The future of the podcast business isn’t advertising or subscriptions. It’s both.

Luminary, a startup angling to be the “Netflix for podcasts,” recently tweeted that “Podcasts don’t need ads” — a claim that riled up enough people that Luminary quickly apologized and deleted the tweet. But whether those people like it or not, it appears that some number of major podcasts are going to disappear behind paywalls as the nascent industry figures out how to become a real business.

“We love the ads and we expect the ads to continue. But I think that long term to have a healthy content business, you have to have multiple revenue streams and you don’t want to be completely dependent on advertising,” said Jacob Weisberg, the former editor-in-chief of Slate Group who started a podcasting company called Pushkin Industries with Malcolm Gladwell. “That is why at Pushkin, we’re extremely interested in the experimentation that is really starting to unfold around paid content models. But, I don’t see them as one or the other.”

Weisberg appeared on the latest episode of Recode Media, recorded live at South By Southwest, with Pushkin’s Bethany McLean (a journalist whose upcoming podcast will go behind Luminary’s paywall) and Ad Results Media CEO Marshall Williams. The group discussed the variety of ways to monetize podcasts with Recode’s Peter Kafka, with both Weisberg and Williams pointing out that podcast ads are unique in one important way: Unlike in other media, people seem to actually enjoy hearing them.

“Digital display advertising is one of the things that turned the internet into a misery, right?” Weisberg said. “The retargeting ads that chase you around like eye-blaster type ads, it became such an unpleasant experience that it spawned the whole industry of ad blocking. We can’t let that happen in podcasting. I think there’s no reason why it has to happen in podcasting.”

You can listen to Recode Media wherever you get your podcasts — including Apple Podcasts, Spotify, Google Podcasts, Pocket Casts, and Overcast.

Below, we’ve shared a lightly edited full transcript of Peter’s conversation with Jacob, Bethany, and Marshall.

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Peter Kafka: Hi, everyone. Welcome to podcasters talking about podcasting in the podcast studio to a room full of people I think who are all podcasters. Is that right? Who here does not have a podcast? Oh, all right. We’ll tell you why you should or shouldn’t do it. Thanks for coming. Thanks for standing in line. Your reward is about 45 minutes into this, if you have questions, you get to ask them your questions. They’ll probably be better than mine. So, think of those excellent questions.

I’m going to have the panel here quickly introduce themselves, explain who they are, and what they do for a living.

Jacob Weisberg: I’m Jacob Weisberg. I’m the CEO and co-founder of Pushkin, which is a new podcasting company that Malcolm Gladwell and I started in October.

Bethany McLean: I’m Bethany McLean. I’m a longtime print journalist and since none of us are sure print journalism’s going to exist much longer, I’m a prospective podcaster.

Marshall Williams: Love it. My name is Marshall Williams. I am the founder and CEO of Ad Results Media. We place a pretty significant amount of advertising in the podcast space. We represent roughly a third of all dollars in the space and love it. Absolutely love the space.

That is an excellent intro. We’re going to talk about the business of podcasting. Is there a business in podcasting? I think we all believe there is. That’s why we’re here. We’re talking about how it works.

Is anyone here paying to listen to a podcast? Okay. That is zero hands in the room. So we all understand one model, which is you hit “subscribe” to your platform of choice: Apple Podcast — there’s some Apple people here — Spotify, etc. You listen to a podcast. It may or may not have ads. That’s how podcasts work today.

Jacob, that has worked for you up until now. You’ve had a successful podcast. It’s working for you, Marshall. You’re selling ads in some of those podcasts. Marshall, can you give us a quick primer on how podcast advertising works? When I’ll hear a podcast ad and either do or don’t take an action, what happens? How does someone get paid?

MW: Okay. So, our business, a little bit of background on just how we got started and that kind of thing. Our business is 21 years old and it began as a radio company. Our style of advertising was to have the radio hosts in their particular drive times endorse a product or service that we represented, a client of ours. We were the agent. We became pretty successful at that.

Our systematic approach to how we advertise is such that we identify what works and what doesn’t, we place our dollars in that. We owned a bunch of real estate on radio and got to where we were capped out and we’re like, “Okay, what’s the next logical extension?” Well, we were obviously spoken word, because it’s a host-read endorsement. We encountered podcasting just as a complete fluke, fall-out-of-the-sky thing. I read an article on Adam Carolla and — this was April 2010. We began advertising on Adam’s show.

And he’s someone who got into podcasting because he had failed at TV.

MW: Failed at TV.

He had a CBS [radio show] that fired him and he was on radio, but he couldn’t compete with himself anymore. So, he did podcasting as a joke, as a lark.

MW: He couldn’t compete against himself. I love that. He was on a radio program that was owned by CBS at the time. They changed the format of the radio property. He was displaced. So, I think almost as a lark, he decided to do his morning show that he was doing on Los Angeles Radio, out of his garage. Very honestly out of his garage. Car parts everywhere, hoods open on cars, out of his garage.

We researched how to get in touch with Adam and a friend of his wife’s called us back and said, “What do you want?” I said, “We want to advertise on Adam’s podcast.” “Well, what do you pay?” “I don’t know. What do you charge?” “I don’t know.”

So, we arranged for a fee-based structure based on performance. We thought it might be a few thousand dollars. Well, it ended up being a lot more than we expected.

Performance means what? Spell that out.

MW: Okay. So, we’re a performance marketing company. When we say performance, it’s defined as ... and if you listen to a podcast, you’ve heard ZipRecruiter or Quip or Robinhood or whatever. “Go to robinhood.com, enter this code,” or, “Go to robinhood.com/recode.” Okay?

Yep.

MW: Enter this and you’ll get a special offer, whatever. That’s how we quantify success currently in our universe.

Just to get super granular, does performance mean, “I went to the website,” or, “I went to the website and I signed up,” or, “I went to the website and signed up and actually paid someone money”?

MW: There’s some metrics in there that we have to kind of suss out, but it’s actually based on transactions.

If I hear that Robinhood ad ... But I don’t want to trade stocks because you shouldn’t be buying and selling individual stocks if you’re a regular human being. You should buy an index fund and let it ... Sorry, Robinhood. If I don’t transact ...

MW: Robinhood’s a wonderful app.

You’re fine. If I don’t transact, Robinhood doesn’t get charged and Adam Carolla or you, whoever the ...

MW: Okay.

That chain, no one makes any money.

MW: The pricing model for buying advertising in the podcast space right now is based on a cost-per-thousand multiple. So, for every thousand downloads you have at this point — and that’s a whole ‘nother panel — we are charged X dollars based on every thousand. CPM is the industry term for it. Every thousand downloads we...

So, that’s the same as me putting a web display ad or putting an ad in a physical newspaper, right? This many people are going to see or hear the thing, you’re going to get paid for that, and then the performance part is on top of that?

MW: That’s correct. Now, we agree to pay this CPM. We run the advertising on it. We use the metrics that I described a few moments ago as the proxy for effectiveness. If we see the proper numbers come back or proper multiples come back, then we continue to invest. And I’ll say this: I’m as excited as I’ve ever been about an audio space going back 30 years in the radio world, because this is some of the most successful performance we’ve seen, period.

So, I want to come back to that and who’s advertising with you and how that works. Jacob, you and Malcolm did a very successful podcast called ...

JW: Revisionist History.

... Revisionist History.

JW: Still doing it.

Now we’re season ...

JW: Season four in June.

That many seasons. It’s great. You were doing that model, right? Essentially getting paid. The podcasts are free. People listen to them. Now you’re doing your own podcasting company. You’re employing Bethany, right? Different model, same model, mix?

JW: Well, here’s the larger picture as I see it. So, advertising on podcasts are amazing because people like them. I’ve never been around a form of advertising on media before where often, people look forward to the ads as much as the content. Sometimes the ads are more entertaining than the content.

Shall we do a quick poll? Who fast-forwards through their podcast? It’s very easy to fast-forward, right?

JW: Note the ...

That’s 25 percent.

JW: Not that many, but ...

That’s not bad.

JW: Some people do, but generally the ads ... because they don’t interrupt, because of the host read, they don’t interrupt the continuous experience, a lot of the hosts have a lot of fun with — Malcolm Gladwell certainly does — it’s made this phenomenon of the well-liked host-read ads ... I’ve referred to Marshall before as the Lorenzo de’ Medici of podcasting. He’s made this whole industry possible.

So, we love the ads and we expect the ads to continue. But I think that long term to have a healthy content business, you have to have multiple revenue streams and you don’t want to be completely dependent on advertising. That is why at Pushkin, we’re extremely interested in the experimentation that is really starting to unfold around paid content models. But, I don’t see them as one or the other, I think ultimately to be a healthy, sustainable industry, podcasting needs both advertising revenue and revenue from listeners.

Will I be paying for podcasts that also have ads in them?

JW: It’s possible. That’s on Hulu. You pay for content that also has ads in it. I’m not sure. It seems more natural that if you pay, you don’t get ads. And at Slate, which was my old company, if you became a Slate Plus member you got the podcast without ads and people really like that as a benefit. We used to have the ... although some people liked to listen to the ads anyway. So, I don’t think we know exactly how it’s going to work.

We also don’t know if we’re going to sell podcasts directly to customers or it’s going to be through a Netflix model like Luminary, which is where Bethany’s doing her show, or whether it’s going to be ... There are a lot of possible paid models and there’s very little basis for saying, “Here’s how it’s going to be years down the road.”

But that’s the entire point of this session, so we’re going to pretend. Bethany, you are a hyper-successful journalist, longtime Fortune writer. Now you’re at Vanity Fair, written a couple of books ... if you guys have read Enron: Smartest Guys in the Room or watched the great Alex Gibney doc, that’s Bethany. What provoked you to make a podcast?

BM: Well, I think print journalism is really at a crossroads and I like to believe that it’s going to survive in some form or another. But long-form magazine journalism in particular is under siege. So, I guess when you’re at risk of becoming a dinosaur, you have two options. One is to crawl off in your cave and do whatever dinosaurs did before they went extinct.

The other is to say, “Well, maybe I do actually have some other skills.” I’ve always thought I have no other skills than writing magazine stories. But maybe after 25 years of doing this, I do have a few other skills like interviewing people and I have a lot of thoughts about the business world after covering this stuff for — it’s frightening, but — a quarter century now.

So I thought, “What a great opportunity to take some of these other skills and do a podcast.” The idea for my show was pretty simple, which is — I do consider myself kind of a connoisseur of business journalism after all these years — to find the pieces that I think are really important to the books, the articles, each week, and go interview the author and hopefully over time, that will turn into a way to bring attention to topics that perhaps aren’t getting the attention that they deserve and highlight authors who maybe aren’t getting the attention they deserve, but with a wraparound of commentary by me about why this issue is so important.

Were you listening to a podcast prior to this?

BM: I listen to Malcolm’s podcast and others.

Did Malcolm or Jacob come to you and say, “Hey, Bethany,” or did you say, “I have this idea,” and go to them, or were you shopping it around?

BM: No, I came to Jacob with the idea and said, “I have this really simple, straightforward idea. What do you think? It’s not heavily produced. It’s just a straightforward interview show, builds on skills that hopefully I have.” So, I brought it to Jacob.

Okay. So you’re going to compete with me. Probably crush me.

BM: Not really. I think it’s pretty different, actually. I’d like to believe it is.

Actually, just for argument’s sake, Kara Swisher and I were talking about podcasting for a long time before we got into it. Here’s an anecdote: We went to Bob Pittman, who runs Clear Channel, which is radio, this is four or five years ago. He has a hallway that’s like a mist tunnel that you walk through, to get through. And he said, “Podcasts. No one wants to do podcasts. You guys should do live radio.” So we wasted a year listening to Bob Pittman. Apologies if anyone here works for him.

JW: He wants to do podcasts now.

I bet he does.

JW: Boy, does he.

Did you think, “I can do this myself. I’m good at talking to people. Talking into mics can’t be that much harder. I bet I can hire someone and maybe work with someone like Marshall and do the whole thing myself”?

BM: I thought the podcast industry, from what I could understand about it — and I think it’s the wild west right now, which means there’s a lot of opportunity but also a lot of confusion — to me, I thought two things. One is that it is on the cusp of this transition into perhaps a different sort of industry where the podcast might be more produced and have more of a show-like feeling. So, you could go your own route, but if you’re going to go your own route, for me you have to be a business person. You have to go out and find advertising. You have to go out and find a producer. You have to go find studio space.

I realized, for better or worse, I’m not interested in that side of things. I’m interested in the content and I want to produce really great content, but I don’t necessarily want to be my own business person at the same time. So, that sent me in a slightly different direction. And then ...

In the same way that musicians can put their own thing out on SoundCloud but they eventually want to sign with a label.

BM: Perhaps.

Oftentimes, oftentimes.

BM: Perhaps, right? So that’s a bet on my part that the industry is moving in that direction. Then there is that trade-off with an advertising-driven model versus a subscription model. I think, again, who knows, right? This is all really nascent and it’s unclear which way it’s going.

But if you look at what happened with video, where everybody thought this was going to be huge and there was going to be so much advertising and it turned into compression pretty quickly with Google and Facebook siphoning off a lot of the available money. You could see that dynamic coming to podcasting as well. If I had to bet, I’m more aligned with Jacob’s view of the world that it would be better to have a couple of different revenue streams rather than just one.

Marshall, let’s talk about the ad business that you’re in ... and by the way, your sponsor here is Cadence13, they’re in the advertising business. There’s a specific kind of profile of a podcast advertiser, right? It’s someone who wants a direct response. They could be selling socks — like the fine Mack Weldon socks I’m wearing here, promo code: recode. It could be Robinhood. Sometimes there’s a GE or something, but most of the stuff is someone getting someone to do something. They want you to buy or sign up for something. Why is that happening now and is that going to change?

MW: I think with any new media that comes out, you tend to have the performance marketing groups go after it first. First of all, the price of entry tends to be pretty low and they’re willing to say, “If we can test it and learn, see it work, etc., then we want to invest in that.” That’s usually what happens.

So, What are examples of a new medium starting and performance marketing showing up first before anybody else?

MW: Well, long-form TV, 30-minute television, is a good example. The original companies that went into that space were companies that would produce their own content and sell the whole 30 minutes to ...

Right. That’s a little different. They weren’t trying to get you to go ... well, you couldn’t go online and buy socks because there were no computers.

MW: Yeah, but if you looked at those 30-minute segments, they were full of “Buy right now,” or, “Call this number. We’re standing by,” that kind of thing. So, that’s one example of it.

This is another one with ... we have been a performance marketing company since the beginning and most of our clients believe in the same metric-driven decision-making that we do. But we’ve also found that the branded companies have been approaching this space a lot more. One, there’s an alignment with top-quality content, very high-end, very able to reach a thoughtful, well-educated, affluent individual. So there are a lot of companies who want to get into that space for that alignment.

The other thing is, the directional arrows that our clients have put out there with a lot of the startup space is that you’re a direct-to-consumer brand, you’re new, you’ve got to get your name out there, here’s a place that has a relatively low cost to entry, and it works.

Do we think the industry moves ... like Facebook forever has been saying, “We want to be in the brand advertising business. We’re going to take that money that people are spending selling Toyota ads on TV, and we want it.” But really primarily the bulk of their business is still direct-to-consumer, someone clicking on something and taking an action. Do you think podcasts are going to remain a direct-to-consumer business for a long time or do you think they graduate up into the branded stuff?

MW: I think it will always have a segment of the performance marketing group, okay? It will, because it works well even at some of the higher CPM levels, you still get performance.

Because one of the people who sits back and goes, “This podcasting thing, there’s a bubble here.” And one of the big problems is a lot of these companies that are selling socks or Robinhood or whatever, ton of VC money, so the money’s being transferred from the VCs to you guys, maybe to me and Bethany and Jacob. Once that bubble inevitably pops, this thing all goes away.

MW: I don’t see a bubble. We have a consistent funnel of clients who call us. It used to be that they would call us and say, “Radio. We want to be in radio,” or what have you. But now, these are very well funded, very well established companies who say, “We want to be in podcasting first.” One, we can show performance, two, the recognition we get from aligning ourselves with shows like Jacob’s and Malcolm’s and soon to be yours, I hope. It’s phenomenal. They just get the most positive feedback you can imagine in terms of, “Those are the kind of people we want to reach. This is awesome.”

I want to open this up to all of you guys. In the old days — and I’m old. I remember the first web ads. I think the first one was Hotwire. I can’t remember who it was. They also had like an 80 percent click-through rate because no one had seen a web ad before. So, everyone clicked on them. By the way, my kids now see so few ads that when they see them, they find them to be a great novelty.

So right now we have entertaining ad reads from Malcolm, etc., They still are easy to skip. Do you think once more people listen to more podcasts and they realize, “All right, I’ve heard a version of Malcolm reading this forever. I’m going to skip past this,” and the effectiveness of that kind of advertising drops down?

JW: Digital display advertising is one of the things that turned the internet into a misery, right? The retargeting ads that chase you around like eye-blaster type ads, it became such an unpleasant experience that it spawned the whole industry of ad blocking. We can’t let that happen in podcasting. I think there’s no reason why it has to happen in podcasting.

You start from this basis of incredible love for the medium, people liking the ads, this extraordinary engagement, and then the ad load’s not that heavy on podcasting. The ad load for an hour of podcast listening is a lot less than even the sponsorship load on public radio. So, it’s not killing anybody. People understand you’ve got to pay to support this content one way or the other.

I think the mistake would be to let the ads degrade in quality, to let them increase too much in quantity relative to the amount of listening. But they do have these distinct phenomenons. We’ve got the love and the engagement. What we don’t have is the precision targeting and the data that a lot of advertisers want. That’s part of what’s held back some of the brand advertisers in addition to the non-standardization.

Because they don’t know what they’re getting.

JW: Yeah. On Facebook they can say, “We want this demographic. We’re going after teenage boys in this place.” You can’t target in that way on a podcast, which is why it favors the performance advertisers who essentially apply their own data. They know ...

I know I sold some socks.

JW: Yeah, they’re giving you an offer code. They know exactly what they’re getting out of advertising on a podcast. But a big brand advertiser doesn’t have that feedback right now. The absence of feedback doesn’t mean the ad’s not effective. I suspect they’re extremely effective just because of the kind of recall you get and the kind of response you get. But you can’t show it the way you can show it on Facebook.

Bethany, you are a longtime journalist. I mean that in the best possible way. And old-time, longtime journalists never touched advertising, right? There’s a wall between the two. Often there are different floors. Oftentimes there’s even a different elevator between the ad department and ...

BM: They used to call it church and state way back when.

How do you feel about reading ads?

BM: Let me back up to one point that made me more interested in doing a podcast this fall, is I was contemplating this idea and that is users’ engagement with podcasts. I had a little book come out this fall and I was struck by ... we all stare obsessively at our Amazon rankings whenever you’ve published a book to see, you can chart it every hour to see where it’s going. I was struck by what a dramatic impact podcasts had on how my book was selling. That’s because I think users and podcasts are just deeply engaged in the content.

How did you measure that?

BM: By just how it would move up the Amazon rankings.

Just anecdotally.

BM: And it was much more dramatic than a TV or a radio slot if I were featured on somebody’s podcast that had a lot of listeners. So, I think there is really a dramatically different level of engagement with the content and then with whatever comes along with that content. I don’t know about the reading an ad.

Have you broached that? Is it gonna be part of what you do?

BM: We’re not there yet.

JW: We’re developing Bethany’s show with Luminary, so it’s gonna be in an ad-free environment.

So you don’t have to do this yet.

BM: Theoretically.

JW: We’re not gonna compromise her at this point.

MW: Jacob, we need to talk about this after the session here.

I do wanna say one thing to your earlier point about clutter. Because I do think ... I love this medium. I love the connective tissue that takes place between a host and a listener. I love the entertainment value, I love the knowledge I get from it, I love the suspense, whatever it may be. And I don’t want to radio-ize it.

And don’t get me wrong, I don’t wanna villainize radio, cause it’s an important part of our business, but if you listen to an hour of local radio, you will hear breaks at 15, 35, and 50, with four commercials in each stop set. That will ruin the space.

And the ads are different, too. They’re people yelling at you, over and over.

MW: Yeah, and the quality of the ads is like, “We’re having a sale this weekend, come out to the car dealership!” and that kind of thing. And that’s not what podcasting should be in my mind. And I’m an advertiser.

Did you know this going in? This is gonna be a different thing, it should sound different? Or were you selling radio ads in the beginning?

MW: Not until after we got into the space and realized how that connection takes place between the audience. I read an interview somewhere where somebody said, I can’t remember who it was, they said, “Earbuds change everything, cause it’s almost as if you have a narrator in your head.” And that’s what podcasting is, it’s that direct voice to you that’s entertaining, funny, insightful, whatever it is.

Super intimate.

MW: Super intimate, and mobile. We used to say, “Well, what about video?” and that kind of thing. It’s not innately mobile. Podcasting is. You can listen to it on the subway, you can listen to it while you’re mowing the yard, you can listen to it while you’re walking the baby or the dog or whatever. It’s fantastic.

Bill Simmons, who’s an early podcast guy, has a great story about being somewhere like this, and some guy walking up to him and going, “I’m listening to you right now, and here you are in real life, and it’s blowing my mind, man!”

JW: There’s nothing more flattering than being voice recognized. It’s so much better than having your face recognized from TV.

Agreed.

BM: I think I might do well on the voice recognition front. At least, I’m hoping for that. Anyway, but I do wanna draw a line, as I thought more about your question on the advertising. It’s interesting, today you read Axios’ newsletter, for example, and there are ads sprinkled right into the newsletter. “This is brought to you by ...”

Juul.

BM: If I were to be doing a segment in my podcast that was very hard on the banking industry, and JPMorgan Chase wanted me to read an ad for JPMorgan Chase ... I mean, I’d be fine with that. I think that’s okay. It’s different, if then JPMorgan Chase wants you to pay to make the content friendly to them. That’s where the line gets crossed, right?

MW: And let me say that, what you just said, I’m fine supporting JPMorgan Chase. From our client perspective, that’s due diligence we do with every host. We want them to understand the quality, the high quality of the product, the benefits of it, and then to put it in their own vernacular. I don’t want it to be, “Here, read this.”

Oftentimes it says, “Host now explains personal experience with product.” And I’ll do that, if it makes sense.

MW: And that’s what we want.

But if I don’t need that product or use that product, then I’ll say I can’t do it.

MW: Well, we’ve had a couple ...

BM: If somebody wants me to advertise shoes, I’ll do that happily. That’s okay.

What are you wearing, Bethany?

MW: If I brought you a shoe company ...

BM: If you brought me a shoe company, it’d be all good.

MW: You’d be like, “Okay, you can push the paywall stuff right out the door.”

JW: But that’s gotta be optional for hosts. And hosts have to have the ability to opt out of voicing an ad for an advertiser they don’t feel comfortable with for any reason. A conscience clause for hosts. But let’s just acknowledge that the church is built a lot closer to the state in podcasts than it was at newspapers, or still is at the New York Times. And the reason I think that’s okay is first of all, it is the established tradition in the media. We’ve had host-read sponsor methods since the early days of radio, and listeners understand when they’re hearing an ad.

You think the audience gets it, and they get the full transaction.

JW: I think that’s the key thing, they gotta know it’s an ad. If you’re confusing listeners about what’s an ad and what’s not an ad, that’s the line that you can’t cross. But I think having a host-read, because people understand what a host-read is, they don’t think the ad for Mack Weldon is part of your program. They understand you’re voicing an ad for the sponsor. You’re doing it in a playful way, and you’re making jokes about it, and it’s well-integrated, it’s kinda fun. But they know it’s an act.

Is anybody here from The Ringer? Does anyone listen to The Ringer podcasts? So these guys ... I listen to a lot of their entertainment podcasts, and they’ll be talking about Game of Thrones or whatever show they’re enjoying, and then they’ll stop, and now here’s an ad for something on Hulu or Showtime. Does that bump anyone? Does that worry you? Do you worry that there’s some connection between what they’re saying when they’re being paid to do it and what they’re saying when they’re not officially being paid to do it? Does that bother anybody? That’s one yes, okay.

Let’s talk a little bit more about measurement. This is an ongoing ... Well, it’s a discussion, I don’t know if it’s a problem. Every medium has this. Who is actually consuming the ad? Can we tell? Famously, in TV, we really don’t know. We have some idea. But people who sell Coca-Cola will say, “Look, I know that if I buy a bunch of advertising in Cleveland, I can sell X amount percent more pallets of Coca-Cola. I know it works, it doesn’t need to be that precise.”

Web advertising is crazily precise right now, in a super-scary way. If any of you use Facebook, you know about this. And then we’ve got podcasting, which is mostly guesswork unless someone is using an offer code.

MW: Well, it’s a somewhat educated guess. Most of the ... I imagine our pricing models based on cost per thousand. So we pay a price based on every thousand units that are out there. We quantify that as downloads. Now, there’s a number of ways to track downloads, because downloads are sent to your phone. There are companies that say, “Well, I got a download,” or, “An IP address hit my phone.” I’m not saying that exactly right, but ...

This device started to download this thing. That counts as a download.

MW: Started to download, so that’s a download. It’s not really that, because longer podcasts are downloaded in packets, so you might get that IP address pinging your phone a couple of times today.

Started off downloading at the hotel, I downloaded the rest over here.

MW: Yup. Okay, so you take a break, and you say, “Okay, there’s a five-minute window.” That’s one of the units of differentiation between a download. So if there’s not an IP address that shows up in the five-minute window, that counts as two downloads. There are some who are an hour. The IAB v2.0 standard is 24 hours.

This is the new thing.

MW: That’s the new thing. Now, is that right? I don’t know. I don’t know. We do need, as an industry, an agreed-to currency for quantifying a download. That will get the branded advertisers, the auto dealers, the credit card companies, the airlines — and their big agencies who have to quantify everything they do — to look at it and say, “Okay, we’ve got a standard unit of measurement, that’s what we’re gonna buy, and here’s the agreed-to CPM.”

So you think they’re sitting there, arms crossed, saying, “You guys figure this out, and when you do, I’m gonna come in and I’m gonna start buying ads for real.”

MW: I think some are. Some have embraced the space without that level of clarity because of the fantastic quality of the content you can align with.

And it’s got a cool halo effect.

MW: It does.

And it’s a novelty, “That sounds cool, I heard about that at South By Southwest, let’s go get some of that.”

JW: When podcasting first started to be a business, which I experienced at Slate, where I was for many years, and we started making podcasts 13 years ago, but for a long part of that time, there was no real business. There was minimal advertising, if any. It was apparent to me that those standards were a big part of what was lacking. And I was involved with the Internet Advertising Bureau, which had never done anything with audio.

But one of the things that was obvious was there were apples-to-oranges comparisons. What we were saying was a download was not what other podcasters were saying was a download. And I encouraged the IAB to apply the kind of standardization it has across digital advertising to podcasting. So argue about what the definition should be, but you’ve got the same definition agreed upon.

Bethany, are you worried as a creator about the precision of measurement? When you write for print, you have this almost luxury of not really knowing how many people are reading your stuff. There’s some circ number that’s kind of pretend, but no one’s monitoring your performance.

And if you’ve ever worked on the web directly, they know exactly ... Well, they think they know exactly how many people watched it, and how many people are reading it concurrently at any given time. Things get very specific. You start, depending on where you work, creating a kind of content cause it got more clicks than the last thing. Are you worried about going down that road?

BM: Hmm, it’s an interesting question. And you’re right, the great luxury of print journalism has always been that your piece is part of a larger magazine or a larger newspaper, and either that sells or it doesn’t. That’s doing well, but you don’t have this direct line to what you did, in terms of the number of people who read it.

And you can say that’s bad, in the sense that you can’t quantify it, but you can also say that that’s good, in the sense that at their best, old-time print publications were equally neutral between doing a piece that might garner a lot of views and putting it on the cover, and then investing in a really substantive piece that might not have the sex appeal. For example, some of the best work I did didn’t necessarily have sex appeal at the beginning of it. No one cared about an energy company down in Houston, Texas, that might be up to some sketchy things. And I think that’s actually a real question.

I like to believe that the great thing about podcasting thus far has been that it is an antidote to our social media, short-term driven culture. It offers hope for the culture, not just hope for journalists and for listeners. But it is this incredibly immersive, substantive experience, which is exactly the opposite of the hot-take snark that we’ve all thought was valuable.

And I like to believe that through a combination of an advertising-driven market and a subscription market that you can find your fan base and people who care about the content that you’re delivering. But it’s gonna be a totally different experience for me. And I’ve had some of it with writing online, and it’s really interesting. The only thing I would say about that, maybe you’ll disagree with me, I have not found myself able to predict which of my stories are gonna do well online.

No, if you did, you’d get out of that business and you’d be in the business of telling people how well their stories were going to perform.

BM: Right. It was actually one of the most hopeful things I’ve heard, was when I was at a Vanity Fair conference. It was Richard Plepler of HBO and the CEO of Instagram talking, and they were asked, “What makes something work? What makes something go viral?” And they both said, “We don’t have a clue.” And I actually thought that was awesome, because it shows that for all the people who are trying to track us and predict us and figure us out, we actually elude them so far. There’s still some mystery to humans, that nobody quite has the algorithm to figure out what’s gonna work. Once that mystery is gone, we’re screwed.

But you know, the people I work with who make video look at podcasts and go, “This is insane, you don’t really know who’s listening, when they’re listening, you don’t know when they stop. We can tell you exactly how many minutes into this YouTube video people gave up.” And I think, “I’m so glad I don’t know this right now.” But I would like to know if people are listening at the end of the podcast or not.

BM: You would.

JW: They have really different qualities. Podcasts aren’t viral. They’re almost totally mobile, but they’re not at all viral. If you have a podcast and you do 110,000 downloads for one episode, you’re probably gonna do in the range of 105 to 115 with the next episode. Maybe something goes a little beyond that, but you build an audience incrementally over time, and you neither have huge jumps, nor do you tend to lose that audience in a falling-off-the-cliff way. It’s just the opposite of video, where if you make 10 videos, one of those videos will have 20X the audience ...

And also, you can deliver it through Facebook, you can deliver it through YouTube, and you’ve got a lot of eyeballs coming through there. Here, maybe you guys will tell us differently, as far as I can tell, the way to get people to listen to a podcast is for them to listen to another podcast and hear about your podcast through that one. And it’s really slow going.

JW: But then they become ...

Or you land on the front page of Apple. There’s some Apple people here.

JW: Right. But then they become part of your audience. They’re not Facebook’s audience, they’re not YouTube’s audience, browsing for whatever might catch their eye that day. They’re people who come back and listen to you, and that feels entirely different from web video or even written content on the web. You can attract a loyal following as a writer on the web, but you still have that experience of the virality, where some piece, for reasons you can’t predict, has 20 times the audience of everything else you wrote, and you don’t think it’s because it’s 20 times better, it just hit some chord that for whatever reason got it circulating.

I wanna talk more about subscriptions and payments, but I wanna go back to Marshall for a second. You’ve now seen a large swath of people get into podcasting. You started off with Adam Carolla, who was already a professional radio person. He was seamless when he went to podcasting. He took this show that was working, made it better, frankly, on podcasting. You’ve now seen a lot of people try versions of this. Can you tell from the get-go when someone says, “I wanna try a podcast, here’s my plan,” that it’s gonna work or not?

MW: The barrier to entry is pretty low.

Right. It’s this.

MW: It’s not ... This, maybe a laptop, some editing software, that kind of thing. You can literally make ... We had the good fortune of visiting Marc Maron, who was one of the early adopters of podcasting, in his “studio,” which was essentially ...

Also a garage.

MW: ... his garage. He had books all over the place, he had a laptop and a soundboard, but it wasn’t anything fancy or anything like that. And this guy’s making millions. So the ability for somebody to take just their passion behind a certain subject, and with a little bit of quality editing and thought behind the content ... I mean, if it rambles and it doesn’t make any sense and it’s not linear or whatever ... Well, there’s caveats to that, too. But we’ve seen a lot of ...

To address your question directly, I think that you can still do that, you can come out of the ether and create ... With good content, you can have an audience in a relatively short period of time. The discoverability in podcasting is phenomenal right now. [To Bethany] You are in the process of making a show, you’re about to do this?

BM: Yep.

MW: You could have hundreds of thousands of downloads in a short window of time.

BM: Tell me how. That’s exciting.

MW: Yeah, okay. We’re gonna bring you a shoe company.

But can you spot someone who either is ... maybe they’re already famous, they’re an actor, maybe they’ve got something else going in, and they go, “I’m gonna try this podcasting thing.” Can you tell either looking at them or talking to them, “Yeah, you could make this work,” or, “You know what, you think this is just talking for an hour, and that’s not gonna work at all”?

MW: Right. We’ve seen that happen. There was a company that paid a very well-known comedian to do a podcast, and it was, “Here, turn the mic on and just talk.”

They’re funny, right? It should work.

MW: No, didn’t work.

Why doesn’t it work?

MW: Didn’t work. Cause there was no passion behind it, there was no ...

JW: Not that good.

MW: Yeah, it wasn’t that good. I think the commentary that she actually said was, “Cause they’re paying me to do this,” when somebody asked her. There was no passion behind it, there was no, “I really wanna get this out there.” There was no feeling behind it, and that feeling, I’ve always said this about audio, it’s a very emotionally transparent medium. If you drive, and you listen to somebody on the radio, and they’re mad, as much as they try and disguise it, you can still hear that. And you can also hear somebody who’s smiling. And so, I think that’s part of it. You get people who are passionate about what they wanna talk about, or what they wanna get out there, whether it’s how to gamble on jai alai, which is a really esoteric reference.

Yeah, that’s a weird one. So you mentioned Marc Maron, Adam Carolla, both very successful at podcasting, make millions of dollars doing it. I’m not gonna ask you a percentage, but how many people that you work with do you think are making their living as podcasters? Is it dozens? Hundreds?

MW: Oh no, hundreds.

Thousands?

MW: Well into the hundreds.

Paying their mortgage, paying their rent.

MW: With a little bit of back-of-the-envelope math: 50,000 downloads, and I think our Chief Revenue Officer Steve Shanks back there for our company said there’s probably 500 or 600 of those that yield 50,000 or better downloads, they do 60 or 75 minutes once a week, and they have four ad units in there. And we deal with a CPM that’s average, not high, not low, but kind of average for us, they can probably net $170,000 a year.

So that’s not ... Because for a while there were a lot of comedians doing it, but they were really promoting their live show, and that’s how they justified doing it.

MW: Right.

But you’re saying you can make a ... That’s a good living.

MW: Make a really good living.

At 50,000.

MW: And we’ll just think about what the multiples are if you do 100 thousand or 500 thousand or 1 million.

So that sounds pretty good, Jacob, why do we need to do paid?

JW: Well, a few caveats. First of all, I think that’s for a weekly conversational show that doesn’t involve a lot of production. Most of the shows that we’re doing are both much less frequent and much more highly produced than that. So a show like Revisionist ...

You’re gonna put people on a plane, and they’re gonna go talk to someone.

JW: Yeah, we’re doing something quite like journalism. Malcolm Gladwell travels all over the world doing interviews for his podcast. He has multiple producers working on the show, and we work really hard to make 10 episodes in a year. So the threshold ... That show does not turn a profit at 50,000 listeners, or even a few hundred thousand listeners. Honestly, to be successful, that show has to be above a million or into the millions.

You need a million people listening to Revisionist History for it to be an ongoing concern.

JW: I haven’t done the math, but I suspect ...

Something like that.

JW: I suspect that’s right.

As a free podcast.

JW: And we have significantly more than that right now, and that show does very well, but there are not many shows that have gotten anywhere near that plateau.

That’s a million per show or a million over the 10?

JW: No no no, we’re in the millions per episode. So there are multiple millions of subscribers per every episode.

I gotta work with you.

JW: Now that’s built over four years, and that’s not where we started out. But for a less-frequent, well-made ... Not to say there aren’t conversational shows that are well made, but they’re a much simpler proposition. You have low overhead, low cost. Look, that can work. That was the model at Slate, was these conversational shows. This Gabfest model we developed there, which Vox does now. Three people, regulars, sitting around, having conversation about either politics or culture or technology or sports. I love those shows. I listen to a lot of those shows, and I’ve been involved in making a lot of those shows. But I think it’s harder to make those work now, partly because the market is starting to be very saturated with them. And I think the barrier to entry is low, but the barrier to quality is getting higher.

Okay. So I understand why you need it, then. We just have a room full of ... I’m just gonna call you podcast nerds, and I mean that as a token of affection, because I’m one. But none of them are paying, right? How do you get people who are not paying for a product and are consuming it already, they’re not coming to it for the first time, to start paying? Anyone?

JW: Well ... I’m sorry, go ahead, Marshall.

MW: Oh, you’re gonna throw this one to me, are you?

This guy sells ads for a living.

JW: I have too much to say on the subject, so you talk.

MW: I think that there will be a place where content is behind a paywall that is content specific, or of such a level ... Let’s face it, people pay Sirius XM to listen to Howard Stern. That was the metaphor that everybody ... or analogy that everybody uses when we talk about, “Okay, will people pay to listen to audio content when it’s kind of innately free to begin with?” And in this space, it’s certainly innately free.

So, will they? Yes, I think there’s gonna be a space in there, a segment in there, where people will say, “Okay, I will pay for that, cause it’s such fantastic content.” The production quality has to be very high, like you mentioned. And there has been a lot of investment in the space lately, so I think you will see ... It won’t be three guys in a garage as much anymore. But that was the way the podcast space originally started, and, like you said, comedians who were testing new material or promoting their shows or whatever. That kind of thing.

So I do see a universe where that happens. I think there will still be a robust ad-supported model out there, for the very reasons we talked about earlier, the performance. It’s not a cluttered environment. Certainly don’t want it to get that way. So I think that we will have a place where both of those universes can coexist.

JW: Bethany, are you paying for any podcasts you listen to right now?

BM: I am not. And listening to this discussion, it’s interesting. It definitely makes me nervous and thoughtful about the business aspects in ways I haven’t thought about. I still start as somebody who’s been a journalist for 25 years and has primarily been invested in the creative side that if you’re passionate about the content you’re delivering, it will find a home somehow.

It may take time and it may not be immediate, but I am really passionate about the business world and about things that I see as right and things that I see as wrong. And I’m really passionate about good journalism and about putting those two together. And hopefully if I can produce something that is good and that I’m really passionate about, it will find a home over time. That may be a really naive attitude.

JW: That’s the correct attitude to have.

BM: But that’s what I want to start with.

JW: I mean, I totally agree. I think with digital journalism, we waited too long collectively as an industry to get people used to the idea that it wasn’t all free and it didn’t work for it all to be free. And there are news organizations that are salvaging a paid business model and it’s working really well at the New York Times. And it seems to be working well a few other places.

But there are a lot of great journalistic institutions, including probably the vast majority of local ones in this country, that are going away because people got so habituated to free content and we didn’t find a way to start charging soon enough.

The flip side of that is now everyone is asking for a subscription and that you’ve had your five clicks of Vanity Fair, pay up. New York magazine, on and on and on. And there was a Trump bump at the ... Everyone here has limited income. We can’t subscribe to everything and now you’re going to ask them to pay for podcasts.

A related question, how do you feel about exclusivity? Everyone here is listening to podcasts, generally can listen to them through whatever device, whatever software they want. Now we’re getting to a world where if you want to get Bethany’s, then you’re going to have to be a Luminary subscriber. You’re gonna have to make that decision. So it’s not just paying, it’s that I have to get it through this platform, through this thing. It seems like we’re adding another barrier we’re asking people to jump over.

JW: Right. I’ll pay you $10 million to have no audience. That would be a bad deal. I mean, you don’t want to have no audience. You want the highest revenue that’s compatible with the largest audience. And there is a Venn diagram there, where the sweet spot is, we haven’t necessarily found it yet, but you’d like to be available everywhere. Have that advantage of the open, the ad-supported podcast environment.

But exclusivity is a way to get paid. So I think all of these experiments that are going to involve degrees of exclusivity, whether it’s only being on Spotify or it’s only being on Luminary or it’s only being on Stitcher Plus or there’s windowing at the beginning of show. The first month or six months, it’s only available in one place or another. I think this is the year of what we’re going to start to see a bunch of interesting experiments around that.

We got 15 minutes, so let’s open it up to you guys. There’s a microphone here. Please come use it if you want to ask a question because this will be a podcast.

Audience member: Thanks for the fantastic session and interview. It seems like the problem or the issue that you’re wrestling with with regard to podcasts is how do you be able to provide good content not interfered with by advertising, which would be a necessary source of revenue or avoid conflict of interest if there is paid advertising that is being read. And even if the policy is not to have any influence by the sponsor for the content, how is the audience going to believe that or accept that? Now let me just say in full disclosure, I’m a physician and we got nailed by Grassley and this conflict of interest thing when in some cases, it was justified. But in many it wasn’t. But it’s an inherent conflict that exists. So you need the revenue or else you won’t have the ability to produce the content. How do you deal with it?

Don’t want to focus on Bethany because you’ve done this so ... Because even though you haven’t sold ads, right? You’ve worked for Vanity Fair. You may well know that GE has bought an eight-page spread or whatever. Maybe you don’t know this, but it comes back to you. You may also, by the way, know what kind of stuff sells well for Graydon Carter or his successor. This is still in the back of your head, “I know that at some point there’s an advertiser that may be upset with this.” How do you grapple with that?

BM: I don’t, actually.

You really don’t.

BM: I honestly don’t think so, no. If anything, I did grapple with not really the flip side of that but with the corollary of that issue, which is what’s going to be more popular. I mean, I can pretty much promise you that the most popular piece I’ve ever done in my life was my profile of J. Lo and A-Rod. I know. Forget the substantive pieces I’ve done. My mother emailed me the other day saying, “Are you going to their wedding?” God, come on! Anyway, so that’s the side that I wrestle with more is the content that’s going to appeal to listeners versus the stuff that you want to do.

I don’t think anybody is going to listen to one of my podcasts and think that somebody in the business world is paying me to be nice. That’s just not what the content is going to be. It’s going to be challenging and provocative. And so I think it will be clear on the face of it that this isn’t something that people are paying to have, that advertisers are paying for.

JW: I’ve thought about this a lot and I think it’s the same across media. Podcasts are no different. The rules are have integrity because if you don’t have integrity, rules won’t protect you. Don’t confuse consumers, listeners, readers about what is the ad and what is the content. And finally, don’t let the advertisers affect the content, and that can happen in subtler direct ways. If you follow those principles, I think you tend to be okay.

There’s a question here.

JW: Great.

Oh, sorry, Marshall must have said yes.

MW: No, that’s okay. I’m good. I’m the advertising guy. I’m totally good with that. I think there needs to be a clear delineation between your sponsorship element and your editorial.

Have you had a client come back and say, “That guy was way too hard on that industry. And you didn’t go after us, but he was hard on that industry. We don’t want that.”

MW: No, not really. I mean there’s ...

A little bit.

BM: Interesting.

MW: Again, we want a delineation there. We don’t want there to be any kind of ... You mentioned it. I don’t want my editorial content to be confused with an ad or vice versa. So it worked totally good with that.

Question here.

Audience member: I was just reading a really interesting report about how things are done in China, alternative business models. And it mentioned a figure that just really stood out at me. It said that the podcasting market is $3 billion. That there’s some podcasters out there that are ... There’s an economics professor that quit his job because he’s made $8 million in a podcast. And the unique thing that they have is subscriptions and people buy packages of podcasts and there’s a community around that. So I just wanted to ask you, I mean is that, that’s something that you could hold out there. Would that be something that you’d be willing to get into if there was a platform that allowed you to respond to comments that were time sliced and you had a private community that people paid for?

MW: A little bit of context on that. The largest player in China is a company called Himalaya, represented in the United States now in conversations and that kind of thing. Their business model, it’s robust as he mentioned, is built around education. And people use the podcast, which is mobile-delivered, “I can use it when I want to, where I want to, at the time I want to,” as an educational tool that people will pay to learn economics.

They will pay to learn another language and they use that, that’s where the business model for Himalaya comes from is that educational window. And so it is different than ours. Theirs is more, it’s not an education model. It’s not how we learn an additional subject. It’s how we’re entertained or informed or what have you. So just a little context there.

JW: But there’s a bit of an idea that you will pay for education and even here, something more like The Great Courses-plus. So some people will pay to learn something, but they don’t have the same expectation about paying to be entertained, at least in audio form.

Question here. Hello.

Audience member: Hi Peter. I will say as someone who ran the New York Times Knowledge Network, people don’t pay for the education part either. I moderated a session the other day about sensory experiences with audio. So we were talking about ASMR and these different pieces. And I’m wondering, and a lot of people in the audience didn’t know about Autonomous Sensory Meridian Response. And I’m curious that Radiolab aesthetic to Jacob’s earlier point about why we listen to the ads and that kind of thing. I felt like there were some delightful experiences that public radio kind of trained us for. And I’m wondering if you could speak to that a little bit because I’m curious about the ambient part and how, if we’re listening longer, what makes us listen?

There is a sameness to a certain strata of podcasts, right? Radiolab sounds a lot like other shows. A lot of these shows all came out of public radio. But they don’t all sound the same. Joe Rogan doesn’t sound like that. Adam Carolla doesn’t sound like that. Do you think that we’re going to have more and more different kinds of voices or do you think there’s actually kind of a thing that we all want to hear? I assume Bethany’s will sound more like Radiolab than Joe Rogan, for instance.

JW: I think podcasting as a whole comes a lot out of the world of public radio and it largely reflects the values of public radio. It loves narrative. It loves high-quality sound design. It’s a little uncomfortable with opinion and argument for lots of reasons. Radiolab is probably the ultimate expression of this, of what public radio people would make for themselves.

And I think podcasting, you take a lot of those rules away. You take away the 60-minute clock, you take away the FCC, you take away the fear that the congressman is going to get up and yell at you about your funding being taken away. And you’re much freer to express a point of view. And maybe there’s a little less ... there’s plenty of great storytelling in podcasting, but it doesn’t have to be the only thing you do.

But it doesn’t have a similar sound. But maybe I’m just obsessed about that. Next question.

Audience member: I’m Guillermo, founder of Radio Cat. The question is about virality. You mentioned that a podcast aren’t viral. You think that that is inherent to the format or perhaps the lack of the tools in the listening tools to share? For example, if I may need segment on so easy to listen for just following the link for the instead of studying or app. So perhaps there’s lots of friction forbidding the virality of the podcast.

Would it would be easier to make podcasts go viral if we had better tools to make them go viral?

JW: I don’t know what you think, which I think the biggest factor is Facebook doesn’t support podcasting. I don’t mean they don’t support it as a concept, but it doesn’t work the way video does on Facebook. They haven’t dedicated any effort to making podcasts or audio sharable on that or on other major social platforms. And the main support has come through Apple. So that’s dictated just sort of how it works.

MW: I mean, Apple represents 65 percent of the ecosystem.

I’ve noticed whenever — we do transcripts and write-ups of all our podcasts — and even when those things explode and we embed a player, and so you can listen to the podcast right here. So there’s zero friction. You hit a button, you get to listen to it. The people who are reading those stories are not interested in listening to a podcast. It’s a different audience. So we can make it as simple as possible and it has yet to translate.

MW: I think that’s accurate. The audiences are different. The thing that makes podcasting so ... It’s the innate mobility of it. I mean, if I want to gather that content, I can’t drive and read my Vanity Fair publication, but I can listen to it.

Although I just heard, I’m going to betray someone’s confidence here, that Vanity Fair did 400,000 downloads of a Nick Bilton podcast about Theranos because the story had gone viral. So I don’t know how ... And I would be curious to know how many views that turned into podcasts. Let’s go here.

Audience member: Thank you so much for this. It’s been really helpful. So I have a two-parter around metrics. So the first piece is we’ve done a lot of advertising and we send them either to a unique page or have a code. And we find that because it’s not a direct click that listeners may not go to that page. They may go to just the landing page of the advertiser. And that’s I guess the first part is, how do you work with that with marketers and kind of have them see the holistic picture and measure success? And then the second question I have is around downloads versus streams. We find that a lot of listeners will just stream as opposed to download. Why the focus on downloads over total listens?

Because of you, Marshall.

MW: Everybody’s looking at me. So, first of all, bless you for asking the first part of your question because it is a constant in our world to try to interpret the data that we get, because as much we promote, go to our vanity URL or enter my code at checkout or whatever, we forget. We don’t do it. We go to Google and we type in the name of the company and we buy the product through that, even if we’re going to sacrifice a discount or special offer we may get. So all of our clients use that because there is a percentage, it’s relatively low percentage of people who use that vanity tool, that code.

Most of our clients also use an interstitial single-paying survey that comes up during the transaction flow that says, “How’d you hear about us?” And we use that as a proxy or a metric to try and shore up that data. It’s at best, an educated guess. But it is still, even with that educated guess, we’ve found that it’s fundamentally a very successful channel for us. We are working, trying, working diligently to figure out that linkage between an ad being consumed and through some pixel-based tracking or what have you, somebody going to the branded web page, a conversion page, etc. So we’re getting there. And what was second part of your question?

Audience member: Second, the streams.

Downloads versus stream. Do you care?

MW: No I don’t, not from an advertising standpoint.

Do you think the industry cares?

MW: Not at this point.

Are you being told they care?

Audience member: I guess I just ... We hear “downloads” all the time and I was just curious from the perspective of does listens count towards that number?

MW: We look at downloads. And that is a good question because as Spotify moves into this and it becomes an app-based delivery system versus download, RSS feed downloads ...

Because you won’t download on Spotify because you have Spotify, right?

MW: You’ll go through the Spotify app. It’s still a relatively small number of streams versus downloads. Downloads is still the lion’s share. But, I think it’s something we very much need to keep our eye on going forward. And so we’ll ...

Thank you. We can answer ... Sorry. Go on.

MW: No, go ahead.

We can fit in a couple more questions if we go quick.

Audience member: Yeah, I have a question. I listen to the Exponent podcast and they have an episode about Spotify’s entrance into this market. And I’m curious to hear your thoughts about their argument that Spotify could come in and make huge waves by the fact that they solve a lot of the problems you’ve raised like around discoverability, around getting analytics and metrics for player listener behavior in terms of downloads and like how far they listen. And also just simplifying the whole space for integration of ads. It wasn’t really raised so much in this conversation, so I was curious.

So we all get that — we’re all excited because Spotify said, “We’re going to spend a lot of money on podcasts.” That’s good for all of us. But beyond that, are they going to fundamentally change or solve some of these problems?

JW: One thing I think they’re going to do is they’re going to create useful pressure on Apple. So Apple has been a blessing for podcasting. I mean, it exists because of Apple, but they haven’t commercialized it because it’s been too small to be relevant for them. And then unless Apple sees some commercial potential in podcasting, it’s going to be hard for us to do what I was talking about earlier in terms of selling podcasts.

You can’t sell a podcast in the podcast app. And I think we would like to see Apple, speaking for myself, we would like to see them feel some pressure. I think Spotify creates some pressure. They probably say they don’t care about it, but I think they’re paying attention. Spotify starts from a very low base but is gaining share and they are inevitably gaining that share largely at the expense of Apple, which starts with a majority of listeners. So, I think ...

But Jacob, the counter to that is that Apple is going to announce in a couple of weeks, “Here’s our new mega subscription product. It’s going to have some news in there and something. And definitely video because we just spent a couple of billion dollars making TV shows.” My educated hunch is that there won’t be any podcasting in there, in part because it’s not a big enough business for them to care about. The business collectively is maybe half a billion dollars. Apple famously doesn’t care unless they can make a billion dollars or much more on any individual product.

JW: It’s pointed in that direction. And I think Apple, there may be a case to be made to Apple or at Apple that their entry into the business would significantly increase the total. If they started selling a bundled product around podcasts, that could make podcasting a billion-dollar business tomorrow. I don’t know what they’re going to do.

Question here.

Audience member: So I’m Dan Costa, editor-in-chief of PC Mag. I’ve got a podcast called Fast Forward, which has far fewer than 50,000 subscribers. But my question’s about smart speakers, Google Home, the Amazon Alexa. Have you seen people using this to consume podcasts? Do you think it’s going to grow up and sort of broaden the base or is it still just a headphone experience?

JW: Do you ...?

BM: I’ve never used it that way.

JW: Bless you.

MW: There is some growth there.

BM: Interesting.

MW: Still very small. But there is growth there and it’s something. I asked this question at a panel, I believe it was Saturday, and it was the guy who’s the head of monetization at the New York Times. And he said, “It’s something I think we very much have to pay attention to.” Because I don’t think that the consumer has started to use Alexa or Google Home or whatever it may be for that particular application to a great extent yet. But … as this generation that is going to grow up on this device matures, that will be their de facto, “This is how I’m going to get what I want to get.”

Thank you again. Guy in the cool hat, you get to ask the last question.

Audience member: Cheers. Thanks very much. So I’m not in the podcasting business. Might be a naive question, but it seems there’s a big advantage to actually having people listening on your platform because you’re at that touchpoint. You can get these kinds of analytics that you guys have been talking about, about the way podcasts are currently distributed and consumed is really not friendly to that. And so how do you create a platform where you can get that data and be part of that interaction given the current climate where people want to download it in a million different places or stream or whatever?

Do you want to create your own platform or are you happy using the existing Spotify, Facebook, Apple, and all these other giant distribution points that exist already?

JW: I think you’ve just explained why so many podcasts companies have been drawn to create their own platform. Because if you have an app, you can get all that data on the listeners in the app, but it’s probably going to be of a very small fraction of the overall listenership.

So with our company, we didn’t think about doing that. We’re focused on the content and making shows that will be distributed, potentially, in different ways. But you’ve seen a series of apps created, and as a listener, a few of those, I mean the Overcast, which I think is really good, Breaker which I think is really good, offer listener features that are well beyond what you can get now in Apple. But they have small, dedicated audiences relative to the whole market.

MW: If you’d like to call Apple on the phone and say, “Hey, could you do this?” We’re open to that.

Look they’re here, where you can find them. I’m not going to point them out. Marshall, Bethany, Jacob, you guys are great. This is a great audience. Thank you for your time. I appreciate it.

MW: Thank you, Peter.

BM: That’s a good job. Thank you.

This article originally appeared on Recode.net.