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Tracking: May 19, 2020

Luminary’s Hard Numbers. We finally have some concrete numbers on the paid podcast platform’s performance, courtesy of Bloomberg, and it ain’t pretty. Last Tuesday, Bloomberg reported that, before the pandemic, Luminary was spending more than $4 million per month, but is only generating under half a million dollars in revenue per month off what sources say is only about 80,000 paying subscribers.

Bleak stuff for the curious case of this strange and moneyed startup, which raised over $100 million before the app even launched. Curious still is the fact that the company is continuing to get more strange and moneyed: the Bloomberg report also states that Luminary has just raised another $30 million to ride out the pandemic-induced storm… AND that it’s seeking more funds.

The whole thing continues to feel like a Quibi in miniature, and unsurprisingly, it continues to be one of the bigger drivers of conversation in my mailbox. There were three kinds of questions that popped up the most in these messages, and I think I can get through them quickly.

Number one: did Luminary’s big pre-launch fundraise ever make sense? There’s an argument to be made, sure. I’ve spoken to a few people who’ve posited that raising a buttload of money at the outset was a necessary step if the opening gambit is to secure big names that could drive big numbers on launch day, and you can’t come close to getting any of them if you don’t already have a strong war chest in hand.

I suppose I broadly agree with this assessment, but through that framework, it would seem that Luminary’s fundamental problem is that it didn’t end up signing anybody who had a powerful enough pull to drive that many paid listeners. Sure, they’ve assembled a catalogue of interesting stuff, but they don’t have a world-building Howard Stern/Bill Simmons-level asset, plain and simple.

Of course, they also have a bunch of other problems as well, including a still barely-manageable user experience and a relationship with the broader podcast community that still needs mending. But I’m inclined to think that these are things that exacerbate the core vulnerability, as opposed to being fatal all by themselves. Going big is a high-risk proposition that leaves little room for error. And there were errors.

Number Two: Does Luminary still have a viable path forward? Sure, why not. Vanishing odds, though, and again, it comes down to securing shows with strong enough pull to make the bets pay off according to a reasonable accounting timeline.

In my opinion, the most interesting factor to watch is how the uncertain economic conditions sparked by the pandemic changes the deal-making equation for all sides. Back of the envelope math suggests that Luminary still has deal-making money in the bank — a position presumably bolstered by the fundraising, along with human trauma-inducing layoffs and other cost-cutting measures — and one could theoretically argue that while the company will be slapped hard by this economic environment, everybody else will also be slapped too. Under these conditions, it’s entirely possible that there’s a big show out there that could be amenable to cutting an exclusive deal with the startup instead of weathering the storm.

Two counter-arguments, though. First, as we’ve observed over the past few weeks, there has been some suggestion that bigger shows have been less adversely affected by the pandemic. Second, even if there was a big show out there willing to cut a deal, you also have to consider the presence of Spotify in the wings, capable of not only out-spending Luminary but also providing clear and identifiable value with its infrastructure.

I should say, there’s a quick mention in the Bloomberg report about Luminary working to “secure distribution deals with phone and media companies” as part of their effort to grow their audience and value… but I mean, come on.

Number Three: Why would anybody still put money into this thing? No idea. Listen, I am but a mere simpleton with a newsletter and a barely existent retirement account, so I cannot speak to the logic of the moneyed classes.

If I were to hazard a guess, though, I’d say it has to do with the recent changes to the Luminary C-suite. Simon Sutton, who replaced Matt Sacks as CEO last fall, and Richard Plepler, who invested in the company and joined its board shortly after, are both former HBO execs, and I reckon they continue to carry a lot of clout.

Meanwhile, two-time NBA all star Baron Davis weighed in: “Wow!! This is crazy. If we raised 30m for our media platform we would be making money. Hella money with DOPE ShOWs. How can you burn 4m on podcast network. Lawd!!!!! Who wants to invest in a winner lol.”

Tough to come back from a dunk that hard, honestly.Technicalities. Quickly flagging this webinar that’s happening in about an hour for folks interested in the really wonky stuff: “The Public Media Stack is a new report that has detailed profiles of over 100 software products used in the workflow for digital public media. We’ve analysed the products to identify key strategic, technological, ethical and financial risks for public media orgs, and published detailed analysis for every individual product.”

The webinar will be hosted by the Tow Center’s Emily Bell, and you can register for the thing here.What’s going on here? I’m still trying to wrap my head around what appears to be a saga that’s been happening over at Barstool Sports, which touches on stuff like contracts, intellectual property ownership, and the power dynamic between talent and media companies. Start with this write-up by the New York Post — which, by the way, seems to lean heavy into Barstool Sports coverage — and then hit this episode of the podcast in question, Call Her Daddy, which was also written up by the NY Post.

This general area of the podcast universe is typically not my jam, but there’s a lot in here to think through.Show Notes.

  • The Death, Sex, and Money team is kicking off a three-week financial therapy special series, featuring the financial therapist Amanda Clayman. Why yes, yes indeed.
  • This Science Magazine profile about a German podcast called Coronavirus Update, which made its virologist host a cult figure in the country, is super interesting.
  • On balance, The Last Dance was just alright, but the extended Last Dance content universe remains interesting. Quick nod to Pushin’ Thru: After The Last Dance, with BJ Armstrong and Tate Frazier.
  • Decent amount of chatter around the latest episode NPR’s Rough Translations, called Hotel Corona.