Listening to that has made me doubt that we're in the era of "big podcasting."
Here's a quote from Alex Blumberg:
"Just nine months earlier, we at Gimlet raised a big round of funding, 15 million dollars. The plan was to invest a lot of that into making more shows, hiring more people. We wanted that big chunk of money to last for a while: two and a half years. Meaning, we wanted to burn about 6 million a year. But at this meeting, Jim is telling us that right now in early 2018, it's looking like we're going to burn a lot more than that: 10-11 million a month."
He goes on to explain why:
"And that's because 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 biggest issue was that all of their podcasts are expensive and overproduced while the most profitable podcast are unscripted, with interesting hosts. Relay FM isn’t struggling and the most popular Apple related podcasts - The Talk Show and ATP bring in enough money for their hosts to make a good living.
Oh wow, I'll have to listen to this episode! I love when a podcast can go in depth to business going-ons.
Speaking of burning cash, the thing that baffles me about the investment in podcasts is the immaturity of the revenue stream. I'm a heavy podcast listener, but I'm only going to buy so many Casper mattresses, quip toothbrushes, and FreshDirect meal services in a year. It's always amazing when podcast episodes don't even post their promo codes with their episode descriptions. The likelihood that I will purchase something from a podcast episode is 1%, but the likelihood that I will retrace through the episode, pinpoint the ad read, and use the promo code that is also available online from 100 other sources is .001%.
For anyone keeping track, the number of mattresses, electric toothbrushes, and meal delivery services I have used in 2019 is 0.
Wildly assume the number of shows in that list that aren’t being produced anymore (but are still creating revenue) is equal to the number of shows they’re currently paying to produce, but haven’t released.
How do you spend $4M+ every year per podcast?
And not to take anything away from them or their valuation—the ongoing value of the library they’re creating and IP they can license is huge—just want to understand the expense side.
I mean the same way any big company blows unfathomable amounts of money. Too many people doing too little (or doing the wrong things), paying too much to consultants/outside agencies, thinking the money will never stop flowing.
>And some of our biggest shows, with the largest audiences, still weren't making money because we couldn't sell ads on them.
Maybe I'm just thinking about this whole thing in too simplistic a fashion, but if the content is such that you can't make money on a podcast, why exactly are you spending money on producing it?
Many of the bigger German podcasters earn finance their podcasts entirely without ads by their listener’s contributions. The podcasts are usually people talking about topics they really enjoy with people they like.
Why do people do open source software for free at times?
It's an interesting episode, and I've really enjoyed the previous Gimlet seasons' candor. He discusses part of the solution in that episode, though. Many of the really huge podcasts have much lower production costs, because they're just a compelling host (or small group of hosts) and they don't take a ton of time or money to make.
He also mentioned that its hard to compete on cost. The podcast audience is still growing, but its hard to compete on cost when Gimlet's series tend to have very high production values, often involving a team doing research and information gathering for months before releasing a season.
Meanwhile, theres been a lot more big podcast that basically just bank on the personality of the host (e.g. Joe Rogan's) that can pretty much cost nothing to produce, and can churn out episodes after episodes talking about random stuffs.
Bummer though, coz I enjoy Gimlet's model of podcast a lot more.
Listening to that has made me doubt that we're in the era of "big podcasting."
Here's a quote from Alex Blumberg:
"Just nine months earlier, we at Gimlet raised a big round of funding, 15 million dollars. The plan was to invest a lot of that into making more shows, hiring more people. We wanted that big chunk of money to last for a while: two and a half years. Meaning, we wanted to burn about 6 million a year. But at this meeting, Jim is telling us that right now in early 2018, it's looking like we're going to burn a lot more than that: 10-11 million a month."
He goes on to explain why:
"And that's because 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."