The Vergecast - Luminary and the podcast wars to come, with Nick Quah and Ashley Carman

Episode Date: April 30, 2019

The Podcast Wars are coming. After Luminary’s troubled launch, The Verge’s Nilay Patel and Ashley Carman sit-down with podcast expert Nick Quah of Hot Pod to discuss if Luminary or anyone could be “the Netflix of podcasts” and where the industry is headed. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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dropping May 14th. Tap in with us. Hey everybody. It's now from the Vergecast. On this week's interview episode, I actually have two guests. I have Verge reporter Ashley Carman and Nick Kwaugh,

who writes the Hot Pod newsletter. We're talking about a big controversy in the podcast world. It's an app called The Luminary that came out. They want to be the Netflix for podcasts. Have you pay for podcasts? They launched and then immediately

huge shows started pulling out. So the Daily from the New York Times, all of the Gimlet Media shows. like Plyol pulled out, Joe Rogan experience pulled out. They don't want Luminary to stream their shows in their player. And the reasons why are super complicated, extremely wonky, and surprisingly emotional. So I had Ashley, Nick, join the show, explain what is going on with Luminary and what is coming and what I'm referring to as the podcast wars. All right. I've got Nick Kwa here.

How you doing? How's it? How is. And Ashley Carman's here. So you two, Nick, you write about podcasts literally every day basically with Hot Pod. Unfortunately, yeah. It's a real thing. Ashley, you've been writing a podcast for us for a while now.

This is a little bit of a meta conversation because it is a podcast. True. It's going to be a podcast about podcasts. But there is technical controversy going on. There's creator rights in the mix. Beautiful. There is the spirit and ideals. The podcast is a medium.

There's a little bit of the open web thrown in there. Sure. It's a spicy brew. And so I think it's a Vergecast territory. Here's the controversy. As near as I understand it. Yeah. There's a company called Luminary.

I don't know if I have to disclose this, but I'm going to just say it. One of the people who works at Luminary is a guy named Joe Przicki. He used to work at Vox Media. That's it. That's the whole. There's no other. But Joe works there. He's a person I know.

So I was very interested in Luminary. Luminary is what? It's a paid, is that how they describe this? A paid podcast app? Well, it officially describes itself as the Netflix for podcasts. At one point, I had tried to be a controversy to begin. Right.

At one point, I offered to describe it as Netflix for audio, but I was corrected to say it's Netflix for podcast. which is to say that they are looking to build a paid podcasting platform at scale. Okay. Which differs from, say, something like Stitcher Premium, which is a sort of paid podcasting site business for the Stitcher app. And it differs in something like Audible, which is an audiobook company. That's primarily a platform.

So they offer up, you know, $8 a month. If you pay $8 a month, you get access to their original suite of programming, which includes stuff like Trevor Noah has a show. I think The Ringer has a couple of spin-offs. they're doing for them. And also, what we learned last Tuesday when you officially launched is that it would also be including a free tier, which is to say that it would essentially double as a normal podcast player on top of this sort of paid closed platform.

And therein lies a complication. I just want to be clear with the audience. Ashley and I think this is the beginning of a podcast war. And I've only gotten you as so far as like podcast skirmish. Yes. It's the Grenada. I don't know. So I think the, I do think a podcast platform war is coming.

Absolutely, 100%. There's no way in which the podcast industry or ecosystem can continue to grow, can continue to become popular in the mass power without there being power conflicts. I just feel like nobody in the podcast industry has sufficient enough power other than Apple to say the call this a war. This is kind of like a couple of kids in like a street corner kind of slabbing each other. Yeah. Podcast super soker fight. Right, absolutely.

All right. So Ashley, I unpacked it that you've used. the app you wrote about the app when it launched. Unpack what you like free. It's literally just a podcast player. That's all it is. Yeah, it's a podcast player. The fact that they keep calling a free tier to me suggests they're doing so much more than

just putting on a podcast player. They say that they've invested like very heavily in the design behind it. So really they want you to be able to play everything you'd want, all the access from the home page. So typically on a podcast where you have to like go to your shows or like see what's new. From here you can continue re-listening to an episode where you left off or they have all the new episodes right on the home page, curated suggestion. From a product standpoint, I wasn't like, this is revolutionary.

I don't know. You've used it, Nick, right? Yeah, I've used it. And I'm like, of course, like, I'm interested to see the actual value proposition here, which is the original era. And I think this entire sort of attention to the free tier and its various controversies, it's kind of taking away from the fundamental question that this company's trying to answer, which is, well, can there be a Netflix-style platform or product solution for on-demand audio that covers podcast like programming. And I don't think we're anywhere close to like actually beginning to answer that question because of all this controversy. But at its core, it functions like a podcast distribution app. Like there is a layer to it in which you can use

it exactly the way that you would use overcast and Stitcher and whatnot. It's just that that was not, that's not the point of the product. The point of the product is the other stuff, like the stuff that you pay for. The eight bucks a month for. Exactly. And you see their shows really heavily promoted on that homepage. Every Luminary show has a little badge that has the L on it. So you know it's a luminary exclusive. You won't be able to access it unless you're a premium user. And that's, again, where the controversy is is because these shows that are traditionally free, it gets into marketing of like, they're the funnel and they get people to come into the podcast app with the promise of those free shows. And eventually Luminary could try to upsell them or convince them to pay to access

those badged shows. Yeah. If you are an old person like me, you step back and this looks, like a very classic Microsoft move, a very classic Google move, which is Microsoft puts out Internet Explorer, and it's like, here are all these keys to Microsoft services that you want to use. Google puts out Chrome. You can access the web. People think Chrome is the default web browser, but it is heavily, extraordinarily tied into Google services.

So this is a pretty classic strategy. We make the best browser for the free stuff, and we use it to drive you towards our paid stuff or our services. Right. Why is this so controversial? The way to understand it, there's sort of two layers here to sort of unpack. The first is this entire conversation about licensing agreements. So the initial wave of publishers have pulled out,

Spotify, the Daily, and now... We should make that clear. Right. So Ashley wrote the story. Luminaries out. You can get it today. And like the night before... I think the Times in Spotify said we're not letting our podcast go in the free player.

Right. So the daily won't... You can't listen to the Daily and the Luminary Player. You can't listen to Reply All. The New York Times has some shows. Just not it's like the daily is the New York Times. Exactly. It is the money maker.

And the other podcasts, well good and excellent. That's not why the sensitive business aspects of the audio business in New York Times is. And so the conversation from my sources in layers of this sort of debacle intimated that it was a largely preemptive measure because they had interpreted luminary as using their podcasts as essentially the top of the funnel to drive a business that could ultimately be complicated if successful over the long run. Complicated for the ecosystem

and the business as a whole. And so traditionally speaking, third-party podcast apps can aggregate and distribute free podcasts when the open publishing ecosystem without a licensing agreement because it's a general sort of

cultural norm agreement that like, on one hand, everybody wins if this podcast app becomes more heavily used because it just means more people listening and everybody gets data that they want. And also like the manner of monetization

isn't like in conflict. And so that brings us the second way that have heard this situation being framed, which is it's the difference between mutualism and parasitism. Luminary is interpreted by some to be using free podcasts in order to grow a business that would not directly or proportionally bring benefit to the podcast that it were aggregating without licensing agreement or without any explicit permission. And that's different from any other podcast that would aggregate open podcasts in which their success also means the success of those podcasts. And so that's kind of the philosophical tenets of this. And so that's kind of the

philosophical tenets of this situation, Luminary would argue that their free tier also would benefit free open podcasts, but there are complications around the technical aspects that undermine this argument. There was also a sign bunny meme suggesting an anti-ad stands a couple weeks ago

that also undermines this argument. And so it's just a shitstorm. And it's a shitstorm that feels from the outset, and you can tie it back to just a lack of proper preparation or outreach to the community. And so there's a way which you could read this as like a territorial squirrel, but not a war.

Yeah. So since the New York Times, Gimlet, Parcass, all of them, that was launch day, or the day before launch day. Then Nick, you reported that Joe Rogan pulled his show. Right. And Joe Rogan, obviously, huge, I mean. That's thought to be the most downloaded. Yeah. Yeah. Like, Joe Rogan in the Daily, I'm like,

podcasting, done. Right. He pulled his show. Then we have Stitcher pulling its shows. Yeah, that was as a Friday. Yeah, that was over the weekend. Oh my gosh. I should actually just pull up the full list.

There's so many. It was a bad week. Yeah, there was so many. I can't even know. ArtHard Media is gone. Endeavor Audio is gone. Podcasts, one is gone. Barstall Sports pulled out midweek.

Yeah, Barstall Sports is really bad. I heard of it a weekend of PRX. It's also going to pull. PRX governs Radiotopia, Gen Z Media, and Nine Veil Presents. So it feels like a coalition that crosses a bunch of different categories. So it's not just a bunch of big corporate publishers, you know, flexing muscles. There's also now a sort of diversity in the pushback, which kind of makes this a little bit more of an interesting situation.

Well, and what's even more interesting as far as the diversity of pushback goes is Stitcher owns Midroll, which is like independent podcasters can use Midroll to get ads if they don't have a full ad team. And Midroll has said that they're encouraging podcasters to pull their shows from Luminary and that essentially, you know, they're available to help maybe facilitate or whatever, like be part of those conversations, which is a whole other layer to this because still, even though it's diverse, it's all big shows. Right. And it covers a big constituency. Obviously, we don't know the full size of the podcast system which large, and we don't really know a full size of percentage here, but it feels like it's past critical mass that this has become a fundamental problem at an almost an existential problem for the free tier. So there's the first bit, which is we don't like Luminary. They're a bunch of jerks. They're taking our podcasts, which we give out for free, and they're using them to support their paid service.

And also, Luminary is like raised $100 million. Right. That's the big thing. Like there's like a lot of, there's like some envy in there. That all seems like kind of emotional. But then Ashley, you reported on a bunch of extremely kind of controversial technical moves that Luminary was moving as well. Oh, boy. This is the big one.

If there's ever a podcast talk about the RSS standard? This is the one. Did it go to the differences between caching and proxy servers? Basically, yeah, it came out that Luminary is using a proxy server. So traditionally when someone gets a podcast, like, verge cast or whatever. If you're listening through Apple Podcasts, Apple Podcast

pulls that show from the servers that are hosting platform, basically. Megaphone. So in Luminary's case, what's happening is when someone asked to play Vergecast, Luminary is pinging its own servers

and then its own servers are pinging megaphone. Which is the proxy, right? And that is a huge issue for the industry. It's like existential because you can't, there's so little data in podcasts.

Exactly. That's what's so sad about this. So, yeah, so basically, because the proxy server was pinging, creators weren't getting the IP addresses of their listeners, which is so funny that everyone's, like, you know, so upset over

IP addresses, but that's pretty much all they have. It's literally, it's not like Facebook where it's like, let's target down to the, like, minuscule eye color that these people are. Please sign up for advertising using the promo code, promo code. Please, it's the only way they will know that this ad was effective. And it's especially

important because going forward in the industry, ad tech is actually a hugely developing part of this world. And, And when you don't have those IP addresses, dynamic ads, a lot of them are geo-targeted. I don't know what percentage, but whatever. It's a big part of the industry. And when you don't have those IP addresses, you can't geotarget. And actually, the IAB, the Interactive Advertising Bureau, has standards around podcast advertising,

trying to really make this a thing. And the data that they were getting from Luminary, any hosting platform, would have to throw it out. Because IAB specifically says if the IP address you're receiving, comes from a server, not a real listener's IP address, you have to throw that data out as like bot data, and it is trash. So not only can they not properly target ads, but also those listens basically don't count.

You should also talk about a show notes thing. Yes, that is... So in addition to... Everyone knows all the contrary to... Well, this is a big one too. This is, I think, I would argue, it's bigger because it kind of undermines any fundamental argument about supporting non-big publishers.

So in addition to the... proxy server and the sort of technical fracas. Various podcasts were also finding that Lumet was altering show notes of their podcasts that was the on platform. This includes removing external links. And this is a problem for a lot of, especially independent smaller podcasts, because independent small podcasts rely on links to direct donation campaigns and or sponsored, like sponsored websites as fundamental parts of their sort of revenue guarantees. Like they rely on people finding those sponsor links and seeing those links. Because, you know, you can track. way easier than a promo code is a click on a link.

100%. Luminu has since, like, altered or made adjustments or have said that they made adjustments to the proxy feed aspect of this, but they seemingly doubled down on the fact that they're getting me enough external links. They called it a security issue, which I thought was a choice. They call it a security concern. And it's, you know, it's one of those things where

if you've been around this space long enough, you kind of go like, you just kind of look around it. Any other three-party podcast set? Like, this hasn't really been an issue. That I think... Yeah, because links on the internet are... They are fundamentally a security concern, but they're also links on the internet. Yeah. It's very confusing.

And this, I think, so if we're going to look at it from the brass taxes of like, you know, this is what they're doing, this is the things that are in violation of. Like, you can kind of go down a list at just a bunch of things. But the sort of bigger game here is just the nature of trust. Yeah. And it feels like every single small misstep kind of all kind of clumps together in just this big picture of like this company just doesn't feel like they know what is going on and what's important in this. space and what's really relevant to the people, the contingencies, the contingents that they should be trying to win over. And it kind of lose back into the whole licensing agreement thing, which is like, just didn't

feel like they do it in any outreach that felt meaningful or two-way. It just felt like, we are here, you're colonial saviors. Let's see what's up. And it's just, it's really just bizarre. What struck me, this conversation breaks down along two ways, right? There is, technically you're supposed to license the RSS feeds, but no one does it. Yeah. And Ashley and I talked to some independent podcast app vendors, and they're like, we don't want to talk because, like, we live in this gray area, right?

Like, we don't want to raise our hand and be like, you should do this and that because then someone might notice that we need it. So technically you're supposed to do this. But no one does it because the podcast ecosystem has developed its values and norms. And then there is the fact that the other side of the podcast business has rapidly professionalized to the point where there are IAB standards about IP address tracking that, probably only Vergecast listeners care about knowing exist, right? And are people who make money up. Yeah, there's like the, but like in terms of like a consumer audience, yeah, I'm pretty sure our show is the one place where you can be like,

there's IAB standards for IP address tracking. But like the normal consumer doesn't care about that at all. Like not even a little bit. It's executives. Yeah. But so like that's a rapidly professionalized side of this. Whereas the consumer facing side of the podcast business for so long is like, anybody can just start a podcast app.

And you can like win and you can like have a better interface and you can be the person who invents speeding up the audio 3x without adjusting its pitch right and that's like that's a way to win and and that bifurcation seems like luminary got it wrong on both sides. Absolutely. Like they didn't have the sort of emotional community expertise to go and participate there and they didn't have the the business expertise to understand how the ad market worked. Right. And I kind of don't understand how they had so much money and smart people like I, I know. know some of them. Right.

You've interviewed the CEO Matt Sacks. Right. They don't seem like they're totally confused, but they just missed it. The proxy server thing is wild. Like that. You have to engineer that. That's a choice. Yeah.

Like that, I would love, I mean, love to know the conversation that happened there. It feels like a fundamental breakdown on all levels that's support on a technical side, on the sort of business development and legal side. And then there's also just like the plain strategy side of this. I argue and I continue to think, they don't need a free. tier. Like, this is an un- unforced error. Really? Like, I think their bet is

truly the aggregation. Like, truly their bet is, I think, what everybody thought the bet was going to be or is right now, which is, we're going to rely on the popularity of all these free podcasts to be lead generation and to bring people into the funnel, and then eventually that's how we're going to build our base. You know, anybody who spend more than six months kind of really listening

to the podcast community can tell you that's a political like mine. That's just like not something you do. But also, like, if you're going out to build a business, that pretends to be the paid podcast platform, that pretends to be at the Netflix for podcasting. There are precedents for on-demand audio apps that people pay for. Audubles and a good example of one,

HitSpace, which is like a very specific meditation, like audio experience app. There are lanes in which you can truly experiment, that you can truly use $100 million in venture capital to, like... They're olderly. Serious XM exists. Absolutely. And Sirius XM, like, the story around that is like they essentially had Howard Stern

and like really locked down one major star. and it just worked from there. So there are precedents in which, like, there are businesses that you can build that lane. You don't really need the free tier. And it felt, like, just from strategically, like, this was an unnecessary lane to explore it. And now you kind of set yourself back a couple of months, I think,

from the sheer, like, political poison of this. Knowing what we know now, if you had to redo it, it seems like the first thing you do is you'd say, we'd made the best podcast player, right? And it's a good member of this ecosystem. and we have one show that you can pay a dollar for, right? And like, we're just going to try. Like, we're just going to make the best podcast player.

That's what our engineering talent is here for. And then over time, you, like, add another show. Exactly. And another show. Get a foothold. Right. And you're like, we're in the ecosystem. We just want to make a really good podcast player and do some pay.

And you'd start much more humbly. Right. Yeah. But they came out guns blazing. And, like, to Nick's point about potentially just being an exclusive platform, all their marketing materials are around. the talent and the shows that they have. And unless you're someone like us or who listens to the Vergecast and you know about Luminary

because you really follow the media business, I think most people are only going to find out about Luminary because they see those billboards and they love Trevor Noah or whatever. They're coming for that reason. And yeah, I agree with you where it's like if that's going to be your whole marketing message anyway, like Spotify advertises various shows on the subway, not just their own. They're part of the ecosystem. Right. And so, yeah, I think going that exclusive route could have been.

But one thing I would like to add, and this is the thing that really gets me, is that, like, there is a lane for Luminary to win. And there is, like, a very real use case that a paid podcast platform can actually be beneficial to the entire ecosystem, which is the simple fact that, like, there are some shows, there are some show types and show structures that is simply not efficiently monetized on the open ecosystem. Most notably, the genre that most, like, casual podcast systems is love, which are short run, limited, like, limited series. stuff like, I don't know, like slow burn, which is eight parts. There's only so much you can monetize for something that's not ongoing and weekly and has like various levels of advertiser trust and reliability to. There's so much potential to build a business that like you can go to these publishers which are really, really worried about how they can compete with Celebrity German podcasts,

with biweekly podcasts, by daily news podcasts, because they make beautifully crafted 60-minute experiences. there's a way to build a coalition here. It just felt like either they didn't have enough trust in that or it's just something that they did not see. It feels like a little bit of a waste. All right, we're going to take a quick break. We're going to have an ad with a code

so you can track it. We'll be right back. Support for this show comes from Shopify. Every thriving, successful business has to start somewhere. A good place to start is a relatively simple question. What if, given the right tools, I really put my all into this. One tool that can help grow your sprout

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Both of you, please. If you look at TV, there's free over-the-air broadcast TV. It's wantedized by commercials. There's cable. Now there's all the premium streaming services. That market fragmented into multiple different options, multiple different business models, multiple different price points. Why hasn't that happened with podcasts, which are a much older sort of form of internet media distribution?

Why is it, why does it look the same for so long? My interpretation has always been a sort of just a lack of, this might be a bit damn thing to say, but it's like a little bit lack of a creativity or innovative ambition and a part of the business class in the podcast industry. It feels like the trend of the podcast executive is to like really double down on trends that everybody else has seen, which is why we keep seeing true crime podcasts, which is like why we keep seeing this sort of double down on the Hollywood adaptation IP pipeline. There is a lack of true like business model innovation from the like the, investor like the investor money class of this. And I think if we're going to ever see real sort of price-point innovation or real business model innovation, it's going to come from the layer that

requires some investment money. We see a lot of organic innovation as far as like independent podcasters go. There's a lot of really interesting innovation around Patreon support networks. There's a lot of really interesting innovation around live events and sort of like book publishing and that kind of stuff. But on a fundamental, how do you get, how do you connect the class of casual podcast listeners and potential podcast listeners to podcasting as a whole. There isn't a ton of that from the ground out. We're going to see that

I think from the increasing participation of established platforms like Spotify and Pandora. It feels like that is the only way for it and that's the only way that we're going to see this play out which is not necessarily good for the ecosystem as a whole. But I understand why there's a lack

of it from anywhere else because I guess nobody will do something at risk or nobody really wants to like plant up flag or die on the hill a podcast. It's just not a sexy place to die right now. I mean, it's right. Actually, look at us. I think, we're like 25 minutes into like technical podcast.

This is, I guess it's like the NBA in the 50s. Nobody gives this shit. They just like only want to watch baseball, you know. Well, that's a great answer because it leads, I think, right into where I think the war is coming from, which is my version of the why isn't like TV answer is all of those TV companies have their own distribution, right? So like literally brought, like NBC owns antennas in the world and they control a massive distribution point. Cable companies, they sell to other cable companies.

It's a massive distribution point. Netflix is like, here's an app. You actually want this stuff. We're putting it in our app. We own this distribution. Podcasts for the longest time have had one distribution point that mattered, which is Apple Podcasts, which is I would describe it as a lumbering sort of organization that hasn't really pushed innovation and distribution. and stuff. And so all the other business model innovations require new distribution. And I think it's

only now that you see Spotify getting into the game. You see Pandora getting in the game. You see Luminary getting in the game. The idea that this market will fragment has like appeared. Is that your read on it? Yeah. I mean, I think because Apple had the majority of where all the listeners were coming from. And they were the winner. And that was that. And it was like, okay, we know like Apple's going to do what Apple's going to do. They don't care. Like, okay. But now with Spotify, I think, having such a large portion and the ability to bring

podcasts to so many more people, yeah, that's why we're going to start seeing more, more wars. So why do you think it's, you think it's, you think it's opening. You see, you don't think it's happening now, but you think it's inevitable. Yeah, I don't think we're dare yet. By the way, to describe what I specifically mean is the war. I mean. True fragmentation. True fragmentation, where you have to pay eight bucks a month to Spotify to get these four shows,

eight bucks a month liminear to get these four shows so on and so forth, just like you have with TV. Right. So my sort of formula here is like who has power, right? And right now,

so historically speaking, Apple has had power. You could argue that they came upon that power inadvertently that the rise of podcasting was a large part just something that was not expected.

It happened simply because a large kingdom did not really tend to a specific plot of land that they owned. And then when they saw a bunch of little like folks coming up and like building like planting little seeds here and they kind of let them go.

And then it was allowed to flourish in a really interesting interestingly balanced way. They didn't change the way. I'm going to run with this metaphor. They didn't change the way that the land was irrigated. They didn't sort of improve certain conditions about the land. But they allowed this place to be sort of essentially be a free space. And so there is there is a kind of power that comes from their impartial position. And so for the longest time, year over year,

it was a genuinely slow but reliable growth, specifically within the Apple ecosystem. Maybe there were smaller fiefdoms with other third-party apps like popular ones like Stitcher or overcast or downcast or whatever. But largely, when we think about the people who are trying to make money and build companies in a podcast space, the primary player of distribution

that they had to sort of really think about is Apple. And they don't really have to think about a lot because Apple has a certain set of rules. There's a couple of black boxes in the way that it works. But it sort of engendered a certain culture that feels like whatever happens, it generally feels kind of fair, even if I look at a charts and it kind of go like, what the hell is out with the charts? Generally speaking, because no one publisher had direct relationships, there's no real conscious way of that you can be able to game

this system, there's a sort of a leveling of power. You keep the top low, and a lot of people can sort of benefit from that. It's also they also offer virtually no data. Absolutely. Which I think is a huge piece of this. Yeah. And, you know, I hear a lot of grumbles from podcast executives that this is a bad thing. but I think from just the way it's an organic system works, it's an artificial limiter that's allowed for a certain kind of balance. As long as no one person is able to become more intelligent as the other through the structural means, everybody is on the same level playing field.

But we cut to the present, which means that we are living in a post-2014 society, which is to say a post-serial, a post-startup, a gimlet startup, a post-I-Dir-Dir-Jon, there's like a ton of investment interests and moneyed interest now in podcasting, which then brings in, you know, Apple-level competitors. We're specifically thinking about Spotify.

We're specifically thinking about maybe Pandora, though we haven't quite seen how they're going to play out yet. Spotify sees an opportunity to diversify their assets, which is to say to move away from music and to create another line of business and become an all-consuming audio company. This brings us a position where we could see Spotify growing the overall pie of podcast listenership,

but also developing power that could end up attracting certain podcasters to work away from the Apple system to allow to sort of force Apple into a certain amount of changes to fundamentally complicate and restructure the way we think about Apple podcasting, where we think about the podcast ecosystem and also its norms. So that is not exactly a future that a lot of people looking forward to, but a small number of people who consent to make a lot of money out of this is looking forward to this. I don't know where personally land on this. I think my rule of them has always been as long as there are more people in the world listening to podcasts, as long as there are more people that can work in

podcasts and make money of it, and as long as there's more money coming in, we generally should be fine. But the question is if this is going to be a straight-up oligopoly, which are a couple of small, a couple of big platforms smashing against each other, or if Apple's going to hold position and just say, we're going to like, we're going to tend to the opening ecosystem. That's a perfectly acceptable and a perfectly good lane, but it's not necessarily within Apple's business interests over the long term if what we're looking on the TV side and music side sort of holds true and kind of convinces them otherwise. Especially as Apple reinvents itself as a subscription.

Yeah, which is the real complexifier here to use business term. You know, it feels like we're moving to a completely different phase, but we're not there yet because Spotify does not have sufficient power yet, I think. What's your read, Ashley? Well, I'm just trying to think of how ad tech actually plays into these sorts of decisions, because like Spotify, so Spotify's opt-in. People can insert their own RSS feeds, and you allow Spotify to ingest your RSS feeds.

So it's not an, it doesn't run on RSS at all. But when you opt in, you say, okay, you are giving me access to millions of people. Also, I'm getting a really robust analytics platform, unlike any other analytics platform. Like Apple's starting to dabble. And I'm just kind of curious, like, Spotify's looking into ads. And like, I don't know, there's a world in which Spotify is. an ad network and starts really making money for podcasters with the catch, let's say, that your show has to be a Spotify exclusive.

And I feel like that is where the motivation is really going to come in for people to start withholding shows, start making decisions about where not to populate. Because right now, with Luminary, Luminary doesn't have anything to offer. It's like, what do you, you can give me a few thousand listeners, which I don't even know what you're doing with my show. Like, I have, you were using a proxy. Like, I don't know, what's going on. And Apple, I mean, you see the players, some of the podcast players, doing like tips and things like that where it's like, okay, trying to give podcasters the ability to monetize in a way that's different from ads.

And I guess I'm just thinking through, like, Stitcher has mid-roll again. It's sort of basically like an ad network. How ad networks are going to actually really influence the industry and where people make decisions to put their shows. I think what we're going to see is that increasingly the ad network or ad tech layer is just going to be the platform layer. There used to be a sort of a layer of companies like, you know, panoply, that just the advertising relationships aspect of this, I think as the other platforms sort of force everybody into an arms race over monetization, that's just going to go away and get ingested.

I think the other X factor that we should really sort of consider is like, I'm not so sure if there are enough hits to justify a sort of a balkanization yet, right? So I think if the past 16 months has been kind of weird for podcasting, that hasn't been any one show that I kind of feel like was a world ender, like a world beater. The last one, maybe, maybe was the second season of Slow Burn, where, like, I talked to ordinary humans that have not really heard about podcasts, talk about that podcast. I think you can't really drive a paid business unless you have, like, a genuine capacity to make hits. And there isn't a single team other than the people of this American life, I would argue, that can reliably

create hits. I think largely because, like, we're very early in this particular version of radio is a creative medium. We can see this little bit of people. parallels elsewhere, right? Like, why would you subscribe to HBO so I could get The Sopranos, so I could get Deadwood? Like, there has to be that class of creators. We're not there yet. And the ones who are celebrities benefit more from being open ecosystem people, like Bill Simmons, like, you know, people who are like Derogan who are weekly or daily.

Nilai Patel. Like Neilie Patel. Sitting right here. Business isn't a personality. So you're blaming it on lack of creativity in the form rather than terrible discoverability. Blaming it? I'm suggesting that this is This is a real This is fundamental to why people would pay for anything

Because there is something that I just cannot live without Like the reason why I would go out to a movie for the first time In a long time is because like Avengers Endgame is happening But how many like there are only so many Places that can produce that kind of event And I think that is the layer that we're not quite seeing And that's the layer that I think we need in order For this sort of Balkanization to truly happen

When I talk to people, what podcasts they listen to, they say, like, The Daily. And the Daily is great. I think the Vox show today explained this better. I'm contractually. I'm aligned at the CVC's Fred Brider. Largicketts is not America. But, like, those shows, and both teams are very good, but Sean is better.

Shout out. He's my boy. I send him an email shirt. Now he's like, my boy forever. They do the same job, right? And they can do them in better or worse ways. but the job they're attempting to do is the same. And I think so many shows, podcasts in particular,

are all kind of doing the same job. Yep. Right? And once you try to elevate past doing one of the four or five jobs, you might as well just make a TV show. Absolutely. And it feels like where a lot of podcasters want to go. And I think that expansion of the creative form

is like the real big question. Luminary is going to pump $100 million in this ecosystem. What are they going to make that you can't actually get for free? That's 100% great question. No one as far as, I can tell, like, knows the answer yet. Because everyone is, like, throwing their luminary app, like, into the ocean.

But the secondary question is that, like, who would you hire to make that decision? Like, who is the visionary class here? And, like, this is this community, this version of podcasting community has only been around for, like, five or six years. And a lot of them are aged up through, like, the public radio system or

the comedy world, and then have subsequently left to do their own things in television, whatever. Like, the incentives here, the incentive of structure still doesn't quite make sense to generate world enders, you know, like real experiences that kind of stops time. And that's the thing that will make me throw my wallet into the ocean. And that's the thing that's why I'm really here in this sort of business for it, because like I'm really looking for it and really curious how that happens in the space. It just feels like, I think, I'm not so sure the incentives online just yet. So we'll have to

see. Isn't that person just an algorithm? That's the conversation. I mean, I asked Luminary when I met with them before my piece. I was like, you know, because during Hot Pod, they were hyping up. They're going to have all these amazing shows. In my mind, I was like, okay, I don't know what they're going to throw out there. I mean, it could really change the game. And then they're like, oh, it's Manus Amoroti, Guy Raz. It's not that you have gotten before. Yeah. If you had asked me to pick a podcast network, I'd be like, oh, yeah, here's the biggest podcasters. Let me build my network with that. No offense, the guy or Manuish wonderful people making great job.

Yeah, but like it was... We're like saying their names but like preemptively apologize. I mean, it was just an obvious, duh, you want to build a big podcast, get the big podcasters. So I was like, you know, where are we going to see you shine

as far as bringing new creators in? And I think they think data's going to be a big part of that. For now, it also seems like they're betting on like celebrities, right? Bringing in Trevor now. Yeah, but the next stage. And I mean, I'll be interested to see how Spotify does it too. Like, you have to think,

data is already influencing their acquisition. hire what they're buying. Parkast, they literally send the press release. People like true crime and horror. We bought a network that does that well. Like, they set it in the press release. Is it data-driven, though? I mean, you could guess it,

but I believe that they wouldn't buy that if they didn't see evidence of it on their own platform. And I think the one thing that is tough to qualify for is that sometimes shows succeed because you just really like the hosts or like the host. 100%, yeah. Just have some kind of chemistry.

I'll watch a certain movie because Brad Pitt's in it. Like, it's a normal everyday. dynamic. For sure. And that is why I don't know if you can qualify a show necessarily. Like I don't know if the data can do it all. I think, I definitely think that's

part of the strategy. And stars also sometimes make bad things. Stars often make bad things. Right. In host chemistry. Brad Pitt is not actually a reliable indicator. Absolutely not. Actually, in particular, Brad Pitt is not a reliable indicator. Shout out to Brad Pitt. We don't have to apologize to Brad Pitt.

We'll apologize. Okay. So actually, this is my last big question. We've talked about a lot, but I think this is kind of underlying it all. Right. The emotional sort of tone of the industry right now is summed up is like this John Gruber headline, which is all podcasts are shows, but not all shows are podcasts. 100%. And that is tied deeply to distribution, right? You're only a podcast for real. If you're distributed over RSS and any player can can pick up your feed and listen to your. show. Personally, I think that is bonkers. It's like me saying, all articles must be printed on paper. I don't think the distribution and the medium, I think they inform each other. But they're obviously separate, right? And so Spotify ingesting RSS feeds with permission and then delivering a lot of data back to you as a podcaster. Well, no one's out there saying Spotify is breaking

podcasts, right? Luminary doing something like that. Maybe less effectively. Effectively, that's one word to use. It's another version of that. Everyone's like Luminare's Breaking Podcasts. And it seems like the notion of RSS distribution is still tied into what this ecosystem thinks it's doing. And that feels like the first domino that's going to fall.

Is that kind of what? Yeah. So my feeling on this has always been like, for the longest time, the cultural identity of the space is driven by a certain technically oriented. segment as the nature and a number of publishers and podcasters and makers participating in the space just grows and diversifies if people with different ideological views, different relationships to the original technological premise of podcasting as it participate in the space and also

increase their profile. It has fundamentally complicated what we think the podcasting community is, right? It's just a bunch of different kinds of actors wanting different kinds of things from the space. at the end of the day, it's the only thing I feel that's truly important in sort of what the masses end up interpreting podcasts to be,

which is why the luminary thing is really interesting, which is why the sort of Spotify thing is really interesting, which is to say, like, there are these sort of fundamentally non-podcast technology platforms essentially appropriating the culture, the branding, and the goodwill of this space, which brings us to a core, like, at the heart of what the question is,

which is, is podcasting the community or the technology? Yeah. That's a political fight. And, you know, the secondary question to that is sort of like, what is the future of open podcasting within that framework, right? If we do live in a society in which, like, an American society in which, like, a lot of people who listen to a podcast, are our podcast fans, don't actually listen to them through RSS feeds or whatever.

They just get them wherever they get them. And they kind of have an affinity to this certain kind of audio programming, audio entertainment. Then that kind of renders a lot of this questioning mood. But I think it's meaningful to still a strong minority. and it's also meaningful to a certain, you know, system of creativity. Because I don't really want to live in a future in which, like, only four or five major publishers get to dictate what's cool and what comes up,

what comes down, essentially what music is today. It would be nice to still see an open podcasting ecosystem where, like, any interesting random person could just break out 100%. There's a way in which I think that could still happen within an open podcasting first ecosystem. I also think there's no ways that can happen. in a non-open pocket space ecosystem might not be a popular thing to say but I'm not an idealist

and I am not particularly optimistic about anything corporate money is going to do what corporate men's going to do and we're just going to live in their world you know. It'd be kind of wild if Apple ends up as like the SoundCloud of podcasts. I would actually let that

if people are like check out my Apple podcast when the treats go about it. What do you think it's going to happen? I mean, I'm just thinking about I'm kind of responding to what you're saying but a couple things. One is that everything we saw with Luminary definitely seems like people coming down on the side of a podcast is the community, not the tech. Because like we said, Spotify and just that RSS-SP, no one blew up at Spotify.

I just think it's about the community. It's the norms. It's the culture. You didn't talk to me before you pulled my show into your platform. Like, talk to me, man. Like that's what they want. I'm also thinking about you saying you want a world in which there could be breakout podcast stars. And I think about it from the perspective of like YouTube or Instagram.

where you can break out on YouTube or Instagram, but that's because the algorithm serves you up and is like, hey, you made viral content, good job. So I feel like this gets back into this issue of the discovery. And it's like how it comes back to community and politics again because you can't, how do you get a break?

I mean, cereal was made by, you know, class, yeah, exactly, like big names. How do you become a breakout podcast star? And I think that is actually a huge thing that needs to be solved, if that's ever the promise of like the open ecosystem. Right. And Luminary's answer is actually just spending money at ads.

Like they're just going to advertise the podcasts. They're going to put faces on buses. Right. That's like a very standard way. If they start actually getting talent that is truly unknown. Yeah. Yeah. But if you're like a kid in your bedroom and you're like, I'm going to make the next great podcast.

Well right now, good luck. I mean, you have to have some connections for sure. But like, I mean, there's like another really elemental question. It's like how do you manufacture cool? Like how do you manufacture the cool of like old time road or something? And this is like some of this is unquantifiable. Like this. But you don't have the machine to serve up what people are finding cool that's unquantifiable.

But do you? Like there are many, many machines that's not directly related to the machine that you're running. Like, you know, I run a freaking news editor. I could easily try to like go game another system to draw attention to that news letter. It's like my tweet went viral and we put my SoundCloud link. Like it's kind of a cross-channel. jumping. And I feel like there's a way in which we can think too much in silos and buckets here, whereas like podcasting is a segment of all entertainment. And we are all contenders and players

in the culture. So we can break the culture in many different ways. But we just have to sort of be a bit more creative around that. Like you guys see that. We do our best. Yeah. Nick, we'll have you back for a 45 minute discussion on what is cool and how do you make it. I'll bring my cousin, my 14 year old cousin. It appears to be the only answer is whatever the teens are doing is cool. Hire children. Yes, that's the answer. The final metaphor, Nick has after agrarian farming and Granada. Granada.

His children are cool and we should hire it. That's great. Well, Nick, thank you so much for joining us. That was really fun. Ashley, as always. Yeah, thanks for having me. Luminary is going to do more. It's very obvious.

They're not going to stop. No. Too much money in the bank. So we'll have you both back to talk about the next twist and turns of the podcast. Hopefully, yeah. God willing. All right, that's it. Thanks, everybody.

All right, well, that's it. Thank you so much to Nick and Ashley for unpacking Luminary. And I have to say the surprising complexity of the podcast world. We just do the show and there's a whole machine out there that makes it a success. That machine, by the way, includes all of you. I want to say thank you to every Vergecast listener who voted for us on the Webby Awards. We won the People's Voice Award for Best Science and Technology podcast. Very exciting.

Super proud that all of you voted for us. Thank you so much for that. And I have some very exciting news, which is that we'll be taping a special live episode of the verge cast right after Google I.O. on May 8th. Deeter and I are going to be interviewing Hiroshi Lockheimer, who's Google's SVP for Android Chrome, ChromeOS Play, comms and photos. It's a lot of stuff. And Stephanie Sade Cuthbertson, who's director of Android. So two power players in the Android ecosystem and Google ecosystem talking to us live in front of an audience, the computer history museum about the future of Android. It's going to be right after IOS,

so presumably they'll have lots of announcements. You can go look on the website if you want to try to get tickets. There might be a waiting list. We can't be sold out already. That episode will be out in the feed right afterwards, so you won't miss anything if you can't get in. We would love to see you there if you can make it. We'd love to hear what questions you have for Hiroshi and Stephanie before we go in so we can be responsive, bring the community to them. And we would love to hear what you think of our live shows as we do more and more of them. That's it for this interview episode. We'll be back on Friday with a regular chat show.

Another interview on Tuesday, and the wheel keeps turning. Let me know what you think. I'm at Reckless on Twitter. We'll see you next week.