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Jan. 21, 2020, 11:54 a.m.

Would acquiring The Ringer move Spotify to the top of the Podcast Pyramid?

Plus: new leadership coming to the BBC, a Scottish podcast network debuts, and a Public Radio Palooza.

Welcome to Hot Pod, a newsletter about podcasts. This is issue 242, dated January 21, 2020.

The Ringer and Spotify. On Friday evening, at the top of a long weekend — a time slot known in some cultures as “News Dump O’Clock” — The Wall Street Journal dropped a mighty curious story with considerable implications for Podcastland: Spotify, the story reported, appears to be in “early talks” to acquire The Ringer, the distinctly podcast-heavy digital media company founded by former ESPN personality Bill Simmons.

The key word here being “early,” with the Journal noting that sources close to the matter cautioned that these discussions may not ultimately result in a deal. Also worth flagging: a mention that Spotify is still in the hunt for more assets to pick up, and that The Ringer is one of many possibilities. Spotify, for their part, declined to comment “on rumors and speculation” when contacted by CNN’s Kerry Flynn.

I didn’t drop an extra newsletter when the news came out — come on, it was Friday evening! let me live! — but I did write a short thing on the development for Vulture because apparently I don’t actually have a life.

It’s a curious story, given the timing of the drop and the supposedly early nature of the talks. This is the kind of news dump that’s fertile for speculation: What’s the likelihood of this happening? Why was this report dropped on a Friday evening before a long weekend? Is it a trial balloon to see how folks would react? Was it a leak for leverage? What’s going to happen to the non-audio components of The Ringer? If the purchase does happen, will it definitely mean the end of The Ringer’s written-word operation — a segment that’s most fraught on the internet these days and one that the Swedish music streaming company has virtually no background in? Will we see The Bill Simmons Podcast go exclusive? Yada yada yaaadda.

Spicy questions all, but all slightly pointless at the moment, since a deal may not actually come through. So what I’d like to do, instead, is reframe the approach and layout why I think this move would make a ton of sense for Spotify.

Let’s start with the big picture. Pushing hard to becoming an all-consuming audio platform, the Swedish company has already spent more than $400 million acquiring three podcast companies — Gimlet, Parcast, and Anchor — and has also engaged in several exclusive partnerships (including one with the Obamas) as part of a process to bolster its original programming slate. Earlier this month the company announced its own podcast adtech called Streaming Ad Insertion (SAI), which represents an effort to strengthen its position on the podcast monetization side, a longtime gap in this ecosystem. To restate in summary: Spotify wants to build out a strong on-platform podcast market, and as such it’s working really hard to increase its value on all sides of the market — for listeners (via originals and simply expanding catalog inventory), for creators (via SAI and potential new listeners), and for advertisers (also via SAI and potential listeners).

Acquiring The Ringer, and its audio operation in particular, would fit pretty neatly into this multi-sided pursuit. I suppose the main way I’d describe The Ringer is as a prominent digital media company (and brand) that’s been especially successful — more so than most of its peers — on the audio side. The Wall Street Journal article reported that The Ringer’s audio division, which boasts more than 30 podcasts, brings in more than 100 million downloads a month (!), and an earlier Journal report from January 2019 noted that the audio side topped $15 million in ad sales in 2018. It’s unclear just how much of The Ringer’s overall business is made up of its audio revenue, but whatever the breakdown, it seems pretty clear that we can consider it a “core” part of the business. (For what it’s worth, I went back and forth on whether to describe The Ringer’s audio-centrism as “unique,” largely due to the existence of Slate, whose business, as I wrote last week, is now about 50 percent audio.)

The Ringer has always struck me as a business that was built to sell. Among the data points informing this view, justly or otherwise: its rapid headcount growth (that earlier Journal report noted that the headcount was expected to hit 100 by the end of 2019, which seems crazy fast given its 2016 founding) and the history of the hubbub around the company. As the dude Peter Kafka noted in his analysis of the report over at Recode (which resonates with me, by the way, go check it out), there were talks last year of a sale to WarnerMedia (now the owner of HBO; HBO backed The Ringer at its launch). Those talks didn’t ultimately pan out, but it nonetheless underscores the point: We’re not talking about a Radiotopia here.

From a hard numbers standpoint, picking up The Ringer’s prolific podcast network — with a mix of very popular shows (like The Bill Simmons Podcast, The Rewatchables, and Binge Mode) and an ever-expanding universe of niche fare — would vastly increase the number of relatively cost-effective (not always but still) talk-style podcasts in Spotify’s original programming portfolio — which, aside from The Joe Budden Podcast and Amy Schumer Presents, skews more narrative-ish. That network would also bring in considerable revenue right off the bat, which wasn’t necessarily the case with some of the other podcast deals Spotify has made thus far.

Furthermore, on top of the actual shows themselves, Spotify would be acquiring an operation that not only knows how to produce talk programming at some degree of scale, but one with a track record of (1) being consistently experimental and innovative, (2) being really fast in going from idea to execution to iteration, and (3) being able to tap into the audience development potential of its podcast operation as a network. (Which, interestingly, doesn’t appear to be something many multiple-show publishers have mastered.) You could also make the argument that, depending on how the branding arrangement works out, The Ringer could theoretically give Spotify the ability to touch an expanding range of subject areas they’d otherwise have to spend time and resources build in-house programming expertise in: movies, television, sports, celebrity culture, and so on.

It’s tempting to make a rather crude comparison at this point: that Bill Simmons could be Spotify’s Howard Stern, i.e. a figure with a big enough following to substantiate a walled garden strategy. But that analogy would be limiting; Simmons’ influence extends beyond a single show towards a wider network and cadre of talent. And so, if you’re thinking about making 1:1 SiriusXM-Spotify analyses, I’d recommend against it. (That might make sense if we’re talking about a Spotify–Joe Rogan deal, but this is a different animal.)

Also, not for nothing, but I do think there’s value in The Ringer being…uncontroversial. Compared to, like, Barstool Sports — which now might be sold to a sports betting company — along with the aforementioned Rogan and Stern. (Is Stern still controversial? Maybe not.)

Anyway, let’s again recognize the possibility that nothing might come from this report, and that there are a fair number of devils in the details to be hammered out.

First and foremost would be the fate of every non-audio aspect of The Ringer, of which there are many. As I noted out in my brief Vulture writeup, the company also has an editorial website, a book-publishing deal, a documentary unit, and an active YouTube operation, among other things. Now, I’m biased as a creature of the written web, but I’d argue that it would be in the acquirer’s interest to retain and invest in those aspects, if only due to my strong belief in many of the core ideas laid out in Ben Thompson’s November 2015 piece “Grantland and the (Surprising) Future of Publishing.” (Yep, the Grantland-Ringer connection is acknowledged.) Chief among them is the idea that, in the current digital media context, different media formats can be operationalized to perform different functions for the connected whole. While audio might be the core engine from a revenue perspective, stuff like written work, YouTube videos, and docs can be understood as potent lead-generating frontiers.

Another detail to watch would be on the labor front. Specifically, a fairly large stable of Ringer writers and creatives have unionized with WGA East, as Gimlet’s has too. Spotify has a stock response to union stuff, dating back to the March 2019 Gimlet union push, that goes along the lines of: “We’re Swedish! We give great benefits! We love unions!” Which, I don’t know, has always given me Midsommar-esque vibes, but there hasn’t been anything to suggest friction on this matter by Spotify management. For now, anyway. (And to be clear: I’m distinguishing Spotify management from Gimlet management in this instance.)

I’ve already seen some discussion around what an acquisition would mean from an exclusivity standpoint. Would Spotify pull a full SiriusXM vis-à-vis Howard Stern and put the highly-trafficked Bill Simmons Podcast behind its walled garden — perhaps as a direct shot to Apple Podcasts? The long arc of capitalism bends towards that type of power jockeying, but I suspect we won’t see that for a while. After all, most of Spotify’s original podcast portfolio is still available widely. But I do think we’ll see a ton of experimentation, with the Ringer podcasts being the lead guinea pigs. (I also think that a successful acquisition would probably mean the end of Ringer engagements on Luminary.)

Before wrapping this super long piece up, I feel compelled to show my cards: I write all of this as a massive consumer of The Ringer’s podcast content. From that perspective, if the longterm fate of The Ringer isn’t to be an independent, self-sustaining media operation, I’d rather see it be gobbled up by a company that takes on-demand audio seriously than by a more traditionally rooted media conglomerate that would, let’s say, need more time and experience to properly contextualize that business.

I’m going to skip the Apple vs. Spotify angle, but I will, nevertheless, flag that Cupertino appears to be hiring for a role in its business planning team that will be “involved in the day-to-day running of Apple Music & Apple Podcasts.”

Big changes at the BBC [by Caroline Crampton]. The BBC’s director-general Lord Hall has announced that he will step down from his post this summer. (He will then take up the position as chair of the National Gallery.) The reason given for his departure was the desire to have a new leader in place ahead of the BBC’s mid-charter review in 2022 who could then also oversee the renewal process in 2027 (Hall is 68). This follows hints from Boris Johnson’s government that changes could be coming to the BBC’s funding system, such as decriminalizing nonpayment of the license fee or changing the amount people pay.

In an email to staff, he emphasized the BBC’s mission: “In an era of fake news, we remain the gold standard of impartiality and truth. What the BBC is, and what it stands for, is precious for this country. We ignore that at our peril.”

Headhunters will now begin the search for Hall’s successor, with the final decision lying with the BBC board. Favorites to follow him include James Purnell, the BBC’s director of radio and education; its director of content, Charlotte Moore; Fran Unsworth, the director of news and current affairs; and Gail Rebuck, chair of the British arm of book publishers Penguin Random House.

Speaking at an event in Cardiff last week, Hall announced a raft of changes to the BBC’s strategy, especially concerning where staffers are located. The aim, he said, is to move to a situation by 2027 where two-thirds of the 19,000 BBC staffers in the U.K. work outside London. (At the moment, that number’s about half.) A new technology hub employing developers and engineers will be opened in Newcastle-upon-Tyne, and other regional offices will get more staff.

This seems to chime with a similar push from the new U.K. government towards regional devolution, and as I suggested in Friday’s Insider, this could also be a point of negotiation when it comes to securing the BBC’s future funding.

The big story from an audio perspective, though, is that the BBC’s audio platform BBC Sounds will be moving from London to Salford, near Manchester. Readers might remember that last summer the first controller for BBC Sounds was appointed in Jonathan Wall, who joined from BBC Radio 5 Live — a station that’s long been based in Salford.

The Sounds curation team will join Wall in Salford “within weeks,” with other roles to follow, Hall said. He also emphasized elsewhere in the speech that the plan to add non-BBC podcasts to the BBC Sounds app is still going ahead.

Turn on the big light [by Caroline Crampton]. The scarcity of podcast networks is something that I hear lamented often in the U.K. I think what’s meant tends to be in the Radiotopia vein — a collection of disparate shows with some commonalities, gathered together under a recognizable brand name for reasons of collaboration, on both the creative and monetization fronts.

There’s not really much like that here right now, which I’d attribute to both the presence of the BBC and a much slower-growing market overall. While Acast and Audioboom each have plenty of podcasts on their books for monetization, and production companies like Somethinelse are increasingly getting into podcasting, I think it’s still true that there’s nothing with the brand recognition and thematic connections that might earn the status of a major network. And what candidates there are for that sort of label are all in London.

Given this, I was intrigued to learn of a new podcast network in the works in Scotland. It’s called The Big Llight, and it already has two shows in operation, with the official launch slated for mid-February. Cofounder Janice Forsyth — a longstanding arts broadcaster who has her own afternoon show on BBC Radio Scotland — spoke with me to explain a bit more about the venture.

The network’s tagline is “The world with a Scottish accent.” “We want to be bold and ambitious,” Forsyth explained. “There’s just such an untapped wealth of stories and talent in Scotland. If what we make is high quality enough — and I mean the content, but also the audio quality — folk who are just interested in podcasts might listen to us once they know we’re out there. But the USP is we think that we can tap into a big Scottish market.”

The Big Light will kick off with Acast selling their shows while they focus on production, but they also hope to attract their own sponsorships from Scottish brands. (I wouldn’t be surprised if they take their sales inhouse ultimately.) “Clearly, the business model is that we need sponsorship, we need investment, we need advertising,” Forsyth said. “We are approaching and actively talking to a number of different Scottish companies that we think might be a good match for individual shows.” Making podcasts on contract for other organizations is also a revenue stream they’re exploring.

When Forsyth and her business partner, TV producer Fiona White, first started working on this project in 2015, it wasn’t a podcast network they thought they were building. Their idea was for a subscription video-on-demand platform called Stream Scotland, aimed at a Scottish audience. “That was going to be a lovely curated offering of gems from the archive — because at that point broadcasters were just letting stuff sit with dust gathering — and new content too.”

A changing media landscape shifted their thinking. “The broadcasters woke up to what they were sitting on,” Forsyth said, and licensing programs for their new platform proved to be much more expensive than they expected. On top of that, in early 2019, the BBC launched a new TV channel for Scotland, with an evening lineup of fully original Scottish programming (as opposed to a simulcast from London), edging into the space Stream Scotland had planned to occupy. Improving on-demand offerings from both the BBC and STV also prompted a rethink.

Fosyth’s project had backing from the Scottish Enterprise funding agency as well as private investors. “So, long story short, we did a pivot into the podcasting arena, which made sense, especially with me having had years of making radio (and television), plus we had all the research we’d done.”

They worked with a top Scottish marketing agency on audience research and found an appetite both within Scotland and elsewhere in the U.K. for original content from north of the border. (Scotland’s population is about 5.5 million.) They also hope that the global Scottish diaspora will find something to enjoy in their shows, along with general podcast fans.

The Big Light now has its own studio in Glasgow, and Forsyth said they’ve been piloting potential shows for most of the past year. As well as the mental-health interview series and the true-crime show they already have out, there are plans for a series covering crime fiction and a media commentary show, as well as something on “Great Scots” that already has interviews taped with Scottish celebrities like Billy Connolly and Alan Cumming. They’re also open to bringing existing shows into the network and giving them more resources to improve production quality; some talks are ongoing about that.

The big issue for the media in Scotland right now is the possibility of the country gaining its independence from the rest of the U.K. Just last week, the Scottish First Minister’s request for another referendum on the subject was rejected by Boris Johnson, but it will continue to be a live issue there for years to come. While The Big Light doesn’t have an overt political position, Forsyth said they’re keen to host strong opinions from all sides, which gives them a competitive edge over the more highly regulated BBC.

Even without a pro-independence manifesto underpinning this project, there was still a sense in how Forsyth spoke of it of a desire to make something distinctly Scottish for Scottish people, cutting out the requirement for media or culture to be filtered through a London-based lens. “We just want to get on it,” Forsyth said. “The BBC is great and these organizations are great. But it’s just refreshing to be able to do your own thing.”

Forsyth acknowledges the success of this venture will hinge on their ability to find an audience, fast. That’s in part why they’ve spent a long time in pre-production before launching the network, so as to have a lot of shows ready to go.

But I also think The Big Light has aspects in common with the Sony-backed Broccoli Content show that I wrote about last week. Both have realized that, after an election campaign that was very damaging to the BBC’s reputation, there’s a big opportunity for podcasters in the U.K. is to make high-quality shows that can be more nimble, more responsive, and more outspoken. Now it’s really just a case of seeing who can capitalize on that fast enough.

KPCC is launching “Public Radio Palooza,” a yearlong event series celebrating public radio that will be held throughout Los Angeles — and yep, that’s the name they’re going with. The lineup is spread pretty far out across the calendar, and you can find full details here.

ICYMI: iHeartMedia started a round of mass layoffs last week, most affecting small and medium-sized markets, as it attempts to restructure and “modernize operations.” Rolling Stone’s Elias Leight had the best story on this, also going deep on what it means for viewpoint diversity and the culture. This takes place as the conglomerate attempts loudly to barge its way to the front of the podcast story — a bid to shake off its bankruptcy narrative. In mid-December, The Wall Street Journal reported that Liberty Media, which owns Pandora, is looking to increase its ownership stake in iHeartMedia.

Meanwhile, in Vulture: I reviewed the second season of Little Everywhere/Stitcher’s The Dream, and I whipped up a Q&A with Slate’s Gabriel Roth on Slow Burn’s impending return to politics.

On development, strategic and beyond. This segment’s going to be a little different from what we usually do. A few months ago, I was bumbling around LinkedIn — a rare occurrence, given, you know, *broadly gestures* — when a profile caught my eye: one Sofia Klatzker, who holds two curious titles that intrigued me. The first is “Vice President, Strategic Development at 99% Invisible” — which piqued my interest because it’s not really a role I see often at the show level in this business. And the second is “President at Roman Mars Foundation,” because Roman Mars Foundation?

So I thought I’d reach out and learn more about Klatzker’s work, despite there not being a particularly hard news hook. I mean, why the heck not? We jumped on the phone last Tuesday and talked about what goes into the work of leading a popular podcast’s strategic development, what it means to launch a foundation, and what a typical workday looks like for her. She spoke with such clarity and structure that I figured I’d just format this as an “as told to” piece.

But before we get into that, some background to note: Klatzker joined 99% Invisible in October 2018, after a long career in arts administration. She was previously executive director of Arts for LA, a nonprofit focused on building support for arts funding and increasing access to arts education across Los Angeles. And before that, she worked her way up the ranks at the Los Angeles County Arts Commissions, where she ultimately held the role of director of grants and professional development.

Which is all to say she’s a good fit for these roles. Here’s Klatzker:

I started formally working with Roman a little over a year ago when he hired me as the VP of Strategic Development for 99PI and also to head up the creation of his own private foundation. To me, they’re deeply linked, but we’re still in the process of launching the foundation.

The strategic development work, however, has been underway over the last year. What that role means, really, is to pay attention to all the opportunities and partnerships that are available outside of the operations of a weekly podcast. I’m focused on building relationships and developing projects, all to figure out how to bring earned revenue into the podcast so we can make good decisions about how to invest it and tell the stories we want to tell. I should note that I don’t handle the day-to-day business affairs; Roman is still the one taking advertising calls, and being at the front of “What are we doing? How are we selling?” My focus is on: “Where else do we find revenue?”

You know, Roman has been doing this for 10 years, and he gets requests daily from all over the place. It’s overwhelming, and he doesn’t really have the capacity to assess all these inquiries. They would just go off into the river of email and there would be no response. So part of bringing me on is to have someone that’s able to determine what partnerships and opportunities are worth investigating. This isn’t to imply that there are any bad partnerships, but when you only have so much time and resources, the question is: Where do we put our energy? After 10 years of making a weekly show, how do you reach new people? How do you get more people to feel that sense of joy and curiosity? What are the ways that will benefit while not draining the team?

It’s important to note that podcasting, in my view, is both part of a continuum and a response to media in general. We face all the things that all storytellers have always faced, which is, “I am talking to the people who are around me or who know me. So how do I reach people who might be interested? Who would also benefit from being part of the things we’re doing?” Sometimes you have a large platform, sometimes you have a smaller platform, but you’re always trying to reach out farther.

Just this week, we crossed over the 400 million download mark, but in my view, 99% Invisible still feels like a beautiful combination of something really independent and fun. It’s a group of likeminded people who just want to look at the world with curiosity and find meaning in places where you have to look a little deeper, a little harder.

The ethos is: “This is something that’s been designed. Somebody thought about this.” So if you take that up to the larger strategy of the business, Roman and I are saying, “Look, let’s actually be thoughtful about this. What do we do next to expand our reach, or tell a story in a new interesting way, or do something that our core audience will appreciate but will also connect to people outside our platform?”

Our largest partnership last year was with the Guggenheim Museum in New York. They were celebrating the 60th anniversary of the actual building, and we were approached by the Guggenheim itself — they wanted to see what was possible in the telling of the story of the building, not just the exhibitions.

And I think it’s important to note here: I have a background working in the arts, and in museums specifically. I was a teaching artist and worked in arts education at the Museum of Contemporary Art here in Los Angeles…oh, forever ago. So I’m personally aware of how tours and audio tours of buildings have sounded for my lifetime, for 45 years of going into museums. This was a chance to tell the story of a building in a different way, and to expand how to get that story out into the world in a different way, you know?

We presented them with a few possibilities. We told them that we could build this as something that would go out on our feed, which means we get journalistic integrity and you don’t actually have a lot of say in the content. Or we could do this as a committee, in which case it just belongs to you. In either case, it will be Roman’s voice and us investigating the story, but these are our options. They chose — wonderfully and remarkably — to have it be part of 99% Invisible and also release it as an audio guide. So we were able to tell the stories that were emerging through the research that Roman and the team were doing. I think it was a really interesting moment of crossing the lines. It’s a story in a physical space about a physical space, but you don’t need to actually be in New York to appreciate it, and we’ve heard from a lot of listeners that it makes them want to go to the museum. It was something that our core audience could appreciate, and a way to reach more people. [Here’s a link to the episode.]

This is where we can connect back to the foundation stuff. How do we invest back in? And, look, Roman’s not a billionaire, right? We’re not going to be at the scale of a MacArthur or a Kresge, but we do have the ability to reinvest in space and people. So what does that look like?

In a macro way, the intention with a foundation is that, even if you only had $10, you can divide that $10 in a way that you have a “giving pot” no matter what your resources are. (It’s a pretty basic concept of spending, saving, giving. It’s something I’ve taught both my children.) So as Roman has grown and found success, he’s reinvested in his own team of lovely staff — which isn’t how he started, right? It was just him in a back cottage. And so, now, it’s not just about him and his team being able to tell stories about the cities we live in, but to invest in the people who live there to give them a chance to explore their creativity and their willingness to do something in that space. It’s about civic engagement, about connecting to your larger community, and also about investing in this space and place. And yes, we can do that in many different ways, but if we do it by providing grants to journalists, or artists, or for public art, or to rethinking who gets to tell the stories of place and people, that’s huge.

I’ve been talking to designers and universities about what it is that we could possibly be doing together. I’m afraid there’s not much more I can say about that. Part of building relationships is respecting the nuanced moments in building those relationships. [laughs]

What’s a typical workday like? Well, here’s the funny thing. I’m a remote worker, and this is the first time in my life I’m doing that. The office is up in Oakland, and I’m based down here in Los Angeles, so I work out of my house. I also have two small children, and part of working with Roman…well, let me start here: I’ve known Roman since 1992. I really do consider him family; I have an understanding of who he is, where he comes from, and he has that same sense of me. So when he brought up this job, part of the thinking was that he needed someone he trusted who could think a bigger way and see a longer pattern, a larger strategy. And it would also give me a chance not to commute downtown every day so I would have more time to spend with my children.

I start the day with lots of phone calls and emails. Right now, I’m working on a project with Sean [Real], to put out an album of her work. It’s going to be awesome; we’re doing it on vinyl. I’ve been working with a pressing house, so my next call after this will be to find out when we’re going to see a spec print of the album. I’m also working to get a show going in San Francisco for when we release the album. We’re working on a new set of designs for the store, and we have to finish a tote design today, so that’s a thing. Then, around 4:00, I start to wind it down and go pick up my children. We make dinner, and we might play a game of Magna-tiles or something. Then it’s email again around 8.30 or 9.

You know, before this, when I was an executive director, I was working ridiculous hours and really wasn’t seeing my kids. So this chance to be with my toddler and my second grader is a super huge gift. I’m deeply moved to do as much work as I can for Roman, and I think it creates a symbiosis: I want him to feel successful, and he wants me to feel successful. Right now, it really works.

You can find Sofia on Twitter here.

POSTED     Jan. 21, 2020, 11:54 a.m.
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