I'm Not a Businessman, I'm a Business, Man

Read to the end for a romantic note from me to you

Jun 05, 2024

If you have never listened to Season 1 of the Startup podcast, part of me wants to tell you to stop what you’re doing and listen to it now for context, and the other part wants me to tell you to ignore it because a decade after its creation, it’s an anachronism. The season, hosted by my former boss and founder of Gimlet (the company that produced my show, Reply All) is about his attempts to get Gimlet off the ground, find investors, launch shows, manage burnout, all the things you’d expect from the story of a company trying to create what it hopes will become “The HBO of podcasts.” There are a couple episodes around Reply All itself, about joining Gimlet and making mistakes and burning out. If you listen to it now, you will both hear my voice when it sounded much younger, and you will hear a much more naive person. When Reply All started, I was 34, just out of public radio, and had no notion that anything I made would ever be a success, and I was much more willing to let the tides of the industry carry me instead of trying to forge a path for myself. And fortunately for me my timing, in that moment, was impeccable.

If you aren’t up on the history of the podcast industry — and why would you be! — that whole “HBO of podcasts thing,” well, that didn’t happen. The short version is that Spotify bought Gimlet for around $250 million in 2019, and eventually mismanaged it into nothingness. I left in 2022. A year later the company was folded into Spotify’s existent podcasts division and hundreds of people were laid off.

There are a lot of factors that make the present-day podcast landscape different, but the biggest is just the degree of fracture that has occurred in the industry. Rather than getting hired by a company to make a show, I am setting off on my own and starting my own company. I'm working with more limited resources, a radically different advertising market, a fundamentally different producing model, and I'm basically piecing everything together a la carte in order to make a functioning show. This may sound like complaining, but I swear, I’m not bitter about this. It’s really just kind of the facts on the ground. But things are starkly different. So let’s talk about the way things were vs the way things are.

2013: While we were making TLDR at WNYC, PJ and I suddenly received an offer out of the blue from Alex Blumberg, Gimlet Founder, to develop a show at his new company. Podcasting was coming into its own in this moment, and it hadn’t exactly been democratized in the way it is now. I don’t have any screenshots from 2013, but if you were to look at the top 20 on iTunes back then, it was primarily public radio shows. This American Life ruled the roost, along with a handful of other podcasts like Radiolab, etc. Importantly, some real mainstays — Serial, The Daily, My Favorite Murder, and many others — simply didn’t exist. It’s easy to field offers when there’s very little competition. Upstart production companies like Gimlet had enough money to produce everything in-house, and as of October 2014, Reply All was in production under Gimlet’s auspices.

2024: Independent podcasting companies like Gimlet have been laying people off for the past two years, which coincides with my leaving Reply All and trying to get something new off the ground. I have pitched a number of different shows (someday I’ll do a Substack of all my rejected show ideas), many of which were met with indifference, or a kind of mild interest. In spring/summer of 2023, I was told there was a contract coming, but that contract was pulled at the last minute. In November/December 2023, I was offered a full time hosting gig on a show for $250 an episode (episodes would be weekly). Smaller production companies have been bought and consolidated and closed and suffered layoffs, so the model has changed from everything being produced in-house to pitching ideas to larger podcast companies (iHeartRadio, Apple, Wondery) to get them made. Tired of pitching to the big three, I have decided to start my own company for the express purpose of producing the thing I want to make.

2014: At its start, Gimlet partners with a third party ad company to sell its ads. The industry standard was and remains that podcast ad companies keep 30% of the ad revenue, giving 70% to the creators. As the company grows, ads too are brought in-house, to the point where a sponsored content division is created. The hosts are reading the ads themselves, which is a great value proposition for advertisers, because even if the hosts don’t intend them to, host-read ads lend the advertisers an air of legitimacy. In the early days of Reply All, we were selling ads at somewhere between $50-$75 CPM. If you aren’t in the ad business that means for every 1,000 downloads we get, we are paid $50-$75 by the advertiser until their order is fulfilled.

2024: In some ways, the ad game has improved considerably. Most ad sales are only for a certain amount of downloads, so when that commitment is satisfied, there is now technology to “dynamically insert” ads into a podcast, essentially allowing podcasters to sell ads on their old podcasts indefinitely. The problem is that at the beginning of the pandemic, panicked advertisers started pulling their ads and advertising companies responded by making their CPMs cheaper. Also around the same time, a lot of larger companies found greater value in what they call “programmatic” advertising. Essentially, they sell ads across a massive number of shows, and rather than having the hosts read them, they just have VO artist read them and they get placed on every podcast. These deals can be for hundreds of thousands, if not millions of dollars, but they also drive the CPMs way down because the advertiser is essentially getting a bulk purchase discount. Like Costco. CPMs are now generally 1/3-1/2 what they were a decade ago ($25-$35). I plan to work with a third party company to once again sell host-read ads. Wish me luck. Lol.

2014: Serial is released in late October, and is an unprecedented, massive success. Dozens of companies try to recreate their success by greenlighting both true crime podcasts, and limited-run documentary series. In a way, it’s like the old record company/movie studio model — create a bunch of stuff, and the hits will supplement the less successful shows.

2024: Limited-run podcasts are now no longer being greenlit because of the lack of listeners and the lack of ad inventory. Almost every company asks for “always-on” shows, in the hopes that they can broaden and deepen their listener base and their ad inventories. Shows are also encouraged to create exclusive content so that listeners can subscribe, creating a new revenue stream outside of ads. I plan on releasing a show to the general public once every other week, and a bonus episode on a paid feed on the off weeks. I am not going to pretend the prospect of making stuff at that volume doesn’t scare me.

2014: Reply All was a team of 8 or 9, working at a company that had its own PR and media team. The show was fully funded through the company, and we were all paid salaries and given healthcare.

2024: I will be operating my new show for the first year subsidized in part by a loan from a third company. Until I can guarantee cash flow through either paywalled content or advertising, myself and one other employee will be working below market value without the luxury of health care or a 401k. I will have to work with editors and engineers on a contract basis or reach out to more established companies for editorial help until such time as I can bring some or any of that in house. It’ll be a little hand to mouth going forward, but it won’t be owned by a massive company, it’ll be owned by me. I have to worry about things like payroll and benefits and taxes and corporate compliance, but I don’t have to worry about anyone meddling editorially or with the experience the listener gets. I will have complete control over the content, with the burden of having complete control over the administrative stuff too.

All of this feels very uncharted and kinda scary. People could come back based on my work for Reply All, but could just as easily go “ya know what, I’m all set on this guy.” But it also feels pretty exciting! The potential to make something new and cool feels very exciting! Besides, my only other choice is to get back into tech support. And I don’t really even remember how to do that anymore.

Just a reminder that every Monday night at 8:30PM ET, I am reading aloud from H.G. Wells’ The War of the Worlds on Twitch. You can find some of my older episodes on my VOD page, but they delete after a couple of weeks, so if you want to catch up in the book, you can catch up here! Also, if you just like watching an idiot play video games, I’ve started doing a stream in the mornings most weekdays, @ 9:30 AM ET. twitch.tv/tuffshed

I think about you at least a thousand times a day. I can't get you off my mind. What's wrong, what's wrong, what's wrong with me.

This week’s jambox is loud and annoying. Just like me!