It took less than a day for Luminary to become enemy number one of the podcast industry. Last month, on the same day that it unveiled its subscription podcast service, the company tweeted a typed-out image of a bunny holding a sign: “Podcasts don’t need ads.” Fans of the famously ad-supported industry revolted.

“This is toxic,” one person responded.

“Luminary don’t need customers,” said another.

Luminary CEO and co-founder Matt Sacks looks back on the situation now and tells me, “It was a mistake. It was a miss, and we own that. The bunny put a foot in our mouth.”

What the $100 million venture-backed podcasting company was trying to communicate, Sacks says, is that podcast listeners should have a choice: pay for subscription-based shows without ads or listen to podcasts for free but deal with ads as a price.

The New York Times and Spotify have asked Luminary to withhold their shows

“We really do feel like what we’re introducing is choice and optionality and trying to help elevate premium and paid podcasting, which would be good for creators and listeners, as well,” he says.

But the industry hasn’t accepted Luminary or its impending launch. When it rolls out to the public on iOS, Android, and the web, Luminary’s podcast app will be missing some of the industry’s biggest shows, including The New York Times’ The Daily and Gimlet Media shows like Reply All and Homecoming. Shows by Anchor’s network of smaller creators won’t be on the app, nor will series from Parcast, both of which are owned by Spotify.

By withholding their shows, the Times and Spotify are setting Luminary up to fail — or at least struggle to get off on the right foot with users. It certainly seems like the first shot fired in the inevitable premium podcast war and could destabilize one of the first buzzy, well-funded entrants before it can make a dent in the industry. The decisions that happen now will reshape the way podcasts are distributed in the future.

There are two pieces to Luminary: a podcast app, which anyone can use for free, and a network of exclusive shows, which will cost a monthly fee and only be available through the app. Both launch Tuesday, April 23rd, in the US, UK, Canada, and Australia. Through the app, listeners can access most podcasts that are distributed through publicly available RSS feeds, except for those that the big networks have asked Luminary not to include.

Luminary can be used like any other podcast player, but what the company really wants is for listeners to pay $7.99 a month to access its exclusive programming. Daily Show host Trevor Noah, Queer Eye star Karamo Brown, and Girls writer and actress Lena Dunham will all release shows, as will already established podcast stars, like Guy Raz of How I Built This, Manoush Zomorodi of Note to Self, and Adam Davidson of Planet Money. The more than 40 ad-free shows that Luminary has planned will come out on a rolling basis, and they won’t be available anywhere else but Luminary.

Other companies, like Stitcher, the BBC, and Spotify, have also made exclusive content a priority, but Luminary was the first company to structure its entire launch and marketing pitch around the idea.

Luminary has to convince listeners to pay for a traditionally free product

Its shows, combined with other networks locking down their programming, could fundamentally change the podcast industry. People who likely already pay for Netflix, Hulu, and any number of other subscription services are now being asked to start paying for podcasts, and RSS feeds, which have produced the open industry we have today, might be left behind for walled gardens.

Given the immediate backlash to Luminary’s tweet, it’s a tall order. Listeners used to hearing shows for free might not be willing to start paying for the programs that Luminary is bringing behind its paywall; other listeners won’t be able to access those shows at all because they’re outside of Luminary’s service areas.

Luminary has competition for premium podcasts, too. Spotify recently announced plans to invest up to $500 million in podcasting. The company has acquired Gimlet Media, a renowned podcasting studio; Anchor, a podcast creation app; and Parcast, a network known for crime and mystery shows. For Spotify’s monthly fee, $9.99 per month for a single person in the US, users can also listen to ad-free and unlimited music. That’s an enticing option versus Luminary’s podcast-only promise.

Still, Sacks isn’t discouraged. The podcast industry is projected to grow enormously over the coming years, and Luminary’s subscription model and premium content could be part of that. The entire industry brought in $314 million in revenue in 2017, and it’s expected to grow to $1.6 billion by 2022, according to an Interactive Advertising Bureau / PwC report.

“If we do those two things, we’re very confident that we’ll be able to find our best market.”

“We think the industry’s early,” Sacks says. “It’s been around for a bit, but it’s still early in terms of content development, and it’s a pretty new concept.”

He cites the company’s upcoming exclusive show Anthem: Homunculus, a musical podcast that stars six Tony Award winners, including actress Glenn Close, as an example of pushing the medium forward and content people would likely be willing to pay to access.

“We’re focused on building a great product experience and having great content, and if we do those two things, we’re very confident that we’ll be able to find our best market,” he says.

To date, Sacks says the entire podcasting industry has only spent $10 million on advertising, building out an audience of 62 million daily listeners. That’s a tiny figure; one movie can cost studios as much as $200 million to market. The suggestion seems to be that if Luminary spends big money marketing its own shows, the opportunity could be huge. Already, the company ran ads in Austin during South by Southwest, and billboards have gone up in Chicago and New York.

Luminary’s marketing efforts won’t just focus on its exclusive shows, but on the app experience, too. While the app is free to use, it provides Luminary with valuable listening data as well as the ability to sell users on its subscription service.

“As far as how people come in the door, it’s going to be a mix,” Sacks says. “Some people are going to come in because they heard it’s a great podcast app. Some people are going to come in because Anthem sounds really interesting, and they want to listen to it. Even for a non-premium user, once someone gets Luminary, we have a good chance of becoming your podcast player and handling all your freely available RSS feeds as well.”

The other portion of Luminary’s launch is its prized app, which acts like most any other podcast player. It most closely resembles Apple Podcasts with its curated and automatically generated charts.

When users first sign up, they’re asked to pick a few content categories that most interest them, like true crime, health, music, or pop culture, among others. Joe Purzycki, co-founder and chief strategy officer, says the team settled on these suggestions based on metadata about how people talk about podcasts and how podcasters describe their own shows. This information is then used to curate personalized show suggestions and to create an initial taste profile.

“We want to be partners of the whole ecosystem.”

Luminary wants you to be able to do just about everything from its app’s home screen, from discovering new shows to finding new episodes of podcasts you already subscribe to. The most interesting aspect of the home screen is a feature called previews, which appear as small circles, like the ones you see for Instagram Stories, that users can tap to hear a show’s trailer. Similar to how Apple and Google allow podcasters to set a trailer, Luminary does the same. The team has around 10,000 previews ready for launch.

Users will also see a carousel above those previews that features what the company deems is worth hearing at that moment. This will certainly feature a bunch of Luminary shows (when I previewed the app at home, only Luminary exclusives populated in that carousel), but Purzycki says the team will use it to highlight other shows the team enjoys.

“We want to be partners of the whole ecosystem,” Sacks adds. So when the Mueller report came out, he says, they might have placed a show that reported on it in the top carousel while also creating a separate carousel below with additional related programming.

The carousels on the page will change depending on the user, and every user will have a custom home screen that adjusts based on their interests. They might have chart suggestions like “top in technology” or “top shows.” The team tells me these top ratings come from both internal and external sources, so it’s pulling top charts and “chatter data” from around the podcast ecosystem and is especially reliant on external data at launch.

The data will help Luminary determine what premium shows to make

Comparing them to Apple’s charts shows some similarities. In top business, for example, The Dave Ramsey show is the second most popular on both. But the most popular show on Apple Podcasts is third on Luminary’s charts, as Luminary’s own listening data affects the rankings. Luminary will rely on outside sources while also drawing from its own data about listening time and user ratings of shows.

Luminary also takes other factors into account when offering up suggested programming. The company transcribes podcasts automatically and also looks for “audio similarity,” Purzycki says, which means tone, the speed at which people speak, and the subject matter. The team then tries to figure out what one show offers, what the hosts bring to a show, and how that might relate to other programming.

All of this data will ultimately help Luminary make decisions about what programming to greenlight and which creators have the potential to make a subscription-worthy show. Some of those shows will be made in-house, but Luminary could also reach out to existing podcast creators and ask them to make additional, paywalled content if it sees their show or a related genre growing in popularity.

“Our model has two different pieces to it: there’s existing shows that we’ve licensed, take Russell Brand’s podcast, for example, and then there’s original shows that partners help us create, and so this data will no question inform both of those things,” Sacks says.

Luminary’s app offers a couple of other nice features: users can “bookmark” episodes (which adds them to a playlist of sorts), set a sleep timer, and adjust preferences for automatic downloads. The app supports Bluetooth for streaming audio, but Luminary doesn’t have any third-party audio partners at launch, which means users won’t be able to listen through their Sonos speakers.

A Luminary spokesperson says the company is hopeful that it’ll soon be able to offer The Daily, citing positive conversations with the Times. It’s also in conversations with Anchor, but Luminary doesn’t appear to have made progress yet in being able to distribute Spotify’s core collection of hit series like Reply All.

In a statement to The Verge, a New York Times spokesperson said that the team is “proud of the success The Daily has had in helping new audiences develop a relationship with Times journalism and in growing our own base of subscribers, and we intend to be judicious about where it is placed.” The company will “look forward” to working with Luminary to distribute its other podcasts, and is “excited by the potential podcast audience that Luminary can attract to our others shows.”

Meanwhile, Anchor says it’s working with Luminary to come to an agreement and that if the startup begins allowing creators to submit their own RSS feeds, Anchor won’t stop them from doing so. However, Anchor says it hasn’t committed to any distribution yet because of Luminary’s ad stance.

In a statement to The Verge, Anchor co-founder Michael Mignano said the company was keeping its options open. “We’ve recently heard concerns from creators around Luminary’s very clear anti-ads stance, given that advertising is how most creators on Anchor make money,” Mignano said. “Because Luminary’s business model is new, unproven, and frankly opaque in how it plans to monetize its free tier, we are being especially cautious regarding the potential to automatically distribute Anchor creators’ content, without knowing exactly how it will affect their podcasts.”

We’ve reached out to Spotify for comment.

When asked if he really thinks people will pay for podcasting and how the company will handle competition in the space, Sacks plays the role of the rookie who’s just trying to learn from the already established all-star team.

“I really believe that podcasting has way more than enough room to go around,” Sacks says. “There will be multiple successful companies. But we look at Netflix, and we look at Spotify, we look at SiriusXM, and lots of businesses as role models, and lots of people do things very, very well. We’re learning from all of that, and then trying to apply it in a very podcast-focused way.”

Unfortunately for Sacks, Spotify’s already in the podcast world, and it isn’t playing nice.

Update 4/22, 12:40 PM ET: Updated to include New York Times statement

Correction 4/22, 2:47 PM ET: This piece initially stated that Spotify charges for its exclusive shows, but that was incorrect. Both free and paid users can access them.

Update 4/22, 6:05 PM ET: Updated to include Anchor’s statement.