I used to think that podcasts were a nimble, cheap, democratic alternative to radio. And maybe, once upon a time, they were. But those days are over. Podcasting has become industrialized, in quite an exciting way. It’s shaping the future of audio-only storytelling, the future of radio---and, possibly, even the future of narrative nonfiction more broadly.

The story of how we got here could be told in an episode of This American Life, the radio show that in many ways started the whole ball rolling.

Felix Salmon (@felixsalmon) is an Ideas contributor for WIRED. He hosts the Slate Money podcast and the Cause & Effect blog. Previously he was a finance blogger at Reuters and at Condé Nast Portfolio. His WIRED cover story on the Gaussian copula function was later turned into a tattoo.

Act 1, naturally, is Serial. When it was spun out of This American Life in 2014, it immediately became podcasting’s first blockbuster, recalibrating everybody’s ideas of just how big a podcast could become. Up until that point, even the biggest podcasts were pretty lo-fi affairs. Marc Maron’s hit WTF podcast, for instance, traded on rugged authenticity, charm, and a long-winded discursive style that would never find a home on NPR. Serial went a different direction. It used all the resources available to This American Life---a radio blockbuster in its own right---to create a deeply reported and expertly produced series, complete with narrative cliff-hangers worthy of Dickens. The result was a podcast that kept millions of listeners rapt across 12 episodes and some 8.5 hours of true-crime drama. Broadcast radio had not attempted anything as ambitious in decades.

While Serial was a massive critical and popular success, however, it wasn’t immediately profitable: It had to rely on This American Life to fund the first season, and it asked for listener donations to help fund the second. That was partially because it was expensive, but it was also a function of Serial’s seasonal format. Serial continues to get millions of downloads every month, and thanks to the booming podcast advertising market which appeared after the first season was first released, it was eventually able to turn a profit. But it’s hard to predict in advance how popular any given season is going to be, which makes it hard to sell ads against something that doesn’t yet exist. And once a season becomes popular, it’s almost impossible to move quickly enough to sell ads against it before it’s over.

That conundrum was solved in Act 2, where we witness—in podcast form!—the creation of Gimlet Media. Gimlet, which also has a lot of This American Life DNA, took the idea of creating highly produced podcasts and turned it into a for-profit company, complete with millions of dollars in VC funding.

Could shows like Serial be replicated on a commercial basis? The answer, it turns out, is yes. The trick is to maintain momentum and continuity: If the gap between seasons is short, and each season is reasonably similar to its predecessor, then there’s a good chance that your audience will stick with you from season to season. (Serial failed on both counts: It had a one-year gap between season one and season two, and there wasn’t much the two seasons had in common. The team’s third project, S-Town, which arrived a year after season two, was released as a stand-alone podcast rather than as season three of Serial.)

Gimlet had a lot more freedom than Serial did when it came to revenue: It could produce entire custom podcasts for advertisers; it allowed its hosts to read and produce ads; it even had a membership program. Still, there was one area that even Gimlet felt unable to take its high production values: a daily podcast.

Which brings us to Act 3: The Daily. The New York Times is a daily newspaper, so when it decided to build a flagship podcast, it pretty much had to come out daily. That was a smart financial decision: A regular show, even if it builds up slowly, has a very predictable listener base and therefore can bring in much more money from sponsors, week in and week out. The other sensible financial decision was to launch The Daily as a relatively lo-fi operation where the host, Michael Barbaro, would talk on the phone to a Times reporter about a story of the day. That was expensive, but not punishingly so.