an actual distribution market. This is idealistic thinking, of course. It’s more likely that we are face a future from these three scenarios: Apple prevails, Apple shares top billing with Google, or Google overtakes Apple as the primary infrastructure of podcast distribution. I haven’t seen much of anything… yet… that convinces me we’re likely to see a wide range of other platforms expanding their own listening shares in a meaningful way.
- One strategic consideration re: Google — Assuming that programmatic podcast advertising is an inevitability, it’s worth sketching out risk scenarios based on whether that portion of the podcast value chain ends up being controlled by a publisher, a distribution platform (i.e. Google or Apple), or a third-party ad tech entity.
As a side note, I thought this data point in the Digiday article is super interesting:
Out of NPR’s 12 million monthly podcast listeners, more than 60 percent came from Apple’s player as of September 2017, according to AdExchanger. That statistic is now down to more than 50 percent, an NPR spokesperson said, showing that the company’s dominance could fade.
Of course it could. Again, the key question: what would take its place?
While we’re talking platforms…
Been a busy few weeks on the platform-front, what with the Pocket Casts acquisition and the rumblings coming out of Spotify. Another thing that caught my eye: Simplecast, a relatively new podcast hosting platform based in New York, has a considerable number of job postings up, including roles in design and product support. Something’s going on in there.
Meanwhile, RadioPublic rolled out a new feature last week: Stations, which is exactly what it sounds like.
The Daily News Podcast Beat
Slate is currently on the hunt for a host to lead its own daily news podcast. The project will presumably stand apart from The Gist, the Mike Pesca-led daily afternoon show that mixes newsy spiels and more evergreen material, that Slate has been publishing since the summer of 2014.
- I think it’s time to kick off a conversation about whether the genre has started to become a little tight. The daily general news cohort now includes NPR’s Up First, NYT’s The Daily, The Outline’s World Dispatch, Vox’s Today, Explained, and ABC News’ Start Here. You could argue, then, that Slate is a little slow to the draw here, particularly if you’re suspicious about the premise that many of these podcasts are able to grow out new audiences on their own and not, say, claim listeners from a broad pool of the daily news podcast-inclined.
- On the other hand, I happen to think that Slate has a strong core following; that is, a strong Slate podcast-listening, Slate Plus-subscribing audience. This is a group that Slate has already clearly delineated as having the potential to more deeply serve and monetize. A focus on this group, then, aligns the new Slate production closer to the business architecture of The Daily and NPR: all are broader news brands with a direct revenue audience relationships, and all stand to benefit from not having their daily news podcast bear a heavy burden of generating advertising revenue.
Let’s also not forget that there is a still a great deal of opportunity to be found with the daily news podcast format as it pertains to specific niches: the recent launch of Techmeme’s “Ride Home” and the fleet of NBA podcasts pulling overtime hours to serve the current Playoff schedule stands as a testament to that. On a related note to this, Cadence13 is attempting a play of their own for the business/tech news market through a partnership with an email newsletter called MarketSnacks.
Congratulations, by the way, to The Gist for its 1000th episode.
Quick personnel change note
Public Media Marketing, the Chicago-based podcast advertising firm, has brought on two new people:
- Mike MacDonald, who will be based in the NYC branch as an account executive. MacDonald joins the company after five years at Turner, where he sold podcasts and television programming.
- Lindsay Johnson joins as a junior account executive. She was previously based in the planning/buying side at the Chicago marketing agency Cramer-Krasselt.
A quick word on these personnel change items: one of the more interesting and consistent questions I’ve received from the Hot Pod surveys is why I cover some shifts and not others. The answer to this is pretty simple — I include the ones I’m able to spot, and the ones that people send me. I list what I can, and I break it out further if I believe the development to be of actionable consequence.
So feel free to send me your moves, y’all.
- Malcolm Gladwell’s Revisionist History is now back for its third season, out weekly.
- ESPN’s 30 for 30 Podcast is now back for its third season as well. That entry is the show’s first attempt at a serialized narrative, and it was dropped in full.
- Wondery has another legacy newspaper collaboration out now: Aftermath, with USA Today. Perhaps worth remembering that USA Today has their own native podcast production in the works: The City, an investigative project led by Robin Amer, which is set to launch sometime in the fall.
- The creators of Crimetown revealed their next project at the recent Vulture Festival: The RFK Tapes, a new series that will cover “the infamous day in the Ambassador Hotel’s kitchen when Kennedy was shot by Sirhan Sirhan, the tapes that captured it, and the conspiracy theories that inevitably followed.” This project is separate and apart from the next season of Crimetown, which is scheduled to drop around the end of summer.
- Intriguingly, Night Vale Presents is launching an official Welcome to Night Vale recap show. That kicks off on June 7.
- The Atlanta Journal Constitution’s podcast, “Breakdown,” has won the Silver Gavel award from the American Bar Association, which honors “outstanding work by those who help improve comprehension of jurisprudence in the United States.”
- A fascinating critique of the New York Times’ Caliphate podcast: “Protection or Plunder? A US Journalist Took Thousands of ISIS Files Out of Iraq, Reigniting a Bitter Dispute Over the Theft of Iraqi History,” from The Intercept.
- “NBC Is Launching a Podcast Network for Select Shows.” (Vulture)
- Reese Witherspoon pushing the Oprah playbook: “Reese Witherspoon’s Hello Sunshine teams with Amazon’s Audible on audiobooks and originals.” (TechCrunch)
- Not podcast-specific, but a nice reminder of the larger universe: “Here’s who owns everything in Big Media today.” (Recode)