Surrounded by Big Tech, small podcast stores are swimming with sharks
Last August, Léon Neyfakh had a decision to make. Prologue Projects, his podcast production company, was working on the fifth season of “Fiascoa non-fiction narrative program about American scandals within living memory. The show’s previous seasons had been acclaimed for their immersive re-examinations of torturous political conflicts — Bush versus Gore, Iran Contra, Boston’s school desegregation — and Neyfakh was confident in the idea for the new season, which would follow the early years. of the AIDS crisis. What he didn’t know yet was how he would pay it.
Luminary, the subscription podcast platform that financed and exclusively distributed the first four seasons of “Fiasco”, had chosen not to renew this agreement, returning the fifth season to Neyfakh.
In a way, that put him in a privileged position. While big tech companies like Amazon, Spotify, Apple and SiriusXM have spent billions in recent years acquiring or developing podcasts, independent companies like Prologue have found a booming market for their work.
But sharing the field with such dominant players can be complicated, owners of several small businesses said. Even if one isn’t being swallowed by a bigger fish, competition for advertisers – key sources of income for many independent podcasters – has intensified as platforms tap into cutting-edge technology and basics. users in the tens or hundreds of millions. Additionally, the sheer volume of new podcasts (Spotify alone has nearly four million, up from 500,000 in 2019) has made it increasingly difficult to attract and retain audiences.
Many small businesses are trying new tactics to stay afloat, including courting investors, crowdfunding on platforms like Patreon, and partnering with behemoths.
“Step into this ring is not for the meek and gentle,” said Jessica Alpert, co-founder of podcast production company Rococo Punch. “You always have to be ready to hustle.”
For the fifth season of ‘Fiasco’, an option for Neyfakh was to seek a deal similar to the one he had with Luminary. In return for a royalty that would help pay salaries and cover the show’s production costs, which several producers say range from $250,000 to $500,000 for a narrative documentary series, a distributor would make the broadcast exclusive to its users. Neyfakh had received such an offer from Audible, the Amazon-owned subscription audiobook company that now makes dozens of original podcasts.
“They have a lot of historical and journalistic content that looks like us and millions of engaged listeners,” Neyfakh said.
Another option was to release Season 5 at no cost and try to recoup the investment by selling ads. This would allow Prologue to make the show available on all platforms and retain full copyright control.
Neyfakh liked the idea of making “Fiasco” accessible to as wide an audience as possible. (Some critics claim that podcasts contained in “walled gardens” – accessible only to users of a particular platform, such as Audible or Spotify – aren’t really podcasts.) His first podcast, “Slow burning”, had been released via open distribution in 2017 and became a big hit; later this year, Julia Roberts and Sean Penn will star in a television series based on the first season.
“It’s harder to get exposure for a show that’s behind a paywall,” Neyfakh said.
But making “Slow Burn” available for free to listeners came at a price. Neyfakh said he and the show’s only other full-time producer in its first two seasons, Andrew Parsons (now Neyfakh’s co-founder at Prologue), regularly had sleepless nights and worked weekends. He said the show’s publisher, the Slate Group, told him that Slow Burn wasn’t gaining enough publicity to pay more staff.
A representative for Slate declined to comment on staffing decisions or share “Slow Burn” revenue figures, but said the show has doubled its budget and ad revenue since its launch. Marshall Williams, managing director of Ad Results Media, an ad sales agency that works with podcast companies, said it’s common for highly-produced podcasts to struggle to monetize in their first few seasons.
“If you spend $500,000 making a show that doesn’t have a very big audience built in, you’re not going to make any money early on,” Williams said, believing that such a show, given a 10-season episodes, may require over 600,000 downloads per episode to break even through advertising alone. “Reaching this level takes time and discipline.
To scale faster, the founders of podcast production company Campside Media turned to Hollywood for support. Campside, responsible for hit shows like “Chameleon: Hollywood Con Queen” and “Suspectwas founded in 2019 by three veteran magazine journalists — Josh Dean, Vanessa Grigoriadis and Matthew Shaer — and producer and screenwriter Adam Hoff.
The company received an initial minority investment, reportedly in the seven figures, from Sister film and television studio, co-founded by Elisabeth Murdoch. He hopes to make money in part by licensing his shows to Hollywood and sharing the profits if any movies or TV shows are made.
“For us, the killer idea was to take the best non-fiction narrative journalism in the world and empower journalists to transfer those stories into audio,” Grigoriadis said.
So far, Campside says it has licensed seven podcasts for adaptation, including “Hung“, about an opioid addict turned serial bank robber, currently in development for Apple TV+, and”Beringabout a fishing boat disaster, which was acquired by Sister. This year, the company is working on 14 new podcasts, most of which have been pre-sold to distribution partners, and plans to expand into film documentary production.
“We want to perform at the highest level, so we went where we could get the highest budgets the industry commands,” Hoff said.
Jessica Alpert of Rococo Punch said she and co-founder John Perotti worked for years working under contract for other media companies, including PBS and LAist, to save enough capital to start their first original series.
The series, last year “The turning point: the sisters who leftabout a strict religious order founded by Mother Teresa cost over $500,000 to produce and market. Alpert and Perotti offset some of these expenses by selling non-exclusive distribution rights to iHeartMedia. To make more shows like this, they’re now trying to raise $1.1 million in investment, turning to backers in areas like retail and consumer technology.
“It can be extremely uncomfortable to be in that seat,” said Alpert, who said he took an online course on how to talk to angel investors. “But I’m all about discomfort if it’s in the direction of growth.”
Rococo has eight full-time employees and plans to release eight or nine original shows this year, including a second season of “The Turning” and a first-person documentary series about a summer in Provincetown, Mass., which Alpert called “’The Real World’ meets ‘This American Life’.” The main challenge for the company, Perotti said, is hiring enough staff to meet the never-ending demand for products.
“In every pitch meeting that we have now, people ask us if we can do things over multiple seasons, or potentially make them work year-round,” he said. “Everyone just wants more and more.”
At the Prologue, Neyfakh weighed the potential difficulties of producing an ad-supported fifth season of “Fiasco” against the relative ease of pivoting the show to Audible. Eventually, he chose Audible. The new season will premiere on March 24 as an Audible exclusive.
“The numbers we should have reached to get our money back just seemed extremely optimistic,” Neyfakh said. “I didn’t want to wake up every morning worrying about having to lay off or downsize my operations.”
In addition to the “Fiasco” deal, which covers the next four seasons of the show, Prologue has granted Audible the first-bid rights to all new podcasts the company develops in the future. Financial terms were not disclosed, but Neyfakh said the money allowed him to hire new staff – Prologue currently has 13 full-time staff, up from six in 2020 – and move into a new loft. bright in Brooklyn with a bespoke recording studio. .
On a visit last month, the place still had the bright, furnished look of a show unit, with sterile white walls and rows of empty workstations offset by a pair of vibrant purchased vintage rugs by Neyfakh’s wife. Four other employees sat with their laptops in a common area, working on one or another of the six podcasts running or in development. Two — the comedy series “Celebrity Book Club» and the Supreme Court show «5-4” – are supported in part by contributors on Patreon.
In a conference room, Neyfakh spoke with a mixture of admiration and pride about the growth of his business (he says it’s profitable) and his dreams for the future: The music? The sound is playing? A marketing department? It has no plans to sell anytime soon, he said, but acknowledged that continued growth would require some trade-offs.
“People talk badly about ‘walled gardens’ and paid memberships, but I bet these are the same people who say they support fair pay and want to reduce burnout,” he said. “It’s the way I found to achieve it.”