1 00:00:12,599 --> 00:00:13,839 [Reid Mercer] Welcome back to The Download. 2 00:00:14,119 --> 00:00:17,219 [Reid Mercer] I'm Reid Mercer, and this week's docket got busy fast. 3 00:00:17,980 --> 00:00:22,440 [Reid Mercer] Spotify is testing a skip ahead button that lets Premium subscribers jump 4 00:00:22,539 --> 00:00:27,329 [Reid Mercer] straight past podcast ads, and network sales teams are already panicking. 5 00:00:28,019 --> 00:00:30,559 [Reid Mercer] I got three calls about it this week alone. 6 00:00:30,660 --> 00:00:35,200 [Reid Mercer] Nobody's asking the right question yet, which is: What happens to attribution 7 00:00:35,460 --> 00:00:37,030 [Reid Mercer] once skip data exists? 8 00:00:37,759 --> 00:00:41,899 [Reid Mercer] Then there's Disney and Hulu striking a licensing deal with iHeartMedia. 9 00:00:42,380 --> 00:00:46,070 [Reid Mercer] Six shows starting with the Jonas Brothers, and it smells a lot 10 00:00:46,119 --> 00:00:48,210 [Reid Mercer] like nineteen-nineties cable carriage. 11 00:00:49,020 --> 00:00:53,679 [Reid Mercer] Somewhere in between, Obama's launching a book podcast, Joe Budden's doing true 12 00:00:53,799 --> 00:00:58,100 [Reid Mercer] crime, and Rogan's economics remain frankly absurd. 13 00:00:58,719 --> 00:01:02,060 [Reid Mercer] Three very different bets on what talent is actually worth. 14 00:01:02,799 --> 00:01:05,480 [Reid Mercer] And by the end of the hour, you'll have three questions for 15 00:01:05,500 --> 00:01:06,930 [Reid Mercer] your own team on Monday morning. 16 00:01:07,599 --> 00:01:08,230 [Reid Mercer] Follow the money. 17 00:01:08,739 --> 00:01:12,640 [Reid Mercer] First stop, that skip button and the ad math nobody's run yet. 18 00:01:18,480 --> 00:01:19,579 [Reid Mercer] We wanna hear from you. 19 00:01:19,980 --> 00:01:23,219 [Reid Mercer] Submit questions via the web form in the description, or give us 20 00:01:23,280 --> 00:01:27,239 [Reid Mercer] a call at seven four seven two three four two six seven 21 00:01:27,280 --> 00:01:28,480 [Reid Mercer] eight and leave your question. 22 00:01:28,819 --> 00:01:29,799 [Reid Mercer] Don't be shy. 23 00:01:29,840 --> 00:01:32,579 [Reid Mercer] Our AI assistant makes it super easy. 24 00:01:38,120 --> 00:01:42,920 [Reid Mercer] Spotify just gave Premium subscribers a button that skips podcast ads it 25 00:01:42,939 --> 00:01:46,719 [Reid Mercer] didn't sell, and the reaction from the industry is somewhere between a 26 00:01:46,760 --> 00:01:48,299 [Reid Mercer] fire drill and a funeral. 27 00:01:54,120 --> 00:01:57,920 [Reid Mercer] Building on that pricing problem, watch what iHeart just did about it. 28 00:01:58,480 --> 00:02:02,200 [Reid Mercer] Reuters reported this morning that Disney Plus and Hulu struck a video 29 00:02:02,340 --> 00:02:05,459 [Reid Mercer] podcasting deal with iHeart: six titles. 30 00:02:05,500 --> 00:02:07,840 [Reid Mercer] It starts with the Jonas Brothers' Hey Jonas. 31 00:02:08,439 --> 00:02:11,800 [Reid Mercer] Todd Spangler at Variety filled in the rest of the slate: Pod 32 00:02:11,819 --> 00:02:15,919 [Reid Mercer] Meets World, plus four more shows headed to Hulu, and Disney's own 33 00:02:15,960 --> 00:02:18,699 [Reid Mercer] press release nailed the date: August fourteenth. 34 00:02:19,340 --> 00:02:22,319 [Reid Mercer] Now, everyone's calling this a streaming expansion story. 35 00:02:22,800 --> 00:02:23,460 [Reid Mercer] It isn't. 36 00:02:23,500 --> 00:02:25,719 [Reid Mercer] It's a carriage deal wearing a different jacket. 37 00:02:26,289 --> 00:02:27,829 [Reid Mercer] Think about cable in the nineties. 38 00:02:28,319 --> 00:02:33,780 [Reid Mercer] MVPDs paid retransmission fees for channels they needed to keep subscribers happy. 39 00:02:33,819 --> 00:02:37,150 [Reid Mercer] The channel owner gave up some control, got guaranteed reach. 40 00:02:37,680 --> 00:02:40,780 [Reid Mercer] Same trade here, just no cash carriage fee. 41 00:02:40,840 --> 00:02:42,780 [Reid Mercer] This is a licensing arrangement. 42 00:02:42,879 --> 00:02:44,719 [Reid Mercer] iHeart hands Disney the content. 43 00:02:45,120 --> 00:02:48,520 [Reid Mercer] Disney gets premium podcast inventory it didn't have to build. 44 00:02:49,159 --> 00:02:51,419 [Reid Mercer] So who's actually winning the ad line? 45 00:02:52,080 --> 00:02:54,979 [Reid Mercer] That's the question nobody in either press release answers. 46 00:02:55,560 --> 00:02:58,939 [Reid Mercer] If Disney sells the ad inventory around these shows on its platform, 47 00:02:59,419 --> 00:03:02,080 [Reid Mercer] iHeart's traded margin control for distribution. 48 00:03:02,479 --> 00:03:05,879 [Reid Mercer] Classic carriage economics: You give up the toll booth to get on 49 00:03:05,919 --> 00:03:06,430 [Reid Mercer] the highway. 50 00:03:06,989 --> 00:03:09,379 [Reid Mercer] And why would iHeart take that trade? 51 00:03:09,460 --> 00:03:14,479 [Reid Mercer] Because the real fight isn't Disney versus iHeart; it's everybody versus YouTube. 52 00:03:14,520 --> 00:03:18,560 [Reid Mercer] Frank Racioppis piece, the one flagging YouTube driving forty percent of new 53 00:03:18,599 --> 00:03:22,530 [Reid Mercer] show discovery, that's the number keeping every network executive up at night. 54 00:03:23,139 --> 00:03:26,000 [Reid Mercer] Video podcasting stopped being a format experiment. 55 00:03:26,300 --> 00:03:30,659 [Reid Mercer] It's a distribution arms race now, and audio-only players are scrambling for 56 00:03:30,840 --> 00:03:32,520 [Reid Mercer] any screen that isn't YouTube's. 57 00:03:33,159 --> 00:03:36,659 [Reid Mercer] Here's what's interesting about Disney's side of this: They're not building a 58 00:03:36,719 --> 00:03:38,759 [Reid Mercer] podcast division; they're renting one. 59 00:03:39,280 --> 00:03:42,479 [Reid Mercer] Six shows licensed, slotted into an existing app. 60 00:03:42,879 --> 00:03:47,199 [Reid Mercer] No original podcast infrastructure, no ad sales team built from scratch. 61 00:03:47,719 --> 00:03:52,129 [Reid Mercer] Disney is testing whether podcast content pulls engagement on their platform with 62 00:03:52,240 --> 00:03:54,939 [Reid Mercer] someone else's balance sheet absorbing the production risk. 63 00:03:55,370 --> 00:03:57,150 [Reid Mercer] That's a cheap option to buy. 64 00:03:57,180 --> 00:03:58,699 [Reid Mercer] If it works, they scale it. 65 00:03:58,780 --> 00:04:01,870 [Reid Mercer] If it doesn't, they let the license lapse, and iHeart's the one 66 00:04:01,879 --> 00:04:03,829 [Reid Mercer] who overbuilt for a partner that walked. 67 00:04:04,210 --> 00:04:09,020 [Reid Mercer] So ask yourself, if you're running content strategy at a mid-sized network 68 00:04:09,060 --> 00:04:12,370 [Reid Mercer] right now, do you have a marquee show good enough to get 69 00:04:12,500 --> 00:04:14,379 [Reid Mercer] a platform like Disney on the phone? 70 00:04:14,979 --> 00:04:17,740 [Reid Mercer] Because that's the leverage question underneath all of this. 71 00:04:18,420 --> 00:04:20,480 [Reid Mercer] iHeart didn't get this deal on volume. 72 00:04:20,920 --> 00:04:25,180 [Reid Mercer] They got it on shows Disney actually wanted, which is exactly why 73 00:04:25,240 --> 00:04:27,939 [Reid Mercer] the next name on iHeart's roster matters so much. 74 00:04:28,480 --> 00:04:32,759 [Reid Mercer] A former president signing on for six books is a very different 75 00:04:32,860 --> 00:04:35,639 [Reid Mercer] kind of leverage than Jonas Brothers nostalgia. 76 00:04:41,379 --> 00:04:45,860 [Reid Mercer] Building on that leverage point, Obama's the next data point on prestige 77 00:04:45,939 --> 00:04:46,600 [Reid Mercer] inventory. 78 00:04:47,160 --> 00:04:51,860 [Reid Mercer] Audible and Higher Ground announced A Great Book, his own book podcast 79 00:04:51,959 --> 00:04:56,910 [Reid Mercer] launching September twenty-fourth, and iHeartRadio's own trade coverage was the one that 80 00:04:56,939 --> 00:04:57,439 [Reid Mercer] picked it up. 81 00:04:58,129 --> 00:05:01,980 [Reid Mercer] The New York Times covered the same launch, tying it to Obama's 82 00:05:02,000 --> 00:05:03,740 [Reid Mercer] broader deal with Higher Ground. 83 00:05:04,399 --> 00:05:07,500 [Reid Mercer] Notice that iHeart is covering someone else's show. 84 00:05:08,079 --> 00:05:11,040 [Reid Mercer] That's how scarce real marquee talent has gotten. 85 00:05:11,639 --> 00:05:15,759 [Reid Mercer] Every network wants the same handful of household names near their ad 86 00:05:15,839 --> 00:05:16,439 [Reid Mercer] inventory. 87 00:05:17,319 --> 00:05:21,079 [Reid Mercer] Now flip that against two live models already running. 88 00:05:21,120 --> 00:05:27,860 [Reid Mercer] MarketWatch sized up Joe Rogan's economics this week, framed around his fourteen-point-four-million-dollar 89 00:05:27,959 --> 00:05:28,759 [Reid Mercer] Austin home. 90 00:05:29,319 --> 00:05:30,680 [Reid Mercer] The house isn't the story. 91 00:05:31,120 --> 00:05:35,319 [Reid Mercer] The story is one show carrying an entire operation on its own 92 00:05:35,379 --> 00:05:35,839 [Reid Mercer] gravity. 93 00:05:36,600 --> 00:05:37,800 [Reid Mercer] Then there's Joe Budden. 94 00:05:38,220 --> 00:05:43,540 [Reid Mercer] Today, August eleventh, Wolf Entertainment launches Crime in America with Joe Budden, 95 00:05:43,980 --> 00:05:47,839 [Reid Mercer] built in partnership with Advance, not as a solo empire. 96 00:05:48,500 --> 00:05:54,160 [Reid Mercer] Same category, same marquee name playbook, completely different structure underneath it. 97 00:05:55,060 --> 00:05:58,839 [Reid Mercer] Here's my problem with all three: A big name buys you real 98 00:05:58,920 --> 00:05:59,399 [Reid Mercer] things. 99 00:05:59,759 --> 00:06:01,579 [Reid Mercer] Sales meetings get booked faster. 100 00:06:02,060 --> 00:06:04,360 [Reid Mercer] Sponsors show up more confident in the room. 101 00:06:04,968 --> 00:06:09,177 [Reid Mercer] What it doesn't reliably buy is download growth that holds past the 102 00:06:09,228 --> 00:06:10,007 [Reid Mercer] launch window. 103 00:06:10,648 --> 00:06:14,987 [Reid Mercer] Rogan is the exception, not the rule, and every network chasing that 104 00:06:15,048 --> 00:06:18,447 [Reid Mercer] outcome is pricing an outlier in as a base case. 105 00:06:19,208 --> 00:06:20,367 [Reid Mercer] Ask your team this. 106 00:06:20,887 --> 00:06:25,767 [Reid Mercer] Does the audience actually compound month over month, or does it spike 107 00:06:25,807 --> 00:06:29,827 [Reid Mercer] at launch and settle back to whatever a competent unknown host would 108 00:06:29,848 --> 00:06:30,848 [Reid Mercer] have drawn anyway? 109 00:06:31,427 --> 00:06:34,968 [Reid Mercer] Nobody wants to run that math when the deck already has a 110 00:06:35,007 --> 00:06:36,468 [Reid Mercer] Jonas Brothers slide in it. 111 00:06:37,228 --> 00:06:40,858 [Reid Mercer] Six months from now, check which of these three shows still has 112 00:06:40,927 --> 00:06:42,487 [Reid Mercer] a rate card holding steady. 113 00:06:43,267 --> 00:06:47,348 [Reid Mercer] And July's ad spend numbers just landed, which means we're about to 114 00:06:47,408 --> 00:06:52,148 [Reid Mercer] find out if the money's actually there to support any of this. 115 00:06:56,947 --> 00:07:01,617 [Reid Mercer] Speaking of money, July's numbers just landed, and they tell you exactly 116 00:07:01,648 --> 00:07:02,807 [Reid Mercer] who's nervous. 117 00:07:02,848 --> 00:07:08,327 [Reid Mercer] According to Podcast News Daily, overall ad spend eased last month, but 118 00:07:08,447 --> 00:07:13,887 [Reid Mercer] six of the top 10 advertisers actually increased their commitment, and Shopify 119 00:07:14,028 --> 00:07:15,367 [Reid Mercer] held the number one spot. 120 00:07:15,968 --> 00:07:20,788 [Reid Mercer] So the incumbents are doubling down, while the marginal buyer pulls back. 121 00:07:20,867 --> 00:07:23,887 [Reid Mercer] Money's consolidating around proven performers. 122 00:07:29,788 --> 00:07:31,487 [Reid Mercer] So that's the download today. 123 00:07:31,528 --> 00:07:33,608 [Reid Mercer] The skip button isn't a UX story. 124 00:07:33,627 --> 00:07:37,048 [Reid Mercer] It's a pricing lever, and it exposes something the industry's dodged for 125 00:07:37,108 --> 00:07:37,468 [Reid Mercer] years. 126 00:07:37,827 --> 00:07:40,668 [Reid Mercer] Host-read ads with no verified completion metric. 127 00:07:41,267 --> 00:07:42,528 [Reid Mercer] And the iHeart-Disney deal? 128 00:07:42,887 --> 00:07:45,057 [Reid Mercer] Same pattern as the 1990s carriage fights. 129 00:07:45,427 --> 00:07:47,608 [Reid Mercer] Reach traded for margin control. 130 00:07:47,687 --> 00:07:49,548 [Reid Mercer] Watch that ad line closely. 131 00:07:49,588 --> 00:07:52,947 [Reid Mercer] If you run sales or ops, bring three questions to your team 132 00:07:52,987 --> 00:07:53,757 [Reid Mercer] Monday. 133 00:07:53,827 --> 00:07:55,168 [Reid Mercer] What's your skip exposure? 134 00:07:55,228 --> 00:07:56,468 [Reid Mercer] Who owns the impression data? 135 00:07:56,817 --> 00:08:01,887 [Reid Mercer] And who actually monetizes inventory when a big platform licenses your content? 136 00:08:01,898 --> 00:08:03,567 [Reid Mercer] That's the homework that matters this week. 137 00:08:04,168 --> 00:08:05,788 [Reid Mercer] Forward this to a colleague who needs it. 138 00:08:06,168 --> 00:08:09,507 [Reid Mercer] Tips and feedback go to thedownload at heymato.com. 139 00:08:09,987 --> 00:08:10,648 [Reid Mercer] Thanks for listening. 140 00:08:10,887 --> 00:08:13,267 [Reid Mercer] Back next week with more signal, less noise.