Let’s talk recessions. I moved to this country for college back in 2008, approximately a month before Lehman Brothers collapsed and the global financial crisis kicked into high gear, so I often feel like my feelings about this country are intimately intertwined with the specter of economic annihilation. As such, I have a doomsday prepper’s worldview on personal finance, and I suppose it’s only fair that I extend that paranoia to my actual professional work, which is writing about podcasts. (Welcome, by the way, to the newsletter, newcomers.)

Anyway, the kind of folks that professionally pay attention to this kind of stuff — from investment management companies to JP Morgan quants to a former Treasury Secretary to Chief Financial Officers across the country — speculate that there’s a pretty good chance that the next recession will happen at some point over the next two years. Even it ends up nowhere near 2008 bad (though, who the hell knows), how such an event will impact podcasting is anybody’s guess.

Let me state the obvious: podcast-land was a very different place when the last recession kicked off compared to today. In late 2007 (which many folks peg as the start of the crisis), Marc Maron was still doing his Air America show, Bill Simmons had just launched The BS Report at ESPN, Stuff You Should Know was still a twinkle in someone’s eye, and Alex Blumberg was still a This American Life staffer lurking on real estate blogs. Almost all of the companies and shows listed on the Podtrac ranker — as always, caveats here and here — didn’t exist yet. Podcast money, to the extent that it existed, was relatively tiny and mostly allocated from experimental budgets. To put it another way, relatively little of the podcast ecosystem as we now know it simply was around at that point in time.

Today, American podcast advertising revenue is projected to grow up to around $659 million by 2020, up 110% from the $314 million it captured in 2017, according to the most recent IAB podcast revenue report published last summer. That projection, I’m guessing, assumes ideal economic conditions. (Assuming ideal conditions, most of us get to live to the ripe old age of 110.)

Podcasting continues to persist under the shadow of a bubble. Part of this might have to do with the fact the industry feels so new (despite the ecosystem itself having been around for more than a decade), and because its growth over the past few years feels so quirky (maybe frothy?). We see this skepticism expressed the quick takes from generalist observers whenever there’s an industry shake-up during normal economic conditions, as was the case of last autumn’s reshufflings. (See also the embedded tweet in the first story.) The assumption, then, is that the next recession will bring cataclysm.

Crises have a way of revealing truths. Whatever happens during the next recession, whenever it happens, we’ll at least find out about the depth and existence of The Podcast Bubble. Silver linings, so on and so forth.

In the meantime, though, I’m going to run two packages. Today, I have a Q&A with Mignon Fogarty, the founder of the Quick & Dirty Tips Network, who was barely a year into the business when she had to navigate the ’08 financial crisis. For next week, I’ve been poking a wide range of inboxes to take the temperature on how different podcast people feel about how the industry will be affected by a recession. If you’d like to express an opinion on the matter, feel free to reply to this email.

Okay, here’s Mignon.

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What happened in ‘08?

When Lehman crashed in September of 2008, the Quick and Dirty Tips podcast network had 12 shows, 6 of which we had launched in the previous year. We were in a growth phase after I had partnered with Macmillan and they had launched a new QDT website. Within a couple of months, we saw a dramatic drop in the number of podcast ads we were getting.

Within a couple more months, we realized it wasn’t just a blip and we needed to cut costs. Today, we’re much more diversified, but back then, nearly all our revenue came from podcast ads. It was a hard decision, but we decided to cut the number of episodes for some of our shows.

The most lasting effect was that we stopped adding new shows for a while, and even when we started again, it was at a slower rate than we had originally planned. We were in survival mode instead of growth mode.

Next, I had always known diversification was important, but after living through 2009, we became even more focused on finding other ways to make money besides podcast ads. Macmillan has done a fabulous job turning the website into an equal source of revenue (admittedly, it’s still ad revenue, but at least it’s different ad revenue), and increasing other areas such as books and courses.

On a more subtle level, it made me more cautious. I don’t think the business would have survived if I hadn’t been partnered with a big, stable company like Macmillan, and even then it was still tough. Without them, I probably would have had to cancel all the other shows to focus on just Grammar Girl. And I’ll never forget the one quarter where I was working crazy start-up hours and made a grand total of $25. By 2011, we were briefly back up to 17 shows, but today we’re down to 11. We’re focusing on making what we have really strong instead of chasing quick growth by adding shows. I think living through the recession made me more willing to cut things that aren’t working.

What was the podcast business like at the time?

It was much smaller (obviously). On the business side, there were much fewer ad brokers and advertisers. The only big ad brokers I can remember were Blubrry and Podtrac (apologies to anyone I’m forgetting!), and it seems like it took only two or three big advertisers backing off to make a big dent in the industry.

Then, podcast advertising was viewed as even more experimental than it is today, and I think it was an easy thing for advertisers to cut quickly when they started to worry about their bottom lines. I’m hopeful that today, given that there’s more proof that podcast ads are super effective, that more advertisers would stick with it.

Also back then, there were also a lot fewer people trying to make a full-time living off podcasting — there were only a few networks — so in that sense, there were probably a lot fewer people who got hurt financially than there would be today. There were a lot fewer people responsible for other people’s jobs too. It’s one thing to be an independent podcaster and say, “OK, this isn’t working, so I need to do something else,” and it’s another thing to tell employees you have to let them go or to tell contractors you don’t have work for them anymore. I’m aware every day that people depend on me for their jobs, and I try to make sure our business is stable and resilient.

Does the prospect of another recession bug you out at all?

I do worry about it, but it seems like most companies and individuals are more diversified now than they were in 2008. For example, it seems like Patreon is a major source of revenue for many podcasters now. I wonder how solid patron support will be if we have a recession, but it seems like it could be a buffer. If you rely on patrons, you’d better make sure they feel valued! Maybe you’ll see podcasters spending even more time trying to develop a sense of community among their listeners.

I think individual podcasters would probably be fine. We’ve never taken investor money and today we’re profitable, so we could just tighten our belts and work harder, but a recession could hit companies that are new or that are highly leveraged the hardest. If a company is just starting out and ad sales are weak, the company might have trouble getting that initial foothold. And if a company needed to raise money to keep going, that could be tough in a recession.

I also wonder how a recession would hit celebrity podcasts. If ad sales are weak, networks may not be able to offer celebrities enough money to attract them to podcasting. On the other hand, maybe advertisers would be most likely to stick with shows that have big names. I have no idea! I do think a recession would have a harsher impact on podcasts that are expensive to produce, whether that’s because they have to pay a celebrity, or they have a huge production team, or they have to spend a year traveling and reporting a story.

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Thanks, Mignon.

I run this thing.