Micah Loewinger: This is On The Media. I'm Micah Loewinger. Now we dive into Podcasting's first boom and bust cycle. Fun fact, OTM was among the first public radio shows to release entire episodes as a podcast back in 2005, by 2014 when this story begins, all the cool kids were doing it.

Nick Quah: This American Life had been publishing as a podcast in addition to a radio show for many years by that point.

Micah Loewinger: This is Nick Quah. He's basically the podcast critic. He writes for New York Magazine. As Nick points out, This American Life was still very much radio first. The form and content were limited by the radio listening experience.

Nick Quah: Because when you're beholden to the classic broadcast radio model, it's hard to tell a serialized story because if you were a radio listener and you caught an episode in minute 22 without the context of the 22 minutes beforehand, it's a little bit difficult to get to be sticky.

Micah Loewinger: You probably see where he's going with this. In 2014, the team released Serial, hosted by This American Life reporter, Sarah Koenig, a 13 episode season investigating the murder of Hae Min Lee and her convicted killer, Adnan Syed, then just a high school student. It showed that you could use a podcast to do serious in the weeds investigative journalism and attract an enormous audience.

News clip: Serial, the most successful podcast ever. It averages more than two million visitors per episode. It's a real life murder mystery that has those millions of fans hanging on every clue.

News clip: Audio is hot again, thanks to the smash success of a series called Serial. More and more people are listening, binge listening even, to podcasts.

Nick Quah: Serial showed that this kind of stuff was possible and that there was an appetite for it, but the question has always been like, can you make a real business out of this? [laughs]

Micah Loewinger: Probably the most famous attempt was Gimlet.

Alex Sujong Laughlin: I watched Gimlet starting. I was like, this is a new kind of company. This is a company that makes public radio style podcasts, but isn't in that system.

Micah Loewinger: Alex Sujong Laughlin produces the podcast Normal Gossip and recently wrote about the early days of Gimlet for a defector. Back in 2014, she was one of a wave of journalists entering the industry who were inspired by Serial and long form narrative shows on Gimlet.

Alex Sujong Laughlin: It really expanded the world of podcasts. It made the world a lot bigger.

Micah Loewinger: Started by This American Life alum, Alex Blumberg, and Co-founder Matt Lieber, Gimlet burst onto the scene with a list of plucky shows.

Alex Sujong Laughlin: Reply All, which was a spinoff of a WNYC show.

Micah Loewinger: And On the Media show no less.

Alex Sujong Laughlin: And On the Media show.

Micah Loewinger: Yes.

Alex Sujong Laughlin: Oh my God.

Micah Loewinger: TLDR.

Alex Sujong Laughlin: TLDR, yes. Reply All was the big one. It was a podcast about the internet and internet culture. There's Mystery Show hosted by Starlee Kine, which was a quirky weird show where Starlee played a detective trying to solve really mundane mysteries, and it was incredibly charming. God, I sound like such a fangirl.

Micah Loewinger: Then you had Startup, Alex Blumberg's meta podcast about starting Gimlet.

Alex Sujong Laughlin: The first episode of Startup called How to Pitch a Billionaire, it was him pitching Chris Sacca, who's a tech VC guy, billionaire.

Chris Sacca: If I were calling an Uber right now and it said it's going to be here in two minutes and that was all the time you had, what are you doing?

Alex Blumberg: I'm making a network of digital podcasts that is going to meet-- sorry.

Micah Loewinger: He was willing to make himself look bad on the show, I think, because it made him a more compelling protagonist. That warts in all honesty hooked listeners and investors.

Alex Blumberg: I don't know what it is, but somehow a podcast about me failing to generate FoMO in potential investors generated a lot of FoMO in potential investors.

Micah Loewinger: They raised over $28 million, and you could hear that influx of cash on its shows.

Alex Sujong Laughlin: There's an episode of Reply All where Alex Goldman called back a telemarketer and then hunted him down, flew to whatever country he was in.

Micah Loewinger: It was India, yes.

Alex Sujong Laughlin: Yes, went to the building where his office was.

Alex Goldman: I know where your front door is.

Telemarketer: The bottom line is, what do you want?

Alex Goldman: I want to know who was the person who called me and tried to scam me and I figured it out.

Telemarketer: What exactly you want from me, that's what I'm asking you.

Alex Goldman: I want you to admit that you guys are scammers and that you steal money from people.

Alex Sujong Laughlin: I remember being so enchanted with that episode because it took an everyday thing and took it to the furthest degree possible. I think that was only possible because of the budget, the money that they had.

Micah Loewinger: Audible, iHeart Media, Pineapple Street, Sony, Pushkin Industries, companies new and old jumped in to get a piece of the narrative podcast boom. There was a succession of shows during that 2014 to I want to say 2017, '18 stretch where there was a string of hits [unintelligible 00:30:04] Richard Simmons, Revisionist History from Malcolm Gladwell. You could argue, actually, I felt that Death, Sex & Money for you guys had a little bit of this heat when it came out, even though that's a weekly show.

Anna Sale: I will tell you, Micah, it was so fun.

Micah Loewinger: Anna Sale is the host and creator of Death, Sex & Money, a show made by WNYC Studios.

Anna Sale: When I started the show, I was 33 years old. I was a single woman living in New York City. I wasn't the demographic profile of most people in public radio with established shows.

Micah Loewinger: In May, 2014, the first episode of Death, Sex & Money dropped.

Bill Withers: Who in the world would come up with a title like that?

[laughter]

Micah Loewinger: The musician Bill Withers was her first guest and it was the kind of offbeat, probing conversation Anna would become known for.

Bill Withers: No.

Anna Sale: It's all the essential stuff, right?

Bill Withers: Yes, yes.

Micah Loewinger: The third episode of Anna's show featured a painful dilemma. Her relationship with her on again, off again, boyfriend, Arthur.

Anna Sale: We'd broken up because we didn't live in the same place and then my ex wanted to get back together and I was like, "Ah, how do we do this?"

Micah Loewinger: Arthur knew that Anna loved interviewing Wyoming Senator Alan Simpson during her days as a politics reporter on the campaign trail.

Anna Sale: Arthur was like, "I have an idea. If I write Alan Simpson a letter, maybe he'll call Anna and it'll make her laugh."

Micah Loewinger: It's such a funny premise. What did the letter say? He said, "Help me get this woman back."

Anna Sale: Basically.

Arthur: Here goes the love of my life, Ms. Anna Sale, lives in New York City. A month ago, Anna stopped believing I would ever close the distance to be with her and she cut me loose. I don't blame her. I was being a fool and I took her for granted.

Anna Sale: What he didn't know was that Al Simpson is also married to this incredible woman named Anne Simpson, who when Al Simpson did in fact call me, I heard Anne talking in the background-

Anne Simpson: This is just the sweetest letter.

Anna Sale: -and I said, "Well, what's Anne think I should do?" She got on the phone. [laughs] It's a weird story.

Micah Loewinger: And it worked.

Anna Sale: It worked. It definitely worked.

Micah Loewinger: You're such a mark. [laughs]

Anna Sale: I know. I know.

Micah Loewinger: Anna and Arthur have been married since 2015. They have two children together. That story, by the way, was picked up by This American Life and helped make Death, Sex & Money a hit.

Anna Sale: It was just like having your wildest dreams constantly expanded because not only were listeners hungry and showing up, but also as a maker, it was just blowing up all of my ideas of what was possible.

Micah Loewinger: WNYC was Jazz II. Public radio stations had long been limited to just three ways of bringing in the dough, sponsorship, what we call radio ads, membership, donations from listeners, and grants from foundations. WNYC is a little different. We also have a distribution arm and we collect syndication fees for nationally distributed shows like OTM. Now, WNYC could sell podcast ads without having to jostle for a slot on the crowded radio schedule. It was an electric time for the podcast industry. It felt like a new form of art and journalism was being built in real-time and Hollywood was paying attention.

Zach Braff: Tomorrow is my first official day as the boss of my new podcast company.

Micah Loewinger: This is Alex Inc, a 2018 ABC TV show based on Startup, the podcast based on the founding of Gimlet. Alex Blumberg is played by Zach Braff.

Zach Braff: You might wonder why someone with a good job, a wife, two kids, and a dancer's body would do something so risky. It's because I believe there's a place where I can tell the kind of stories I want to tell where I can work with the kind of--

Micah Loewinger: There were a bunch of these TV shows based on podcasts. Dirty John on Bravo, 2 Dope Queens on HBO, Dr. Death on Peacock, Song Exploder on Netflix. Podcasts were shiny, and those of us making them were suddenly in demand.

Jesse Thorn: The podcast boom was kind of crazy for us because all of a sudden people that work for us were just getting offered $150,000 a year or whatever.

Micah Loewinger: This is Jesse Thorn, host of Bullseye speaking here with reporter Emily Russell for her audio piece for Columbia Journalism Review. One of her big revelations, the math on these beautiful serialized shows just wasn't working. Here's Emily.

Emily Russell: For a narrative audio documentary project, budgets from the major buyers such as Audible, iHeart, and Sony could range from a quarter to half a million dollars, but projected revenue during a show's release might be closer to $200,000, and that's for the rare show with a million listeners.

Alex Blumberg: The fact is, Gimlet's specialty, our business model basically had been to make a kind of podcast that costs a lot of money.

Micah Loewinger: Alex Blumberg again in a 2019 episode of Startup in which he's reflecting on how five years after Gimlet's launch, the company was in dire financial straits.

Alex Blumberg: A lot of the things we assumed would happen, didn't. We assumed audiences would grow, but instead they plateaued. Our launches had not done as well as they had in the past, and some of our biggest shows with the largest audiences still weren't making money because we couldn't sell ads on them. There was another kind of show that was getting more and more popular, a kind of show that wasn't what we specialized in. Shows like Pod Save America and My Favorite Murder and The Dax Shepard podcast. These shows rely on a charismatic host connecting with fans and they're much cheaper to produce. The audiences for these shows are huge, way bigger than the audience for any Gimlet podcast.

Micah Loewinger: He's describing the always on podcast, they release consistently without breaks, unlike a seasonal narrative like Serial that takes months to make and only runs for a handful of weeks. Those gabfest-type podcasts are fun to listen to because you feel like you're hanging out with a group of friends just shooting the breeze.

Felix Salmon: It's a part-time job for me and for my co-hosts. We come into the studio, we chat to each other for an hour. We have a producer who edits it and puts it up.

Micah Loewinger: Felix Salmon is a financial journalist at Axios and a co-host of the Slate Money podcast.

Felix Salmon: The amount of work that goes into Slate Money every week is absolutely tiny compared to the amount of work that goes into a super produced and edited and scripted in many ways, podcast from WNYC or Gimlet.

Micah Loewinger: Despite the apparent troubles with Gimlet's business model, in 2019, this crazy thing happened.

News clip: Fresh off announcing that it made its first ever quarterly profit, Spotify also revealed a big bet on podcasting. The streaming service is buying podcast companies, Gimlet Media and Anchor FM. Price tag, a reported $200 million.

Micah Loewinger: By exclusively hosting Joe Rogan, Kim Kardashian, and Gimlet shows like Reply All and Heavyweight, Spotify thought it could differentiate itself from other music streamers. Founders of Gimlet stood to make millions.

Felix Salmon: Spotify was throwing around amounts of money that are quite normal in the music industry, but that are extraordinarily large by podcast standards and that just threw everyone off, and made everyone think that there was much more money in podcasting than perhaps there actually is.

Micah Loewinger: It was the last burst of hot air in the prestige podcast bubble. Within just a few years, Spotify appeared to change its mind as financial uncertainty swept the tech industry.

News clip: Spotify is laying off 200 workers or about 2% of its employees worldwide. The cutbacks will be in Spotify's podcasting unit.

Nick Quah: In addition to another round of layoffs at Spotify, the Gimlet brand is being hoovered into a larger Spotify studios banner.

Micah Loewinger: Nick Quah.

Nick Quah: Functionally, Gimlet Media as a brand doesn't quite exist anymore, which is like the symbolic end of this era. [laughs]

Micah Loewinger: Then this year.

News clip: NPR sent layoff notices to about a 10th of its employees this week. The network also announced the cancellation of four podcasts.

News clip: Some of them are pretty familiar to a lot of folks. Invisibilia, Louder Than A Riot about hip hop, you have Rough Translation.

News clip: There will also be layoffs at the satellite radio companies, SiriusXM. They're eliminating 475 jobs. That's 8% of its staff.

Micah Loewinger: Pushkin Industries, Malcolm Gladwell's podcast company cut 30% of its staff. LAist, formerly known as KPCC, got rid of some of its podcast-only shows, so did OTM's producing station WNYC, which canceled More Perfect and La Brega and cut staff members from Radiolab and the New Yorker Radio Hour and OTM. The company may also sunset Anna Sale's Death, Sex & Money.

Anna Sale: We are continuing to produce the show with our current team as New York Public Radio employees through the end of this year, and then something has to change.

Micah Loewinger: "The show will stick around," she says, "If the company can find a financial partner to support its costs," which could be seen as part of a wider reshuffling of public radio podcasts, like how The New Yorker bought In The Dark, the investigative podcast from American Public Media, or how Mother Jones is reportedly in talks to buy Reveal from the Center for Investigative Reporting.

Anna Sale: WNYC and I are talking to lots of people about new partnerships and potentially a new production home for the show.

Micah Loewinger: What went through your mind when you found out that the future of Death, Sex & Money was up in the air?

Anna Sale: I didn't feel angry. I felt like, "Okay, the status quo is changing, that's kind of scary and sad." It was interesting to me that for the first couple weeks when I would be talking about it, it's like I would just get this catch in my throat and I'd start crying whenever I talked about my team, and you're making me do it, my team and our listeners, and I don't want to let them down.

Micah Loewinger: Do you think the team will stay intact? Do you think they'll be able to come with you wherever you go next?

Anna Sale: I don't know.

Nick Quah: This has been the most challenged year for the podcast industry writ large, the podcast ecosystem since I've started covering it, which is 2014.

Micah Loewinger: When I asked Nick Quah what accounted for this flurry of layoffs, he quoted Leo Tolstoy, "Happy families are all alike. Every unhappy family is unhappy in its own way."

Nick Quah: What happened to you at WNYC is not what happened to Pushkin, it's not what happened to Gimlet. Everybody comes in from a very different category, but everybody's depressed by the same larger macroeconomic conditions.

Micah Loewinger: As I was speaking with Nick Quah, a podcast expert, and Felix Salmon, a financial journalist, about what was happening in our industry and in public radio, I came up against three contradictions. Contradiction one, prestige podcasts are shrinking, but podcast sting is growing.

Felix Salmon: The podcast ecosystem, just looking at it from an economic point of view, is still growing at a really quite objectively impressive rate. We are going to surpass $2 billion of podcast ad revenue in 2023. That's billion with a B. In 2025, it's going to hit nearly 4 billion.

Micah Loewinger: The water sounds really warm. Why are my friends getting laid off? Why are some of my favorite shows getting shut down? It doesn't make a lot of sense.

Felix Salmon: Really good question. The only real explanation for it is that the water is very warm, but it's not quite as warm as people thought it would be.

Micah Loewinger: According to the interactive advertising bureau's latest report, overall podcast ad revenue has never been better, especially for sports and comedy podcasts, but news podcasts saw a small drop in ad revenue in the past year.

Nick Quah: Podcasts are still being made and making money, but it's only a certain kind of podcast that's making the biggest sums of that money.

Micah Loewinger: Nick Quah.

Nick Quah: We're talking primarily about personality-driven talk shows, the Joe Rogans, the Call Her Daddys, the Marc Marons, that is just an engine that keeps printing money. It's a very efficient business model. Whereas the long-form narrative podcast format that I love, it's not dead. The dream of it has become harder.

Micah Loewinger: Contradiction number two, advertising for news shows is going down because the economy is weird, but actually the economy is doing okay.

Felix Salmon: The economy is doing great. We just had the third quarter GDP figures come out. We grew at 4.9%, which is crazy, like super fast economic growth. There was a little bit of a pullback towards the end of last year where people were worried about a recession. I talked about that with Brooke on The Story show-

Micah Loewinger: I remember.

Felix Salmon: -and in anticipation of this expected recession, a bunch of advertisers said, "Well, the first thing we want to cut is our advertising."

LaFontaine Oliver: We saw a $7 million drop in sponsorship sales between our fiscal year '22 and FY '23.

Micah Loewinger: This is LaFontaine Oliver, New York Public Radio's president speaking last month on WNYC's daily call-in show hosted by Brian Lehrer. Oliver declined OTM's request for an interview.

LaFontaine Oliver: For us as a nonprofit, that is significant. We've had to unfortunately take steps in saying goodbye to some of our wonderful colleagues. We are focusing on the shows that can serve both our radio and our podcast audiences, our multi-platform shows, our national shows like On the Media and The New Yorker Radio Hour, and Kai Wright's program Notes from America and Radiolab.

Micah Loewinger: Lafontaine Oliver's multi-platform audio strategy brings us to contradiction number three, radio is becoming more important even as its listenership declines. Look at The New York Times, which has begun syndicating two of its popular podcasts, The Daily and Ezra Klein Show on public radio. Vox has done the same with its show Today Explained.

Felix Salmon: I think of it as just very sensible business, which is you want to maximize the number of revenue streams associated with any piece of, and I'm going to use a terrible term here, IP. If you just have a podcast, really the only way you can monetize that audio is by selling ads against the podcast. What if I said to you, you can just take exactly the same piece of audio and get two more revenue streams from it? You can sell ads on the radio, and as you say, you can syndicate that show to other radio stations who pay you cash to put your show on their air. That's now three different revenue streams from the same piece of audio, and that's got to be a much more attractive business than just only having one.

Micah Loewinger: The radio listenership tends to skew older, tends to skew less diverse. The numbers for the radio listenership are, depending on what market you're looking at, steady, but pretty clearly trending downward. It's no TikTok.

Felix Salmon: Radio is orders of magnitude larger than podcasting. It reaches millions of people at all times of the day or night. It is a massive business. There is a trend there. It's probably downwards, but it's slowly downwards and it's predictably downwards. What we've learned over the past couple of years in podcasting is that it's much less predictable than radio is.

Micah Loewinger: Nick Quah feels that by cutting much of their podcast-only shows, NPR and WNYC are setting themselves up for future failure.

Nick Quah: It feels like both organizations are receding deeper and deeper into itself when it should be unfolding wider and expanding and trying to really reinvent itself for the changing media landscape, demographic, and the world that it exists in. If you are not reaching new people where they are, you will not be here in 20 years. It is as simple as that. I'm sorry, I feel like I'm very angry. I'm coming out very angry and I am, but it's like, "Boy, nobody's asked me about this stuff for a while." I'm really pissed about it.

Micah Loewinger: Why are you pissed?

Nick Quah: Because I value public radio, I really value the enterprise of producing journalism and creative work that is for the public that is to a meaningful extent, disentangled from a pure for-profit, capitalistic structure. You are in a position to produce more interesting and better work. On the Media is one of the greatest shows of all time. If nobody's out here being angry, trying to defend it, and think about its future, then what the fuck are we doing?

Micah Loewinger: NPR, WNYC, LAist, these guys have been in the podcast game for a long time. They didn't just dip their toes. They're saying 10 years on of experimenting with podcasts, they're really expensive to make. You got to pay those hosts so much money, you got to fly them all around the place to report these fancy stories. It didn't work. Why are we chasing a unicorn when we've got old reliable over on 93.9?

Nick Quah: Two things. One, old reliable is not going to be reliable forever. Something feels different about how fast things are changing in the way that we're moving today. The second thing I'll say about is that, did it fail because of the theory or did it fail because of the execution? I would argue it's the execution. I'll say it out loud. It does feel to a large extent like budget mismanagement. You're focusing on all the executives that you want to pay lucrative salaries to in relation to your newsroom. The model works within the context of an organization that's able to support it

Micah Loewinger: According to public data from 2021, keep in mind there's a two-year lag for nonprofit tax records, New York Public Radio's last President made $749,000 a year including bonuses, compared to NPR's President at the time who made $466,000 a year. NPR is around twice the size of New York Public Radio, and yet our last president made 280K more.

LaFontaine Oliver: Back in June, even before we started talking about the possibilities of layoffs, I made the decision to cut executive bonuses for the year.

Micah Loewinger: Current New York Public Radio President, LaFontaine Oliver, explaining to WNYC host Brian Lehrer, why he chose not to reduce executive base salaries in response to our $10 million deficit.

LaFontaine Oliver: We did not fill some executive roles to keep our overall executive salary pool lower. As there's been turnover, we've hired people at lower salaries than their predecessors, myself included.

Brian Lehrer: How did you decide to not cut our local news team?

LaFontaine Oliver: Local news is our stock-in-trade. Going into an election year, and also thinking about the legacy and the history specifically of WNYC, going back 99 years being focused on serving the local news needs of New Yorkers, that was just really important to us.

Micah Loewinger: After years of incubating and betting on the podcast economy, New York Public Radio appears to be changing course, but Nick Quah believes that podcast fans should remain hopeful.

Nick Quah: The fact remains that podcasting is here to stay. People want this stuff, people want to make this stuff. It's becoming a bigger part of a lot of people's media habits, media diets. This is something that every television studio has already known, every film studio has already known, every music label has already known that there are ups and there are downs. This is podcasting's first big down. I think there's going to be a generation of talent that's going to come out on the other side, all the stronger for it. Maybe [unintelligible 00:50:29] hopefully.

Micah Loewinger: One of the big lessons of the podcast industry and digital media in general, is that if you think you can get rich off of journalism, you will either fail or cash out at other people's expense. When it comes to public media, the challenge we face is experimenting sustainably, taking risks, and giving new shows space to grow while balancing the books. Good audio journalism takes time. It's also expensive, which is not a bad thing, just a fact. It's what our listeners pay to support. The profit centers of the podcasting world will zoom past public media, past hard news, past radio. Their water is hot, ours is lukewarm, but it's actually kind of fine once you get used to it.

[music]

Micah Loewinger: That's it for this week's show. On the Media is produced by Eloise Blondiau, Molly Rosen, Rebecca Clark-Callender, and Candice Wang with help from Shaan Merchant. Our show was edited by Katya Rogers, our executive producer. Our technical director is Jennifer Munson. Our engineer this week was Andrew Nerviano. On the Media is a production of WNYC studios, I'm Micah Loewinger.

 

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