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June 23, 2020, 12:05 p.m.

A lot of today’s podcast deals look like an earlier era’s music label deals — not, shall we say, “artist friendly”

Plus: Spotify tries in-app podcast ads, SiriusXM acquires Simplecast, and a new Apple Podcasts app is coming to phones.

Welcome to Hot Pod, a newsletter about podcasts. This is issue 263, dated June 23, 2020.

Last week was an exceptionally busy one, with a cluster of stories that sit at the intersection of intellectual property ownership, institutional support, and racial equity within podcasting and media companies. In this issue, we’ll look at two of those in particular — the cases of Another Round and The Nod — but that isn’t meant to dismiss other stories that have popped up, or the fact that these issues of power are longstanding within podcasting and virtually every other media industry.

There’s a lot to explore here, which is why I’m going to stretch this story out across two weeks. In today’s Hot Pod, you’ll get a story from Caroline, about the tension between Another Round’s hosts and BuzzFeed, and you’ll also get a story from Cherie Hu, who argues that today’s podcast deals look at lot like an earlier era’s music label deals. And for next week, I’ve commissioned Kameel Stanley to develop a longer piece that looks at the current state of podcasting and IP ownership more broadly.

Okay, let’s jump in.

The case of Another Round’s archives [by Caroline Crampton]. Negotiations between creators and corporations around intellectual property usually happen behind closed doors — an environment where the structural inequities within any creative industry typically thrive.

But last week, the former hosts of BuzzFeed’s popular Another Round, Tracy Clayton and Heben Nigatu, brought that dynamic into the open when they took to social media to draw attention to the fact that they don’t own any of their podcast’s back catalog. This matter quickly gained momentum when BuzzFeed CEO Jonah Peretti responded to Clayton and Nigatu’s tweets to lay out the company’s side of the story, while celebrities like Lin-Manuel Miranda, Daveed Diggs, and Samin Nosrat lent their support to the resulting #FreeAnotherRound hashtag.

Let’s back up a bit and recall how we got here. An incredibly consequential show during its run, Another Round officially went on hiatus in December 2017. Nigatu had already left full-time employment at BuzzFeed to pursue other opportunities, but still shared hosting duties with Clayton, who at that point remained a BuzzFeed staffer. The podcast later published an update on its feed explaining that the show would not be continuing with BuzzFeed: “Due to strategic changes at BuzzFeed, Another Round is parting ways with the company in 2018. We were surprised and initially disappointed to hear of these changes, but fortunately we were offered ownership of the show. Naturally we accepted.”

An internal memo, from then-BuzzFeed News editor-in-chief Ben Smith, informed staff of this change, noting that the Buzzfeed News audio team — a.k.a. the Podsquad — would be focusing more on hard news and short-form reporting in future, as well as continuing to produce its two remaining active podcasts at the time: Thirst Aid Kit and See Something Say Something.

(BuzzFeed News eventually parted ways with those two shows in late 2018, when the Podsquad was laid off and the company moved to a per-project contract arrangement for any future audio properties. Thirst Aid Kit and See Something Say Something have both resumed production under different models since then — the former with Slate, and the latter as an independent crowdfunded show. Both were given access to their back catalogs.)

Fast forward to June 2020, and this is where the point of contention lies: Nigatu and Clayton say they were never offered a similar arrangement, whereas Peretti claims that the option to license Another Round’s archive was always on the table. In his Twitter thread, Peretti also indicated that he considered this to be a generous offer, saying in a tweet: “Media companies don’t pay for IP and transfer it to employees, but we offered to do it because Ben [Smith] and I both loved the show and wanted to see it continue. You can continue the show, we are not stopping you.”

Full and entire ownership of those archives, as opposed to simply licensing them, seems to be a different matter. There’s more detail on Peretti’s position in this screenshot from the BuzzFeed slack, in which he says that “we have no plans” to hand over full ownership of media created at BuzzFeed, but that he is open to finding a “mutually beneficial solution” for Another Round’s archive.

More insight into this position can perhaps be found in BuzzFeed’s dealings with other creators outside podcasting that have previously left the company, since in that message Peretti also mentions the example of The Try Guys, the popular YouTube act who started out at BuzzFeed before leaving to go independent in 2018. That wasn’t long after a number of other popular video creators, like Safiya Nygaard and Chris Reinacher, had left the company and started their own channels, often kickstarting their followings with millions of views for a “Why I Left BuzzFeed” video that to a greater or lesser extent spilled the dirt on why they had wanted out of Peretti’s company.

It doesn’t seem like much of a stretch to imagine that if BuzzFeed starts handing out ownership of monetizable content created by its employees in some circumstances, it could then be exposed to many more claims of this kind. That’s not to say that’s a laudable attitude: It’s just the logic behind how most for-profit media companies would behave in this scenario.

Since that initial Twitter exchange, Nigatu has confirmed that her representatives are in touch with BuzzFeed; a source at the company tells me: “We’re hoping to meet with their agent in the next few weeks, and we’re open to allowing the hosts to license their back catalog if they wish — on top of transferring the IP. Hopefully this can get done ASAP.”

But the reason this dispute has attracted so much attention is that it feels emblematic of so many other structural issues within media and podcasting. It’s symptomatic of something much bigger that two black women should, years later, have to take to Twitter to resolve what could have been a relatively amiable IP transfer.

Much of this almost certainly comes down to persistent problems of institutional support and trust. Long before Another Round ceased production at BuzzFeed, those involved in its creation said that there was little or no support shown for the podcast internally. The company struggled to sell sponsorships for the show and there was apparently little interest in educating the market for a podcast like Another Round, as one former member of the BuzzFeed Creative team laid out in a Twitter thread.

Clayton has mentioned feeling gaslit by the whole situation — having created a show that was critically acclaimed and externally popular enough to attract the likes of Hillary Clinton and Lizzo as guests, but which was then ended by her own company because it wasn’t “successful” enough. The abrupt way in which BuzzFeed’s in-house audio team was terminated only adds to this impression of a company that didn’t know how to support successful creators who weren’t white men — not least because the vast majority of those producers were women and all three regular BuzzFeed News shows were hosted by people of color.

Peretti has owned up to this problem, saying: “First off you are 100% right about our business team being bad at selling podcasts to clients, and I’d go further and say they were bad at selling content focused on Black audiences. This is inexcusable and cost us dearly. We should have developed those skills.” Belatedly, the company is now working on this, he said.

Another Round is just one show, and hopefully its hosts can reach a satisfactory settlement with their former employers. But the structural problems in this industry that put them in this position in the first place are still very much in play, and there are plenty of others out there who have to fight to address these power imbalances.

How today’s podcast deals look a lot like yesterday’s music deals [by Cherie Hu]. A growing group of podcasters — primarily women of color — are spearheading a reckoning in the podcast industry about systemic power imbalances between creators and the corporations who are increasingly interested in funding and marketing their work.

There is, of course, the Another Round story, covered above. But there’s also the case of The Nod. Last week, Brittany Luse, co-host of Gimlet Media’s podcast The Nod, shared that Gimlet’s parent company Spotify owns 100 percent of The Nod’s brand, with no stake given to Luse or her co-host Eric Eddings. Even though Luse and Eddings are now hosting an adaptation of The Nod on Quibi, they still need permission from Spotify to post new audio episodes to their original podcast feed.

“[The Nod] bears our faces. It’s about the unique lens through which Eric and I see the world,” wrote Luse. “It’s critically acclaimed, beloved, and more relevant than ever. It’s derivative of a show we created before we’d even heard of Gimlet. Do we not deserve to own even a fraction of it?”

These kinds of deals and power struggles bear a striking resemblance to the battles that artists and major labels have been fighting for decades. It’s worth comparing how contracts work in the music and podcasting worlds — especially in the context of Spotify, which is making some of the biggest deals in the podcast industry’s history off of the massive global audience they built on top of music.

In a standard recording contract, major labels like Universal Music Group, Warner Music Group, or Sony Music Entertainment offer artists a cash advance on future royalties, plus extensive marketing and distribution support, in exchange for buying out most of the rights to the artists’ recordings in perpetuity (or, per U.S. copyright law, for the lifetime of the artist plus an additional 70 years). After recouping their advance, artists typically get only a 20% to 30% cut of their sales. Recording contracts also often includes an options clause, in which the label has the right to keep the artist on their roster for up to five total albums — which, again, the label owns more or less in perpetuity.

Such deals were born in a bygone era when the costs of production and distribution around physical music formats like vinyl records were much higher — and when many artists didn’t know any better. Celebrities like Taylor Swift and Charli XCX signed five- to six-album label deals when they were 16 years old and were stuck in those deals for over a decade. (Swift in particular owns none of the six albums she released between 2006 and 2017 through her former label Big Machine Label Group, which sold to artist-management magnate Scooter Braun last summer.)

In recent years, social media and streaming services have given artists more direct access to their audiences, and in turn more leverage in deal negotiations. Many newer artists like Maggie Rogers and Cuco have opted for limited-term licensing deals instead, in which they give a major label an exclusive license to distribute their music for a few years, after which all rights revert back to the artists themselves. It took decades of outside pressure from artists and their advocates for these adjusted deal terms to become more standard; as campaigns like the U.K.’s #BrokenRecord suggest, the fight is still ongoing.

It’s intriguing and unfortunate to see creators in the relatively newer, supposedly more flexible podcast industry fighting for many of the same IP rights, whether it pertains to ownership of their back catalogs or any ownership of their creative work at all. On average, podcasters tend to have more frequent content output than musicians — most shows under Spotify, for example, release one or more episodes a week, whereas a major-label artist might release just one 10-track album a year; limited-run narrative series are the clear exception — implying that podcasters also have more material at stake.

There’s another key difference between major-label contracts and Spotify’s podcast contracts that make the latter feel more imbalanced: the right to derivative works. In a standard recording contract, a major label would own the rights only to a given artist’s recording output — i.e. their singles, albums and corresponding music videos. The artist would typically own all other non-recording extensions of their own brand, such as tours, merchandise lines, brand endorsements, and feature-film roles. (“360 deals,” which give labels a cut of all of an artist’s income streams, are an exception to this standard, but are relatively rare today.)

In contrast, many modern podcasting and digital-media contracts appear to seek to buy out all of a producer’s intellectual property, encompassing the original deliverable and all resulting derivative works. For instance, with The Nod, Spotify owns both the original audio podcast and all adaptations of the brand, including the Quibi show that bears Luse’s and Edding’s faces. (It’s worth noting that major labels are taking note of this diversification strategy and investing more in multimedia adaptations of their recordings beyond music videos, such as Sony Music’s aggressively expanding podcast arm and Universal Music Group’s first-look deal with Lionsgate.)

Over the past few years, Spotify has tried and failed to bypass record labels and build an infrastructure for unsigned artists. They invested in DistroKid, an independent music distributor; launched a direct-upload tool for unsigned acts in the U.S., mirroring SoundCloud; and offered select independent artist managers six-figure advances to license their clients’ music directly to the platform without any third-party help. But Spotify learned the hard way that it’s difficult to gain influence in a business where incumbent corporations already control around 70 percent of the market, and it’s since scaled most of these initiatives back.

By acquiring podcast companies like Gimlet Media, The Ringer, and Anchor, Spotify seems to be aiming to grow into something like a “major label” for podcasts — owning the majority of the market and its most valuable content, while having capabilities across creation, marketing and distribution in-house. As details of their podcast contracts come to light, the major-label analogy becomes even more literal, in terms of the lack of ownership given to some creators.

Ironically, from an IP standpoint, Spotify, BuzzFeed, and their peers operate a lot like the incumbent media players they’re trying to “disrupt.” The exception may be Joe Rogan, who has a licensing rather than a buyout deal with Spotify and, as one of the industry’s most popular public figures, has the leverage to negotiate more favorable terms. We’ll probably see more of such exceptions as we see Spotify sign more content deals with other big names and other powerful media companies.

But as Luse wrote on Twitter: “If your platform isn’t big enough to push back on that, tough luck.”

You can find more of Cherie’s work on her Water and Music newsletter, where she writes about innovation and the music industry. Speaking of Spotify…

This week in Spotify. More content deals from the Swedish audio streaming platform: one with Kim Kardashian-West to produce a criminal justice podcast that will distributed under the Parcast banner — which increasingly appears to be the most interesting of Spotify’s acquisitions thus far — and one with Warner Bros and DC, which opens a pathway for podcast projects to be developed around the latter’s vast inventory of comic book characters.

Both are exclusive deals, as you would expect.

Another development from last week, this one a little more noteworthy for our purposes: Spotify is beginning to test an interactive advertising experience that’s meant to allow listeners to take direct action on ad spots through the Spotify app itself. More specifically, the feature is designed to cut the numbers of steps between a listener hearing about, say, a direct-to-consumer brand’s promo code and actually using that promo code to make a purchase.

The company calls the feature “In-App Offers,” and it’s currently being tested in the United States and Germany with brands like Harry’s, Quibi, and HelloFresh.

This move, of course, should be read within the context of Spotify’s efforts around Streaming Ad Insertion, its big podcast ad tech play. As always, whether this is a good or bad thing depends on how you feel about platform power and centralization. On the one hand, this feature may provide advertisers with better conversion rates, publishers with happier advertisers, and listeners with more products in their pockets. On the other hand, a successful execution of this feature would increase the distance between the podcast publisher and the advertiser: Where previously podcast publishers would either own the relationship with the advertiser or rely on a third-party advertising agency, Spotify would own those advertiser relationships — in addition to serving as the distributor. Which, of course, may commoditize the publisher in the eye of the advertiser, rendering them somewhat disposable in the larger scale of things.

Meanwhile, The Ringer’s issues with diversity get the New York Times treatment in a piece that came out last night.

SiriusXM acquires Simplecast. Here’s the press release; details are scant, but I figured all you finance folks in the crowd would want to know this.

This news comes in the same week that Pandora, which is also owned by SiriusXM, rolls out more granular podcast analytics, which gives more user data like where they live and episode completion rates. Here’s The Verge on the story.

Apple’s WWDC conference took place, virtually, yesterday. No major Apple Podcasts news, other than the fact the company will be rolling out an overhauled app experience with iOS 14 when that comes out later this year. Here’s the 9to5Mac writeup. Apparently it will contain a new personalized podcast recommendation feature. Shout-out to the Pop Up Archive acquisition way back in 2017.

On tomorrow’s Servant of Pod: Avery Trufelman’s Articles of Interest. We talk about her work exploring fashion, luxury, value, and power. Also, The Verge’s Ashley Carman joins me to talk about the two big story threads from last week. Listen on Apple Podcasts, Spotify, Pocket Casts, Overcast, or — as they say — anywhere you get podcasts. Hell, listen in your browser.

This week’s Hot Pod also features a Q&A with WBUR CEO Margaret Low about recent cutbacks at the public radio station; you can find that here.

POSTED     June 23, 2020, 12:05 p.m.
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