How Luminary’s Messy Debut Ended Up Roiling the Podcast Industry

What was supposed to be a splashy coming-out party for a buzzy entrant into the podcast industry turned out to be an awkward, painful thud.

This week saw the launch of Luminary, a new audio content app with bold ambitions to become the “Netflix of Podcasting.” The startup wants to build a big paid subscription business around the largely open and ad-supported podcast ecosystem. This isn’t a particularly new idea or aspiration, but it’s a recognizable one that has never been achieved at major, meaningful scale.

Since its founding last summer, Luminary proceeded to make a number of eye-catching moves. It raised a whopping $100 million in venture capital, a level of cash the industry has never seen in one single upstart before. It went about creating its content portfolio by signing exclusive deals with some preexisting podcast makers (including Love+Radio, I Am Rapaport, and the team behind Slow Burn) and several celebrities to build new audio properties around (including Trevor Noah, Lena Dunham, and Karamo Brown). (Disclosure: New York is also developing a podcast with Luminary.) It took out a bunch of advertising on Instagram, other podcasts, and signage on the side of Los Angeles buses as well as a billboard in downtown Manhattan. Its press efforts resulted in a few brand-building write-ups by the New York Times.

All of Luminary’s machinations felt really big, and to some extent, much of its scale felt somewhat new. This deeply moneyed newcomer — $100 million in venture capital! Think about how many audio shows can you fund with that! — felt to many in the podcast community like the beginning of a sharp, noteworthy turn for its budding industry.

Cut to launch, which was this past Tuesday. Things didn’t go quite as expected — which is to say, things went far south almost immediately.

It turned out that the Luminary app didn’t just offer a closed roster of exclusive podcasts that listeners had to pay for, but instead positioned itself as a dual service: You could use it as a standard podcast app to listen to any other podcast in the universe (dubbed the “free tier” on the platform) in addition to using it for the layer of paid exclusives sitting underneath all that. This came as a surprise to many major publishers in the podcast industry, some of which were already wary about the potential competition that Luminary might bring to their ad-supported businesses. Also a surprise to these publishers: the fact that many of their shows appeared on Luminary’s free tier.

That surprise quickly turned into frustration. Luminary had sought to present itself as a mutually-beneficial player in the podcast ecosystem, arguing that its free tier is meant to support everyone else’s podcasts while serving as a complement to its paid subscription business. But many podcast publishers saw something different: Luminary was using their shows to attract listeners to download their app, after which they may discover its paid subscriptions business. Worse, still, the app was doing so without explicit permission or an agreed-upon framework of how this would work.

Those frustrations triggered what became a horrific launch week for the buzzy podcast startup. The day before launch, The Verge broke the story that Spotify, which recently acquired Gimlet Media and Parcast, would be denying Luminary access to their shows on the platform, while the New York Times had requested The Daily, its wildly popular daily news podcast, to be pulled off the platform. They wouldn’t be the only ones. The day after launch, I broke the news that The Joe Rogan Experience, widely thought to be among the most-downloaded podcast in active operation, moved to do the same thing. Since then, a host of other major podcast publishers have followed suit, including Endeavor Audio, PodcastOne, and Barstool Sports, among others.

The stated reasoning around these pushbacks revolve around licensing and permissions. Several publishers cited the fact that Luminary had not appropriately informed them about the use of their shows on the platform. This might seem like a basic thing to overlook, but within context, Luminary’s oversight here is somewhat understandable. Licensing agreements weren’t really a thing in podcasting until only recently. Historically, podcasting was carried forward in the spirit of open internet publishing; if someone built a distribution tool — say, a podcast app — in accordance to a set of open protocols, the norms are such that the app can be used to access just about whatever podcast that was published into the open ecosystem. The one condition was to make sure the podcasts got accurate reads on the listeners they were getting.

But the broad shape of podcasting has changed somewhat over the past few years as more established streaming platforms, like Spotify and TuneIn, have entered the space as distributors. With their growing presence as podcast distributors, there has been an increasing precedent where those platforms would preemptively reach out to publishers and strike formal licensing agreements so both sides can be certain on who owns what, and all sides can go about their days without impacting each others’ business models. This precedent has mostly applied to established platforms, though, and the rising expectation for direct licensing agreements largely hasn’t impacted the wider universe of third party podcast apps, like Pocket Casts, Overcast, Castro, Podcast Addict, and so on — at least not yet.

It’s entirely likely that Luminary entered the fray thinking it would be allowed the cultural affordances of those third-party apps and not be held to the standards of the more established platforms. But as we now see, that was not how major podcast publishers ended up receiving them. A good chunk of that reception has to do with Luminary’s ambition, its $100 million war chest, and the likely competitive implications of its potential success — given what many publishers know about how Netflix had impacted the film and television business, one could forgive them for being wary. Luminary, as well, had not done itself any favors with a previous marketing gaffe: a few weeks ago, its official Twitter account published a Sign Bunny meme with the message: “Podcasts don’t need ads,” seemingly negging the primary business model that powers almost every podcast in existence. The tweet was subsequently ratioed into oblivion by the podcast community, prompting Luminary to delete it and issue an apology. This seems like a minor branding kerfuffle, but its effects have lingered. Since the fracas, I’ve spoken with a number of podcast company executives who point to the tweet as indication of an anti-ads stance held by the startup. This, they argue, differentiates Luminary from the open podcasting spirit of any other third-party podcast app.

The rough rollout did not stop with licensing and permission issues. Two days after launch, some prominent podcasters — including Overcast creator Marco Arment and Mac Stories founder Federico Viticci, both prominent open publishing advocates — found that Luminary had been populating its free tier using a technical methodology that could send inaccurate or incomplete listening data back to podcast publishers. Meanwhile, other podcasters, like The Greatest Generation’s Benjamin Ahr Harrison, had found that Luminary was altering the show notes of their listings on the platform, most notably taking out links. This is a problematic move as many publishers, particularly smaller and independent ones, rely on linking to sponsors and direct donation appeals in the show notes as integral aspects of their business models. These podcasters, too, issued requests for their shows to be removed from the platform.

Luminary has since issued an apology (once again), stating that the company is in the process of making the appropriate technical changes. But they also did themselves one more disfavor: seemingly doubling down on the link removals from the show notes, citing “important security reasons.” As of this writing, the outrage within the podcast community continues to smolder, and $100 million in venture capital has perhaps never felt so underutilized.

So goes Luminary’s official introduction to the podcast world. It remains to be seen whether the aspiring “Netflix for Podcasting” will survive its messy launch week — maybe enough people will ultimately pay for access to a Trevor Noah or Lena Dunham show; maybe the company will win over and figure something out with Spotify, the New York Times, Joe Rogan, and the rest; maybe the company will pivot accordingly — who knows. For now, we’ll have to wait to see whether or not Luminary’s future is as bright as the app’s sunny yellow color scheme suggests.

[“source=vulture”]