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Alison Stewart: This is All Of It on WNYC. I'm Alison Stewart. The future of audio consumption is complicated. For example, in the world of podcasts, Spotify announced another round of layoffs. 200 employees, mostly from its podcast department, gutting the once popular production studio Gimlet Media, NPR cut 10% of its staff, including the cancellation of four podcasts. While the New York Times unveiled the new app, New York Times Audio, whatever that is.

It's safe to say the podcast industry is just in a weird place. Gone are the days of major narrative projects like Serial. As Vulture podcast critic Nick Quah writes in his 1.5x Speed newsletter, as a business, podcasting has become static and conservative, a Walmart of people talking. As art, podcasts are not being served and thus cannot serve. At the same time, Quah said it's not that simple.

There are signs to be cautiously optimistic about podcasts and innovative audio storytelling. He joins me now for a check-in on the podcast industry and take some calls to learn more about your listening habits. Hi, Nick.

Nick Quah: Afternoon.

Alison Stewart: Listeners, we want to hear from you. What is your relationship to podcast these days? How many would you say you listen to in a day or in a week? What kind of format do you listen to? Are you into the news podcast, the pop culture talk shows, narrative-driven podcast? 212-433-9692. 212-433-WNYC. That is our phone number. You can text us on that number as well.

Have your listening habits changed in the last few years? How do you find podcasts? What kind of podcasts do you want to see being made? 212-433-WNYC, 212-433-9692. You can call in or you can text to us about podcasts. All right, so beyond the obvious financial issues facing podcasts, because it's facing all of media honestly, why has the financial reality of the podcast industry started to shift and falter in some cases?

Nick Quah: What's required here is a broader context of what's been happening over the past couple years. Over the past couple years, there's been this what's now called the modern podcast boom in which several major companies, primarily from other industries, but we're mostly, at this point, talking about Spotify which, at the time, was just a music streaming platform.

They're trying to diversify into something bigger than music streaming platform, and so they went whole hog head first into investing a tremendous amount of money, I believe it crossed over the billion-dollar market a year or two years ago, into this category with the bet that they're going to take over this space in some form or the other. Today they have functionally built out quite a robust packets business. It just does not look like it was what they thought it was going to be when they first started investing in this space.

A lot of the bets that they place didn't work out, only some did, in the nature of how gambling works, I guess. If you want to split 50/50, the stuff that worked for them is working today. It's stuff that sounds a lot like traditional radio. Like The Joe Rogan Show or Call Her Daddy with Alex Cooper. Talking heads persistently publishing endless number of episodes kind of shows.

Whereas the narrative stuff, they didn't quite figure out the business model for that in a robust way that matches with their expectations and their pace. That is the ripple effect that we see in the downturn for the rest of the industry following the advertising declines. I should also note the other layouts, wherever they happen, every company comes from a different industry, so they are also indexed to the problems of that industry.

NPR's cutting and layoffs has everything to do with their own personal decline as an institution in terms of their advertising revenue that you're on a budget shortfall. They made the bet to double down on their core competencies, which required cutting a couple of things that were just podcasts. It's a complex picture. However, the other side of this is the fact that a lot of the other secular indicators are going up.

Podcast listening is going up. The advertising estimates in general is projected to continue growing even though it might be a bit shaky over the next one or two-quarters, years maybe. The larger shift is there. It's like the little tick in the stock market ticker if you look at it like a graph.

Alison Stewart: I read several articles about this, and the two words that I walked away with, and I want to get your take on, dumb money. When people--

Nick Quah: I believe that's an Eric Nuzum quote. A former NPR executive.

Alison Stewart: Dumb money. That there's dumb money in podcasting. What does that mean?

Nick Quah: Dumb money, obviously, is pejorative concept. It just specifically refers to the speculative nature of a lot of this voluminous investment that we saw over the past couple of years. Money that went into building out divisions, teams, projects, and shows that didn't quite have a clear path to revenue or it didn't quite have a clear thesis in the market.

For the past couple of years, I think it, again, this is media specifically, but also the investment in tech world more broadly, just lived through an era of cheap capital. A lot of really fast investments at low dollars. That encouraged a kind of one, in hindsight, could say reckless spending in terms of investing, building out things that there was no clear path for.

These days with the shakeout, a thing that I've begun hearing from a number of different people at different layers, not just executives but some creatives in better positions, is that this was always going to happen. It was a correction. We were going to see the stuff that wasn't going to stick around not stick around. Some people would say, I don't necessarily think I agree this, is that if that happens now, then further down the line.

Once again, it's a very complex picture. People did lose their jobs, but these things is a natural part of the business cycle.

Alison Stewart: When you think about the kind of money that Spotify was willing to spend. Harry and Meghan had a $25 million deal. That deal has faltered. First of all, how can these companies eat those kind of losses and sustain themselves? Why did the industry, for a while, really think that big-name celebrities were the way to go? The Michelle Obamas, the Harry and Meghans?

Nick Quah: To answer your first question, you got to take that up with their respective chief revenue officers. I'm sure they figured out how their speculative accounting works there. In terms of the celebrity deal, you can see the very fundamental capitalist market logic behind it. X figure is famous, therefore they have a certain amount of baked-in audience. Give them a thing and, hopefully, big question mark, question mark equals money.

With respect to the big celebrity deals, there wasn't a feeling at the beginning of the boom where there was an arms race. That because we're talking about really big tech companies, primarily tech companies, and other major media companies trying to establish themselves in a podcast space, it became like a, "I can top higher, I can top higher," in terms of getting a deal that will end all deals. There was just this mentality in arms race mode that everybody was operating on.

The sure bet, at least people thought about, was people who were already famous as opposed to investing in shows for the long term. A lot of these companies are driven by short-term incentives. Celebrities were there. They were happy to do the [chuckles] work, I guess. Well, but what they learned over this past couple of months, as we come to the end of this era of celebrity deals, is that just because you're famous it doesn't mean that you're good behind a mike.

Which I'm sure you know this very well. It's very hard work to deliver this every day or a lot. The ones that did stick around, I mean, there are success stories of celebrity podcast deals. SmartLess, perhaps, is the biggest one, the Jason Bateman, Sean Hayes, Will Arnett kind of talk show I guess. I think the lesson with that particular show is that they actually did put in the work.

I don't like the show. I find it extremely overindulgent and extremely boring, but people love that show because people love hard work and famous people. I think that's part of it. It's also a bit of a major learning curve as we get out of this not particularly thought-out celebrity deal era.

Alison Stewart: Let's take a call. Margaret is calling in from Montclair. Hey, Margaret, thanks for calling All Of It.

Margaret: Hey, thank you for having me. I was listening to the promo for this, and I really wanted to listen because I thought, "It's like a George Costanza thing where I think it's like, it's not you, it's me." I thought that I was just losing interest in podcasts. I was addicted to them. Serial or in the Golden Age. I trained for marathons listening to even just criminal stuff. Lately, I find myself, with my insomnia, looking through and paging through and nothing interests me anymore.

I thought it was me. I was so interested to hear that things are shaking up and that-- Is it that I'm like everybody else that we're losing interest and moving on or is something changing in podcasting where it's no longer what it was?

Alison Stewart: Margaret, thank you for calling in. Nick, do you want to address Margaret's thoughts?

Nick Quah: Personally, as a critic who consumes these stuff professionally, I have felt that way too, and I know a lot of people feel the same way. I think it does tie into this outcome of the boom over the past couple of years in which just a lot of stuff got made and, perhaps, a lot of stuff got made with speed on their minds who have not a ton of care and actual thought in terms of producing something that is genuinely innovative or interesting or catered to a specific need or niche that has not been catered to before.

The flip side out is that a lot of these things do exist. There are stuff that might be really good for you or stuff that might really hook you. It's also being drowned out by a lot of other stuff. This often ties into something that a lot of people in the ecosystem and the business talk about which is this problem of discoverability. There is just so much stuff. How do you navigate it? I'm sure you feel similar things watching television and pulling up Netflix and going, "You know, I just need something that's hitting and I don't know where to start looking for the things that are going to hit." My quick answer to that is that you should go to vulture.com and read up all the critics including myself.

Alison Stewart: Agreed.

Nick Quah: The larger macro culture structure here is that the kinds of projects that once felt like a middle, the center of culture, produced out of podcasting, that feels like it's not happening as much for a number of varying reasons but also because just the rush of everybody trying to muscle into some form of market dominance. It has produced a lack of creativity. That's my feeling of it. I'm sure there's a lot of creatives that will not agree with this but this is my interpretation of the current state of play.

Alison Stewart: Someone texted to us, "I consume podcasts mostly through YouTube making me what the It's Always Sunny podcast calls a creep. In a podcast, all I look for is good conversation between interesting people." That is from Theo. What about this idea about people watching podcasts on YouTube? Is that the future?

Nick Quah: It's actually really interesting. The phenomenon of people distributing podcasts over YouTube stems back to the earliest forms of podcasting which was both video podcasting and audio podcasting. I think the boom had generated this feeling around the medium in which that it's primarily an extension and evolution of radio. The talk show format, talk show model, we even think back to sports talk radio.

There are certain sports talk radio programs that gets broadcasted as a show on ESPN3. Dan Le Batard for example or something like that. That mode got the same unlocking, like shift that podcasting did for linear radio in which you can consume it however you want it on the internet on demand and on your own terms, but it's also subject to the similar economic dynamics. Like, can we make money off this thing? We don't quite know.

Spotify right now is pushing really hard into video podcasting. They, essentially, want to be in YouTube even though YouTube is right there. I should admit, I also watch a lot of or consume a lot of podcasts through YouTube. It's primarily chat stuff. What video podcasting doesn't really serve is stuff that's not conversational. Narrative podcasts. I think the category that some would call it call radio art, that doesn't get really served very well in a mass distribution platform that's permanently on video. There's a tension, I think, in the ecosystem right now between this the future radio versus the future of this YouTube-y thing.

Alison Stewart: All right. In our last few minutes, what would you recommend? Margaret wants to know.

Nick Quah: All right, I'll give you three things. First of all, the Serial production is still around. They have a new show coming out, I believe, next week or over the next two weeks called The Retrievals. Susan Burton's investigation into an incident at the Yale Fertility Clinic that happened a couple of years ago in which a nurse was caught swapping out painkillers with saline.

It's fundamentally, or so I've heard,- I haven't heard the previews yet. -a story about the way that women's pain is treated institutionally and structurally, or the lack thereof of that treatment. That's one. That's called The Retrievals. The other one I'm paying attention to, it's a show called Classy with Jonathan Menjivar. It's a show by some of the fine folks over at Pineapple Studios.

Jonathan Menjivar, long-time public radio producer now podcast producer, is staging a series of conversations tackling the concept of class in America pretty head-on. He wants to stir into that squishy word feeling that I feel a lot of Americans have when they talk about when they have money, when they don't have money, wanting money. All these complicated feelings that maybe you feel that he really wants to get into.

Just the last one, I just want to shout out my guy John Caramanica. He does The New York Times music podcast, which is actually the best New York Times podcast. It's not The Daily. I really do think it's the New York Times podcast. Smart, fascinating conversations about music. I feel so out of the loop with what's going on in the music world and Caramanica, what a talker, what a guy, so I just want to shout that show out.

Alison Stewart: With just a few seconds left. I didn't mean to say-- I fear that I sounded far snottier than I meant to about the New York Times audio app, because I know those folks-

Nick Quah: Sure.

Alison Stewart: -work really, really hard. How do you describe it?

Nick Quah: I described as a big question mark. They released this audio app that's supposed to be a portal to all of their growing audio content, that New York Times audio division made. I think I see where they're going with this. I think there is a market of super fans who really, really love New York Times audio, and they want to get an easy place to listen to it all, but it's kind of I find the app a little hard for me to be top of mind to pull it up because I already have The Daily and a bunch of the New York Times podcast loaded on my podcast app.

I think the big question is, why switch over to this? Hopefully, they figure out a genuine answer to that question because a stronger New York Times audio app is probably a stronger podcast ecosystem.

Alison Stewart: Nick Quah is Vulture's podcast critic. You should read his newsletter, 1.5x Speed. Nick is one of our friends of the show. Thank you so much for joining us. We really appreciate when you come on a show you're reporting.

Nick Quah: Thank you.

Alison Stewart: That's all of it for today. More than six years after her first EP, Madison McFerrin has made a full-length debut album, I Hope You Can Forgive Me. She joins us live at WNYC studios tomorrow to perform. I'm Alison Stewart. I appreciate you listening, and I appreciate you. I'll meet you back here next time.

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