Welcome to Hot Pod, a newsletter about podcasts. This is issue 193, published January 29, 2019.

Yesterday, The Wall Street Journal published a story that offers some insight into the podcast business over at The Ringer , the digital media operation Bill Simmons founded three years ago. Its podcasting health is something I’ve been wondering about for a while now — partly because their output makes up a disproportionate amount of my own personal listening, but mostly because I just find their rapid, iterative, enthusiasm-driven approach to podcast production compelling. In 2017, I called them one of the most interesting companies in podcasting due to their embrace of the fact that it “isn’t for everybody, but when it’s yours, it’s really, really yours.”

From the sounds of the Journal report, headlined “For Bill Simmons’ The Ringer, Podcasting is the Main Event,” things are looking pretty good.

Not to strip-mine the report (written by Ben Mullin and Joe Flint), but here are the key details as I see it: The Ringer’s podcast ad sales topped $15 million in 2018 (and accounted for most of its revenue); its podcast network brings in around 35 million downloads across 28 shows; Simmons says the company is profitable. Headcount is apparently expected to grow up to 100 this year, and company leadership appears to be eschewing outside funding — particularly venture capital — to power further growth. (It should be noted, though, that HBO bought a 10 percent stake in The Ringer at the start of the business.) And for the curious: Midroll Media is responsible for ad sales, and The Ringer is thought to pocket more than two-thirds of podcast revenues once Midroll takes its cut.

I don’t think you can really tell the full story of The Ringer’s podcast business without talking about the nature of its output. It’s almost entirely conversational programming, which generally allows for higher publishing volumes — and therefore, more ad slots — and at a lower cost compared to resource-intensive, seasonally structured, often limited-run narrative shows. That said, a high-volume approach doesn’t really matter if it doesn’t actually string together a listenership, and so it’s worth recognizing the importance of The Bill Simmons Podcast, which (if you count its predecessor The BS Report) has been cultivating an audience for almost a decade now. The show anchors the network and presumably functions as a crucial stabilizing force, brand leader, and podcast marketing platform. (After all, the best way to promote podcasts is still through other podcasts.)

Not that you can chalk up The Ringer’s podcast success purely to its publishing structure. Credit should also be given to the meat-and-potatoes of assembling a staff of writers who can also function well on the mic, some amount of taste, and the fact that, as previously mentioned, the company experiments and iterates very, very quickly. (Having a seasoned chief operating officer also helps.)

It’s worth noting that The Ringer isn’t the only digital media company that looks the way it does. (It’s not an entirely unique creature.) Its spiritual sibling is Crooked Media, the politically oriented digital media company that also features a podcast network as its central offering. (Longtime observers will recall that there is history here: The Ringer gave Crooked Media’s main hosts their podcasting starts with Keepin’ It 1600, the predecessor to Pod Save America.)

According to a Vanity Fair writeup from last summer, Crooked Media’s 10-podcast-strong network is thought to comfortably book eight-figure revenues, which put it around the same territory as The Ringer, albeit off a smaller portfolio. That network is also anchored by a dominant show, the aforementioned Pod Save America, which averages about 1.5 million listeners per episode, according to The New York Times, and brings in about $5 million per year by itself, according to an estimate by The Guardian.

Like The Ringer, Crooked Media also appears to have generally abstained from investment in order to maintain its independence, relying on generated podcast revenues to further the business. “We want to do stuff with this company that will have a political benefit, that might not have any financial benefit,” co-founder Tommy Vietor told Recode. “Explaining that to someone if you’re part of a broader organization would be difficult.”

So what, exactly, are the lessons to take away from this Crooked–Ringer dyad? Is it possible to find some replicable blueprint for new podcast operations? I’m not sure. I have a feeling that Crooked–Ringer might actually have more to say about the theory of the personality-driven media company — previously incarnated as the “star journalist-driven media company” trend of 2014, à la Ezra Klein and Nate Silver — than it does about the podcast business in general.

That said, we could also frame the question as: Could The Ringer and Crooked Media have reached where they are today — which is to say, a relatively modest business that allows for creative flexibility, independence, and expression — through the strength of any other medium? I’m inclined to say no, but in the spirit of a segment on The Rewatchables, that’s probably an unanswerable question.

Something that might be more answerable, though, is this:

You see "digital media business model that works."

I have a hard time not seeing "bubble that just hasn't burst yet." https://t.co/AsH4YpudqX — Will Oremus (@WillOremus) January 28, 2019

We’ll get to that in a bit. But first, let’s run the other stuff.

Getting paid [by Caroline Crampton]. Werk It, the women’s podcast festival in New York run by WNYC Studios, is launching a pay survey aimed at the U.S. podcast industry. They’re seeking feedback from all podcasters of all genders working in the U.S. (or being paid in U.S. dollars) about levels of pay and experience. The survey, which is confidential and anonymous, is looking for responses from all kinds of audio roles, from administrative to technical production to on-air talent and more. As well as the industry questions, there’s an optional demographics section, presumably to help measure gender and race pay gaps. If you’d like to take part, click here to read the information and get started.

“A pickle jar of listener malcontent” [by Caroline Crampton]. Fortunately…with Fi and Jane, a BBC podcast with a loyal and vocal listenership, has been dealing lately with some fallout from a new windowing strategy that moved the show into the BBC Sounds app exclusively for the start of 2019. New content isn’t being uploaded to the show’s original open podcast feed, with audiences being directed to the app to hear the latest episodes.

It’s the first BBC show with a pre-existing following to switch to this limited distribution model — that I’m aware of, anyway — although there are some podcasts being debuted inside the app before getting a wider release.

In case you need a refresher: The BBC Sounds app was the corporation’s biggest product release in a decade, intended to unite BBC radio, podcast, and music content in a centralized digital hub. The project has had a tricky gestation period; insiders said that, at launch, it suffered from a confused and vague notion of what it was actually supposed to deliver. That hasn’t been made much clearer now that it’s been out of beta for three months. Today the app mostly consists of BBC content — radio catch-up offerings, music mixes, and podcasts also available elsewhere — but also a handful of non-BBC podcast offerings. In other words, it’s neither a universal podcatcher nor a walled garden of exclusive shows.

I don’t have any concrete data on this (no numbers have been forthcoming, and all we’ve pretty much gotten is an “everything is going great!” post back in November), but based on this new windowing strategy, I suspect this lack of focus has translated into a lower-than-expected number of users in the app. A source told BuzzFeed last year that the main plan was to move everyone over to BBC Sounds from its predecessor app, iPlayer Radio, within the first six months, and then use it to start attracting younger listeners (who are currently quite disengaged from BBC radio stations) back to the Beeb. Making a popular podcast like Fortunately only available via the app is apparently an attempt to speed up this process.

This podcast is a behind-the-scenes look at broadcasting and media, publishing around 80 episodes since launching in March 2017. Its hosts are veteran BBC Radio 4 presenters; Jane Garvey presents the venerable Women’s Hour, while Fi Glover fronts the mass observation strand The Listening Project. Their podcast is informal and good-humored, with a relaxed interview style that contrasts nicely with more formal and traditional BBC slots.

The decision to start releasing new episodes only in the BBC Sounds app was announced to listeners January 11 via a minute-long update dropped into the existing podcast feed. That update, titled “Fortunately returns! Find us exclusively on BBC Sounds,” seems to have since been deleted, but it was essentially a light-hearted riff from the hosts on the change. Some listeners weren’t excited about the change, at least judging by feedback on social media. The BBC Sounds app is not available to download outside the U.K., so international listeners thought they were cut off. Also, the app isn’t available on older operating systems and has been getting mixed reviews on app stores. The BBC countered this in a recent statement, saying “the response to BBC Sounds has been overwhelmingly positive with over three quarters rating it as excellent or very good in independent research.” In general, there’s just quite a bit of confusion surrounding the entire business.

Discontent to Fortunately’s exclusivity grew to such a level that it prompted a response on the show itself. On its first full episode of 2019, published January 18, the hosts tackled it upfront: “We have been in a pickle jar of listener malcontent,” they said. “Lots of people have found it difficult to use or completely inaccessible to them, and have got really annoyed.” The first guest on the episode was BBC Sounds launch director Charlotte Lock, and she spoke to listeners directly about the move.

Lock made a few points about the Sounds strategy that confirmed some hunches I’ve had about the situation. The podcast isn’t permanently paywalled, Lock noted. “We’re just seeing what will happen,” she said, by taking it off other podcast platforms. After a limited but as yet undefined period, it will go back into other podcatchers. Listeners outside the U.K. can’t get the BBC Sounds app, she explained, but they can still get the show through its internationally available predecessor, iPlayer Radio, or on the BBC website. Understandably, the BBC doesn’t want to heavily promote the fact that the old app still works, with arguably better functionality and more content, but…it does. Also, even after the explanation, some non-U.K. listeners expressed frustration that they now have to stream the show through a browser, making it harder to listen to while driving, for instance.

Lock made it clear that this move was all about driving more people towards the BBC Sounds app and acquiring more data on what they choose to listen to once they’re there. The app is supposed to provide tailored recommendations based on listening habits, so they need more users in order to improve it. I found the fact that she pushed this enhanced data-capture reasoning; corporations aren’t usually so transparent about why they want your eyeballs (or earballs, as it were). I should imagine for some users (particularly certain portions of the podcasting die-hards), knowing that the BBC is recording and using your preferences is a downside, not a benefit.

Anyway, Fortunately will eventually come out from behind the Sounds barrier, and its listeners will probably simmer down or find a new show. For now, there are two ways to look at this kerfuffle: the first for what the BBC can learn, and the second for what the wider industry can take from it.

For the BBC, I’d say the biggest takeaway should be about expectations and signposting. Podcast listeners can be very loyal and engaged, but they are also creators of habit, so any attempt to shift their usage patterns requires warning and help. Perhaps if the “limited” windowing period for Fortunately had been stated, or if there’d been better information available from the start (a more detailed FAQ has now been published, Lock said, although when you search for the show you pull up a few different BBC show pages that don’t link to it), or if international listeners had had more signposting to the places where they can still listen (there were no links in the description of the announcement, for instance), there wouldn’t have been such an outcry. Just a glib “we’re moving!” probably isn’t sufficient if you want to keep everyone’s goodwill.

The wider industry should take note, because I doubt the BBC will be the only organization to experiment with windowing and paywalls and exclusives in 2019. As more consolidation occurs and revenue streams other than sponsorship are sought, there will be lots of people grappling with the problem of moving an audience. I think it can be managed better than in this case, but to do it well, it’s vital to know what it is you’re actually trying to achieve and to act with those specific goals in mind. A paywalled app containing shows aimed at a small but highly engaged segment of an audience has a good chance of success, but it’ll be more difficult to rack up big numbers when you put technological hurdles in people’s way. Experimenting in this area is high stakes, especially when done with an existing show. You might gain a partial insight into what listeners do and don’t want, but you risk shrinking your audience as you do so.

The last time. Let’s talk recessions. I moved to this country for college back in 2008, about 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 — say there’s a pretty good chance of a recession 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. Nearly 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. Not much of the podcast ecosystem we know today was around.

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

Podcasting continues to live under the shadow of a bubble. Part of that has to do with how the industry still feels new (despite the ecosystem itself having been around for more than a decade) and how its recent growth still feels so quirky. (Maybe frothy?) You can see this skepticism in the quick takes from generalist observers whenever there’s an industry shakeup, even during normal economic conditions, as was the case of last autumn’s reshufflings. (See also that tweet above.) 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 finally confirm 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, founder of the Quick and Dirty Tips Network, who was barely a year into the business when she had to navigate the 2008 financial crisis. 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 drop me a line.

Hot Pod: So what happened in 2008?

Mignon Fogarty: When Lehman crashed in September, the Quick and Dirty Tips podcast network had 12 shows, six of which we had launched in the previous year. We were in a growth phase after I had : When Lehman crashed in September, the Quick and Dirty Tips podcast network had 12 shows, six 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. 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 startup 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.

Hot Pod: What was the podcast business like at the time?

Fogarty: 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. : 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, 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, “Okay, 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.

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

Fogarty: 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 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.

Tracking

This time last year. To refresh: I’m copping this new feature from the very smart Ali Griswold, who writes a damn good newsletter on the sharing economy called Oversharing, where we go over the headlines from this point last year.