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Jan. 28, 2020, 11:53 a.m.

What should a public broadcaster be in the digital age? The BBC is asking (and being asked) that question

Plus: Serial is up for sale, Joe Rogan flexes his political muscle, and the economics of 24/7 lo-fi hip-hop YouTube livestreams.

Welcome to Hot Pod, a newsletter about podcasts. This is issue 243, dated January 28, 2020.

Recap. The busyness of January continues. Three stories from the last seven days:

  • On Tuesday, Bloomberg reported that Apple is planning to finance original podcasts that would serve as companion media to its slate of programming on Apple TV+. It’s unclear how much these plans are connected to Bloomberg’s other podcast story from last summer, which reported that Cupertino was planning to bankroll original podcasts that would be exclusive to its platform more broadly. (Those plans were contextualized as efforts to better compete with impending podcast rivals, primarily Spotify.)

    In some corners of the podcast community, that earlier story kicked up a bit of anxiety about a balkanized future, one that would compromise open podcasting as we know it. If this TV-companion podcast business is all there is to it, then maybe some of the worried can rest easy. Then again, maybe not.

  • On Wednesday, The Wall Street Journal’s Ben Mullin dropped a scoop that Serial Productions, the spinoff company of This American Life that houses Serial and S-Town, has been shopping around for a sale. Only one potential buyer was named: The New York Times.

    A most peculiar development. I laid out a fairly lengthy piece explaining why in Thursday’s Hot Pod Insider.

  • On Thursday, I was able to confirm that Endeavor Audio, the audio division launched by the entertainment conglomerate Endeavor in the fall of 2018, is pulling out of the podcast advertising business as part of a pivot and a broader restructure. As a result, the division has laid off its in-house sales team.

Podsights, a podcast analytics startup, is announcing a $1.5 million funding round today. Funders include Greycroft (which has also invested in Wondery, Glow.fm, Chartable), Betaworks (Gimlet Media and Anchor), BDMI (Wondery and Art19), and Rooks Nest, plus a group of angel investors that includes Medialink founder Michael Kassan.

The announcement comes with a series of other changes at the company, including a rebrand, some product rearrangement, and several new hires. Full details on those specifics can be found in this company blog post.

If you’re unfamiliar with Podsights, here are the broad strokes: They focus on building out analytics and research tools to help advertisers better track (or at least feel better about) the impact of their buys on podcasts. At the moment, its client list includes Barstool Sports, The New York Times, NPR, and Wondery.

Central to Podsights’ efforts is the notion of cross-platform attribution — that is, being able to ascertain whether a specific podcast ad led to a desired outcome, like the purchase of a product being advertised. Historically, attribution in podcast advertising happens only on a high level, measured mostly by visits to a vanity URL or purchases made using dedicated promo codes. Podsights’ intent is to provide advertisers with more information on the various ad-triggered interactions that can happen before that point. Its methodology broadly involves the usage of a pixel that would sit on the brand site that’s meant to match, as best as it can, an analytics prefix that a publisher would implement on its hosting platform, with the goal of signaling to the brand whenever someone who listened to a specific ad did, indeed, head over to the brand’s website.

There’s quite a bit more to the mechanics of it all, and if those specifics are directly relevant to you, you can dive deep into the site’s documentation.

Here’s my sense of the big picture: Podsights strikes me as sitting between two competing industry impulses. On one hand, you have a chunk of the community advocating for more robust podcast analytics so they’re better able to attract, retain, and deepen relationships with advertisers — most of which are generally accustomed to a certain granularity (and user privacy invasion) when it comes to assessing their ad spends.

On the other hand, you have a chunk of the community that’s vehemently skeptical of/antagonistic to any movement to bring podcast advertising closer to digital modernity — having seen what happened to the rest of the internet. (Reading about Podsights’ new funding in the wake of Spotify announcing its own push into podcast ad tech is certainly…interesting.) From the looks of its website — and briefly speaking with the team for this story — Podsights exhibits a certain brash confidence that it will be able to forge a solid middle path forward. Then again, of course they would.

If Podsights gains traction, things to watch would include:

  • how the company handles concerns about privacy (the team says it’s compliant with GDPR and CCPA),
  • how its data universe will mesh with and be accepted by the rest of the podcast industry (notably, Podsights isn’t IAB-certified, positioning itself as an improvement on IAB’s standards),
  • how effective its modernized data sets will be understood to be (I’ll let the aggregate publisher class decide on that), and
  • how the podcast advertising market reacts to the introduction of that data (in other words, how would publishers’ revenues be impacted by advertisers’ changed understanding of their reported downloads).

This company is worth keeping an eye on. It has the potential to trigger…quite a bit of change.

Talking points memo. We’re less than a week out from the Iowa caucuses, and the podcast-politics beat is red hot. Three story threads:

  • Joe Rogan — whose podcast is thought to be one of the most influential platforms out there — endorsed Bernie Sanders last week, sparking a fair bit of hubbub.

    Central to the discourse is Rogan’s history of controversial statements, positions, and affiliations. There’s a line of argumentation that situates him in the so-called “Intellectual Dark Web,” a questionable grouping of broadly anti-political-correctness/freethinky types. But more concretely, Rogan has in the past expressed opinions that have been criticized as transphobic or racist. And then you have his whole thing with the conspiracy theorist Alex Jones, who’s appeared as a guest on the podcast a couple of times. There’s some tension in Democratic circles around the Sanders campaign’s decision to embrace the endorsement. This Times piece has a decent rundown of the situation — though I suppose it’s worth noting that Rogan’s endorsement came during an episode featuring the Times opinion writer Bari Weiss.

    I continue to be surprised at the number of folks who seem shocked by the size of Joe Rogan’s platform, but then again, I’m too deep in this podcast stuff.

    For what it’s worth, I don’t tune into his show very much. It’s not my cup of tea, and I personally get hung up on the controversies. But I do recognize it to be not only a pure creature of podcasting, but a force that hasn’t been adequately reckoned with. It’s something worth understanding for us to know something about where we’re going.

  • I’m getting this tattooed on my back:

    More to the point, though, between Giuliani’s…podcast (?), Ted Cruz making an impeachment pod of his own, and whatever Steve Bannon’s got going on, I suppose it’s enough to say that we’re seeing some attempt by conservative voices to build up some audience over the podcasting pipes. The political podcast space, I’d argue, has been defined largely by the left — from the prominence of Crooked Media to the Chapo “Dirtbag Left.” That said, I’m not inclined to bet on that gambit paying off; I think podcasting continues to favor demographics that tend to code as liberal (young, tech-savvy, often but not always “wealthier” and “more educated” — to the extent those things map these days).

    On a related note, I found this piece of origin story about Bannon’s podcast (from a Sarah Ellison writeup in The Washington Post) pretty interesting. Turns out the thing started as a segment on right-wing regional talk radio.

  • In the wake of Mary Louise Kelly’s testy NPR interview with U.S. Secretary of State Mike Pompeo — which was followed by a more testy post-interview episode, which was then followed by even more testiness (and then some) — I wouldn’t blame you for feeling that the administration may well now have its knives out for the public radio mothership. (Certainly, after this tweet, and considering the context of Trump’s past attempts to defund public media.)

    First of all, always remember to support your local public radio station (shouts to Boise State Public Radio). And second of all, you can quickly read up on the relationship between federal funding and the public radio system here.

    The timing of all this is especially interesting for us, given that Caroline has been working on this next column over the past week…

What is the role of the BBC in 2020? [by Caroline Crampton] In 2022, the BBC will mark the centenary of its founding. Though it didn’t actually become a public service corporation until 1926, I’m fairly certain there will be plenty of upbeat programming to commemorate the occasion. People who love the BBC will get teary and nostalgic, those who love to bash it will say it’s self-congratulatory and smug — a good time for all, essentially. Celebration plans have been in the works for years.

But 2022 will be a big year for the BBC in another less visible way. It’s licensed as a public broadcaster via a Royal Charter, the terms of which are renegotiated with the government every 10 years. The current agreement doesn’t run out until 2027, but at the five-year point in 2022, discussions with ministers will begin about its key funding mechanism, the license fee. Those talks will determine what and how the public contributes to the BBC in the future. And judging by the widespread antipathy towards the BBC from the current government, it’s likely that the corporation won’t be able to count on much goodwill. That’s why current director-general Lord Tony Hall has just announced his resignation — he’s clearing the way for a new leader to tackle this process, free from the baggage of the past few months and years.

December’s general election, a landslide victory for the Conservative Party, accelerated a narrative around the BBC that had been growing slowly for quite some time. For decades, Conservatives have argued that the BBC sucks up too much public money and inhibits the operation of a free media market in the U.K.

Private files finally made public in 2014 revealed that Margaret Thatcher had, during her tenure as prime minister, used an extensive financial review process to “knock the BBC down to size,” believing it to be “biased and irresponsible.” Her successors have done their best to carry on this work: from former chancellor George Osborne forcing the BBC to take on the multi-million-pound responsibility for free TV licenses for seniors over 75 to current PM Boris Johnson now considering the possibility of decriminalizing nonpayment of the license fee — which would be a de facto funding cut since, without the threat of criminal proceedings, it’s widely believed that far more people would avoid paying. Now, following the last election, Johnson is in power with a substantial Conservative majority; it follows that he’ll pursue this downsizing agenda while he has the chance. He indicated as such during his campaign.

Nothing happens quickly with the BBC. But speaking to people who both create and use the corporation’s services, it does feel like opinion has rapidly shifted and that there is indeed a major crisis in the offing. My sense is that it’s in large part the result of four overlapping problems that have each come to a head.

They are:

  • The rapid pace of evolution in media consumption habits ushered in by the streaming giants. The regulator Ofcom has been tracked the extent to which younger audiences have been turning away from its services in favor of commercial subscription options like Spotify and Netflix. If the BBC doesn’t serve the whole U.K. population, the argument for a universal tax-like funding model backed up by criminal sanctions is substantially weakened — and the case for making the BBC an optional subscription service or splitting the license fee with other providers that do reach these audiences is greatly strengthened. One presumes podcasting — in particular, commercial podcasting — fits into this thread.
  • The internal breakdown of trust engendered by numerous equal pay disputes. Just this month, presenter Samira Ahmed won a landmark tribunal that ruled she had been unfairly discriminated against. (She’d received £440 per episode for presenting the feedback show Newswatch; Jeremy Vine got £3,000 an episode for the very similar program Points of View.) And it’s not just the pay disparities that are affecting morale, but also the sluggish and sometimes bizarre way the BBC is choosing to handle the conflict. For instance, in the Ahmed case, they tried to claim that Vine’s much higher pay was justified because he was an entertainment presenter rather than a journalist who “would often dress up for small visual gags.” Ahmed’s lawyers pointed out that these gags in fact amounted to “one wig and one hat,” a needlessly petty defense that was completely overruled.

    Plenty of dissatisfied staffers are keeping an eye out for other opportunities; just yesterday, The Times of London announced a new daily podcast with Manveen Rana as host, who joins from BBC Radio 4’s flagship current affairs show Today. (This morning, The Times went further, announcing an entire new digital station called Times Radio with, as The Guardian put it, “the aim of luring listeners away from BBC Radio 4 and 5 Live at a time when the public broadcaster is facing cuts.”)

  • The new news battleground of social media. The BBC employs around 20,000 people, and being humans, they make mistakes. Sometimes these mistakes are small and easily fixable. Other times, not so much — like this past weekend, when it aired footage of LeBron James as a voiceover identified him as Kobe Bryant just hours after he died in a helicopter crash.

    During the election campaign, there were several instances where journalists made serious factual errors, such as when the BBC’s political editor tweeted that a Labour Party activist had punched a Conservative staffer on the campaign trail. (Nothing of the sort had occurred.)

    In that instance, apologies were made and tweets were deleted. But these errors now happen in a place where hundreds of thousands of people can see them before they are corrected, and where they can feed existing narratives about “bias” and poor journalism. The BBC’s Charter requires that it adhere to high standards of editorial proof — but on Twitter, correspondents can fire out bad information without any oversight. The BBC feels it needs to be on social media because its audience is, but it’s not clear that such standards can ever be compatible with the rapid pace of Twitter discourse.

  • The BBC’s weaponization in a culture war. In addition to the ideological objection to the BBC from Conservatives, there’s a growing sense that the majority London-based, largely middle-class-staffed BBC has dropped the ball on covering issues like Brexit. Right-wing commentators are now calling for a wholesale dismantling of the corporation, while those on the left are writing impassioned defenses of it as a “public good.” Similar to how the NHS has become a political football in the U.K., the BBC now seems to have become a weapon in a polarized culture war from which I pessimistically believe nobody will emerge with honor. It’s worth noting that Hall already made a small step towards addressing this on a geographical level at least, announcing that two-thirds of BBC staff will be based outside of London by 2027.

These four problems are interrelated. In addressing them, the BBC has to reconcile several near-impossible divisions. It has to keep its loyal older audience while also luring back younger people; it has to make world-beating public service content while also cutting costs; it has to stop its best talent from defecting while avoiding any perception of overpayment; and it has to lead the way in a fast-moving digital news environment while undertaking time-consuming fact-checking and verification processes. Whoever succeeds Hall as director-general has an unenviable task ahead of them.

There’s an existential question at the heart of all of this. What do we want to BBC to be in 2020, 2030, and beyond? I don’t particularly like content-based arguments when making a case for its preservation, so I won’t claim that lane. (For what it’s worth, it produces my favorite foreign documentaries; therefore, it’s flawless.) But I do think there has to be some radical change, one that shouldn’t just be reactive and/or preservationist. I don’t think the quality of journalism I want the BBC to be doing is compatible with the constant pursuit of “breaking” news on Twitter, for instance. And there are serious questions to be asked of how in areas like online news, podcasting, and TV entertainment it inhibits the creation of commercial alternatives.

It’s always tempting to say that the BBC should just do, like, the “wholesome” stuff. The BBC Sounds app could be stacked with wonky shows about international affairs and public policy while leaving celebrity-hosted sports podcasts and reality-star chat shows to the commercial publishers. But I’m very wary of itemizing the BBC’s output like that. Right from that beginning, way back in 1922, it’s always been the case that popular entertainment cross-subsidizes worthy journalism. There are things that draw people in so their attention can be spread around elsewhere. Stripping out entertainment and then expecting dry investigative journalism to survive — with an audience grown used to the vast array of choice on Netflix — is unrealistic to say the least. The BBC isn’t a publisher so much as an ecosystem, and it has to be diverse to thrive.

A line in this recent piece by Columbia’s Emily Bell caught my eye while I was thinking through this dilemma. “The BBC’s social contract is for a civic, not commercial, enterprise,” she wrote. “Its promise is for something owned by society, offering more than the flat space of internet ‘content’.” Which is not to say that there isn’t space for rapid and widespread reform — there really is — but I think Bell is fundamentally right there. The BBC is best viewed as a civic project; it’s a way for the U.K. to aspire to make something better of itself. It’s going to be a tense few years watching to see if that vision can win through.

Miscellaneous. From Variety: “Meet Cute, a New York-based podcast company that focuses on romantic comedies, has secured more than $3 million in funding from a group of investors, including Shari Redstone’s Advancit Capital and venture capital firm Union Square Ventures.”

Elsewhere, PodFund has put out a portfolio update note, which you can find here.

Meanwhile, in Vulture, I wrote about The Choice, which The New York Times created as a companion to their Democratic endorsement special on The Weekly.

Preamble. You probably won’t be surprised to know that I am a living, breathing hipster millennial stereotype, one expression of which is my fondness for working to a certain kind of soundtrack: what has been called “lo-fi hip-hop.” Specifically, I tend to leave this YouTube stream playing in the background while I read, email, reflexively stare at Twitter, and crank out thousands and thousands of words for you every week. It wasn’t until a few weeks ago, when a reader brought up the curiousness of these operations, that I finally asked the question: How does this thing exist?

And so I turned to the person I know who would be best at answering that question. As you may or may not know, I help publish another newsletter, Water+Music, which is written by Cherie Hu and generally focuses on innovation in the global music business. She’s absolutely brilliant at this type of thing, and so I commissioned this next piece, which will also run in her newsletter.

It might not immediately strike you as a writeup that’s relevant to our concerns here in Hot Pod, but what she found, I think, speaks to a lot of things that also linger in the minds of podcast makers. Aside from the appearance of Spotify, these are things like: How do you make something unconventional work? How do you carve out a better position when a platform you depend on isn’t working all that well for you? What does it mean to have a knowable identity when mediated by a larger distribution platform?

Anyway, enjoy.

The economics of 24/7 lo-fi hip-hop YouTube livestreams [by Cherie Hu]. With their instantly recognizable combination of nostalgic, mellow, boombap beats and colorful, anime-inspired looping GIFs, 24/7 lo-fi hip-hop livestreams on YouTube have won the hearts and studious minds of millions of listeners. Much ink has been spilled on the scene’s swift rise, dynamic community, and perhaps problematically leanback nature over the past several years.

Today, I’d like to focus on an angle that hasn’t yet been explored in depth: How, if at all, do the artists, labels, and curators in this scene sustain themselves financially? And how are they approaching their future growth and evolution, as the lo-fi hip-hop economy becomes ever more saturated and commoditized?

But first, a brief history: As a musical style, lo-fi (short for “low-fidelity”) hip-hop has been around for decades. In the ’90s, producers like J Dilla, Madlib, and Nujabes pioneered the downtempo beats that define the genre’s sound today. The culture has also been highly visual from the very beginning, with TV channels like Adult Swim featuring lo-fi beats in their programming and helping to bring the sound to a mainstream audience. However, the 24/7 lo-fi hip-hop ecosystem as most people know it today didn’t take shape until 2013, when YouTube opened up native live-streaming capabilities to any channel on the platform with 100 or more subscribers.

If you search “lofi hip hop livestream” on YouTube right now, you’ll find over 30 different live broadcasts dedicated to the genre. The most popular ones, from the channels ChilledCow, Chillhop Music and College Music — all run by white European men in their 20s, I should say — can attract 20,000 concurrent viewers or more at any given time.

In terms of presentation and content, these broadcasts follow more or less the same formula. Their titles are all structured to make their functional use cases clear and SEO-friendly (e.g. “lofi hip hop radio — beats to relax/study to” or “vocal lofi hip hop radio — emotional/late night beats“). The featured songs are brief, sample-heavy instrumental vignettes that typically last no longer than 2.5 minutes each. And while the songs are short, the user engagement lasts much longer, with average watch time clocking in at over 50 minutes for some broadcasts.

The kicker, though, is that while YouTube has become the modern lo-fi hip-hop community’s primary gathering space and watering hole, it’s not the sector’s primary revenue stream.

All of the lo-fi artists and producers I spoke to for this piece said they never get compensated for their songs being played on YouTube livestreams…and, intriguingly, they were totally okay with that. That’s partly reflective of lo-fi hip-hop’s persistent DIY ethos, whereby artists and labels are typically happy to forgo revenue and give curation channels a non-exclusive, royalty-free license to stream their music in exchange for exposure to a loyal and engaged community. (Interestingly, to my knowledge, this approach has not led to any takedowns of livestreams due to copyright infringement claims related to the music itself; all publicly-reported takedowns so far have been due to infringements on visual media, such as Chillhop’s allegedly unauthorized use of a clip from the Japanese film Wolf Children.)

But the lack of payment is also partly indicative of infrastructural and financial struggles that the livestream channels face themselves, particularly around advertising. Unlike other types of longform YouTube videos, 24/7 lo-fi hip-hop livestreams tend to serve only one ad to viewers — a preroll ad when they first start the video, then none for the rest of their listening time. The result is disproportionately low ad revenue despite longer engagement from viewers.

Let’s walk through a concrete example of this gap. College Music was generous enough to share some lifetime watch-time and view-duration stats for its “vocal lofi” livestream, which has been active since September 2016.

From September 16 to January 21, the livestream generated 38 million minutes of watch time, with an average view duration of 52 minutes — implying something like 750,000 total views. Assuming YouTube’s average per-stream royalty rate is around $0.001 (this figure can vary widely in tandem with ad rates at large), that would put College Music’s lifetime revenue from this single video at only around $1,300. To split that money among every single song played in the video over the past four months would be costly and unrealistic.

With paltry YouTube revenue, many lo-fi hip-hop channels have ventured beyond just curation and founded their own record labels in order to build up a catalog that can be monetized elsewhere, like on Spotify and Apple Music. Most of these labels sign non-exclusive deals that cover individual singles rather than albums — meaning that artists can choose to release said singles with other labels as well, which can be useful for getting featured on several lo-fi compilations and mixes at once.

Chillhop Music is perhaps the most notable example of this transition. Founded as a YouTube curation channel in 2013, the brand has since established a label and publishing division, with around 25 total in-house staff. Even though Chillhop still commands a significant audience on YouTube, Spotify now accounts for the vast majority of the brand’s revenue; the company’s CEO Bas van Leeuwen tells me that Chillhop’s label catalog generated over 1.1 billion streams on Spotify in 2019, implying between $5 million and $8 million in annual revenue from that platform alone (assuming a $0.005–$0.007 average per-stream royalty rate). “While YouTube is still one of the only platforms where you can build up an audience and talk to them, from a label perspective, we actually prefer if people listened to our catalog on Spotify instead of on our livestreams,” says van Leeuwen.

Lo-fi now has a significant presence on Spotify, with playlists like Lo-Fi Beats and Jazz Vibes commanding millions of followers. (ChilledCow and Chillhop also maintain their own Spotify playlists that each tout over 1 million followers.) But this has also led to highly inflated streaming stats around lo-fi hip-hop that don’t actually reflect artists’ popularity. Because the average listener treats a lo-fi hip-hop playlist as background fodder for other activities (like relaxing, sleeping, or focusing), actual recognition of, let alone engagement with, individual artists is rare.

One popular metric for measuring artist engagement on Spotify is the ratio of followers to monthly listeners, which by music-industry standards should ideally fall between 15 and 20 percent. Lo-fi hip-hop doesn’t even come close. For instance, Moods, a producer who has released music independently and through Chillhop Records, has 1.3 million monthly listeners on Spotify but only around 29,000 followers — a conversion rate of 2.2 percent. Similarly, Brenky, a producer who has released nine albums over the past three years, has 1.2 million monthly listeners but only around 4,000 followers — just 0.3 percent.

In other words, these producers are getting massive reach but almost zero follow-up from fans. As Luke Pritchard, co-founder of College Music, tells me: “If you take a traditional hip-hop artist and a lo-fi artist who both have tens of millions of streams, the former could maybe sell out a tour, but the latter would likely struggle to sell 10 tickets.”

In this landscape — where songs are interchangeable, indistinguishable commodities and artists are unrecognizable to the average ear — it’s arguably larger content aggregators and curators, not artists, who are at the top of the food chain. And now several companies, some with venture-capital funding behind them, are racing to claim their own share of the lo-fi aggregation market.

For instance, music distributor Amuse now sponsors several lo-fi hip-hop playlists that prioritize artists who use the company’s distribution tools. One of the most commonly playlisted lo-fi hip-hop labels on Spotify is Epidemic Sound — a Swedish production-music company notorious for buying out all of the rights to its artists’ works and refusing to sign artists affiliated with performing rights organizations (PROs) like ASCAP and BMI. The relatively new lo-fi label Strange Fruits is playing the volume game, having released over 1,500 tracks within just two years — but sources tell me their deals are also exploitative, allocating only 30 percent of revenue to artists (versus the standard 50/50 split in the lo-fi ecosystem).

Several veteran lo-fi labels and curators are actively working to circumvent this commoditization and make sure that they, as well as the artists they sign, can still lead sustainable careers. Some are developing more visual-centric sub-brands (e.g. lo-fi label Dust Collectors’ new Instagram-friendly “visual label” Visualizer). Others are selling vinyl LPs — an intriguing twist for a genre that’s so heavily online; Chillhop, College Music, and United Common Records have all hosted successful vinyl-crowdfunding campaigns on the platform Qrates, collectively selling thousands of records.

Chillhop even has plans to open its own lo-fi hip-hop cafe this year, with an accompanying podcast. “We want to tell deeper storylines, and to showcase a culture and a lifestyle,” says van Leeuwen. “I want to make sure we’re not building a company where everyone’s full-time income is based off of the ability to get onto editorial playlists on Spotify.”

Photo of King George V making his 1934 Christmas broadcast to the nation via BBC.

POSTED     Jan. 28, 2020, 11:53 a.m.
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