[Reid Mercer] Welcome back to The Download.
[Reid Mercer] I'm Reid Mercer, and this week's docket got busy fast.
[Reid Mercer] Spotify is testing a skip ahead button that lets Premium subscribers jump
[Reid Mercer] straight past podcast ads, and network sales teams are already panicking.
[Reid Mercer] I got three calls about it this week alone.
[Reid Mercer] Nobody's asking the right question yet, which is: What happens to attribution
[Reid Mercer] once skip data exists?
[Reid Mercer] Then there's Disney and Hulu striking a licensing deal with iHeartMedia.
[Reid Mercer] Six shows starting with the Jonas Brothers, and it smells a lot
[Reid Mercer] like nineteen-nineties cable carriage.
[Reid Mercer] Somewhere in between, Obama's launching a book podcast, Joe Budden's doing true
[Reid Mercer] crime, and Rogan's economics remain frankly absurd.
[Reid Mercer] Three very different bets on what talent is actually worth.
[Reid Mercer] And by the end of the hour, you'll have three questions for
[Reid Mercer] your own team on Monday morning.
[Reid Mercer] Follow the money.
[Reid Mercer] First stop, that skip button and the ad math nobody's run yet.
[Reid Mercer] We wanna hear from you.
[Reid Mercer] Submit questions via the web form in the description, or give us
[Reid Mercer] a call at seven four seven two three four two six seven
[Reid Mercer] eight and leave your question.
[Reid Mercer] Don't be shy.
[Reid Mercer] Our AI assistant makes it super easy.
[Reid Mercer] Spotify just gave Premium subscribers a button that skips podcast ads it
[Reid Mercer] didn't sell, and the reaction from the industry is somewhere between a
[Reid Mercer] fire drill and a funeral.
[Reid Mercer] Building on that pricing problem, watch what iHeart just did about it.
[Reid Mercer] Reuters reported this morning that Disney Plus and Hulu struck a video
[Reid Mercer] podcasting deal with iHeart: six titles.
[Reid Mercer] It starts with the Jonas Brothers' Hey Jonas.
[Reid Mercer] Todd Spangler at Variety filled in the rest of the slate: Pod
[Reid Mercer] Meets World, plus four more shows headed to Hulu, and Disney's own
[Reid Mercer] press release nailed the date: August fourteenth.
[Reid Mercer] Now, everyone's calling this a streaming expansion story.
[Reid Mercer] It isn't.
[Reid Mercer] It's a carriage deal wearing a different jacket.
[Reid Mercer] Think about cable in the nineties.
[Reid Mercer] MVPDs paid retransmission fees for channels they needed to keep subscribers happy.
[Reid Mercer] The channel owner gave up some control, got guaranteed reach.
[Reid Mercer] Same trade here, just no cash carriage fee.
[Reid Mercer] This is a licensing arrangement.
[Reid Mercer] iHeart hands Disney the content.
[Reid Mercer] Disney gets premium podcast inventory it didn't have to build.
[Reid Mercer] So who's actually winning the ad line?
[Reid Mercer] That's the question nobody in either press release answers.
[Reid Mercer] If Disney sells the ad inventory around these shows on its platform,
[Reid Mercer] iHeart's traded margin control for distribution.
[Reid Mercer] Classic carriage economics: You give up the toll booth to get on
[Reid Mercer] the highway.
[Reid Mercer] And why would iHeart take that trade?
[Reid Mercer] Because the real fight isn't Disney versus iHeart; it's everybody versus YouTube.
[Reid Mercer] Frank Racioppis piece, the one flagging YouTube driving forty percent of new
[Reid Mercer] show discovery, that's the number keeping every network executive up at night.
[Reid Mercer] Video podcasting stopped being a format experiment.
[Reid Mercer] It's a distribution arms race now, and audio-only players are scrambling for
[Reid Mercer] any screen that isn't YouTube's.
[Reid Mercer] Here's what's interesting about Disney's side of this: They're not building a
[Reid Mercer] podcast division; they're renting one.
[Reid Mercer] Six shows licensed, slotted into an existing app.
[Reid Mercer] No original podcast infrastructure, no ad sales team built from scratch.
[Reid Mercer] Disney is testing whether podcast content pulls engagement on their platform with
[Reid Mercer] someone else's balance sheet absorbing the production risk.
[Reid Mercer] That's a cheap option to buy.
[Reid Mercer] If it works, they scale it.
[Reid Mercer] If it doesn't, they let the license lapse, and iHeart's the one
[Reid Mercer] who overbuilt for a partner that walked.
[Reid Mercer] So ask yourself, if you're running content strategy at a mid-sized network
[Reid Mercer] right now, do you have a marquee show good enough to get
[Reid Mercer] a platform like Disney on the phone?
[Reid Mercer] Because that's the leverage question underneath all of this.
[Reid Mercer] iHeart didn't get this deal on volume.
[Reid Mercer] They got it on shows Disney actually wanted, which is exactly why
[Reid Mercer] the next name on iHeart's roster matters so much.
[Reid Mercer] A former president signing on for six books is a very different
[Reid Mercer] kind of leverage than Jonas Brothers nostalgia.
[Reid Mercer] Building on that leverage point, Obama's the next data point on prestige
[Reid Mercer] inventory.
[Reid Mercer] Audible and Higher Ground announced A Great Book, his own book podcast
[Reid Mercer] launching September twenty-fourth, and iHeartRadio's own trade coverage was the one that
[Reid Mercer] picked it up.
[Reid Mercer] The New York Times covered the same launch, tying it to Obama's
[Reid Mercer] broader deal with Higher Ground.
[Reid Mercer] Notice that iHeart is covering someone else's show.
[Reid Mercer] That's how scarce real marquee talent has gotten.
[Reid Mercer] Every network wants the same handful of household names near their ad
[Reid Mercer] inventory.
[Reid Mercer] Now flip that against two live models already running.
[Reid Mercer] MarketWatch sized up Joe Rogan's economics this week, framed around his fourteen-point-four-million-dollar
[Reid Mercer] Austin home.
[Reid Mercer] The house isn't the story.
[Reid Mercer] The story is one show carrying an entire operation on its own
[Reid Mercer] gravity.
[Reid Mercer] Then there's Joe Budden.
[Reid Mercer] Today, August eleventh, Wolf Entertainment launches Crime in America with Joe Budden,
[Reid Mercer] built in partnership with Advance, not as a solo empire.
[Reid Mercer] Same category, same marquee name playbook, completely different structure underneath it.
[Reid Mercer] Here's my problem with all three: A big name buys you real
[Reid Mercer] things.
[Reid Mercer] Sales meetings get booked faster.
[Reid Mercer] Sponsors show up more confident in the room.
[Reid Mercer] What it doesn't reliably buy is download growth that holds past the
[Reid Mercer] launch window.
[Reid Mercer] Rogan is the exception, not the rule, and every network chasing that
[Reid Mercer] outcome is pricing an outlier in as a base case.
[Reid Mercer] Ask your team this.
[Reid Mercer] Does the audience actually compound month over month, or does it spike
[Reid Mercer] at launch and settle back to whatever a competent unknown host would
[Reid Mercer] have drawn anyway?
[Reid Mercer] Nobody wants to run that math when the deck already has a
[Reid Mercer] Jonas Brothers slide in it.
[Reid Mercer] Six months from now, check which of these three shows still has
[Reid Mercer] a rate card holding steady.
[Reid Mercer] And July's ad spend numbers just landed, which means we're about to
[Reid Mercer] find out if the money's actually there to support any of this.
[Reid Mercer] Speaking of money, July's numbers just landed, and they tell you exactly
[Reid Mercer] who's nervous.
[Reid Mercer] According to Podcast News Daily, overall ad spend eased last month, but
[Reid Mercer] six of the top 10 advertisers actually increased their commitment, and Shopify
[Reid Mercer] held the number one spot.
[Reid Mercer] So the incumbents are doubling down, while the marginal buyer pulls back.
[Reid Mercer] Money's consolidating around proven performers.
[Reid Mercer] So that's the download today.
[Reid Mercer] The skip button isn't a UX story.
[Reid Mercer] It's a pricing lever, and it exposes something the industry's dodged for
[Reid Mercer] years.
[Reid Mercer] Host-read ads with no verified completion metric.
[Reid Mercer] And the iHeart-Disney deal?
[Reid Mercer] Same pattern as the 1990s carriage fights.
[Reid Mercer] Reach traded for margin control.
[Reid Mercer] Watch that ad line closely.
[Reid Mercer] If you run sales or ops, bring three questions to your team
[Reid Mercer] Monday.
[Reid Mercer] What's your skip exposure?
[Reid Mercer] Who owns the impression data?
[Reid Mercer] And who actually monetizes inventory when a big platform licenses your content?
[Reid Mercer] That's the homework that matters this week.
[Reid Mercer] Forward this to a colleague who needs it.
[Reid Mercer] Tips and feedback go to thedownload at heymato.com.
[Reid Mercer] Thanks for listening.
[Reid Mercer] Back next week with more signal, less noise.