washingtonmonthly--2020-10-26--Big Tech Comes for Podcasts

Big Tech Comes for Podcasts

The Daily is perhaps the most successful news product at the country ’ s most successful newspaper .
Each weekday morning , a new episode of the New York Times podcast appears on millions of phones .
Host Michael Barbaro , a former Times politics reporter , might talk one day to the White House correspondent Maggie Haberman about the latest Trump palace intrigue , and the next to a reporter in the Moscow bureau about unrest in Belarus .
The show is a wildly successful experiment that attracts a much larger audience than the front page of the print @ @ @ @ @ @ @ ad revenue from the likes of BMW , Chanel , and Fidelity Insurance .
At a time when the financial viability of the news industry is very much in doubt , The Daily is an encouraging counterexample .
The Times is at the forefront of a broader podcasting boom .
Ad revenue for podcasts increased by nearly 50 percent last year , according to an estimate from the Interactive Advertising Bureau , and is projected to top $ 800 million this year .
Regional newspapers like The Atlanta Journal-Constitution , The Texas Tribune @ @ @ @ @ @ @ gotten into podcasting , as have many online magazines and public radio stations .
Slate now makes about half of its revenue from its podcasts .
Vox Media expanded from a handful of shows in 2017 to more than 200 shows in 2020 .
Revenue from podcasting is expected to double this year .
“ We went from it being a hobby , to strategy , to a big pillar of the company , ” says Marty Moe , president of Vox Media Studios .
Podcasting is also a sector where it ’ @ @ @ @ @ @ @ voices to break in .
The former radio reporter Amy Westervelt founded her own network , Critical Frequency , in 2017 .
Just two years later , it won AdWeek ’ s annual award for best podcast network of the year .
Podcasting also provides space for in-depth reporting , something that has become increasingly difficult to fund in other media .
Long investigative reports on technical subjects can be turned into explanatory miniseries , as BuzzFeed did in September with an exposé on big banks ’ role in financing terror and drug @ @ @ @ @ @ @ segregation , can be excavated through compelling storytelling , as with Nice White Parents , a New York Times podcast tracing the history of one Brooklyn school .
“ The space for high-quality content , and quality journalism , has been contracting for economic reasons for many years now , ” says Jacob Weisberg , CEO of Pushkin Industries , a podcast production company he started after years as the editor in chief of the Slate Group .
“ I see podcasts very much as a place to enlarge that space.
” But @ @ @ @ @ @ @ increasing threat .
The medium stands in danger of being rolled up by monopolistic tech platforms that could come to own and control the marketplace itself .
With that power , they could suck away much of the value created by talented podcasters , just as Amazon stole away the income of even many best-selling authors after it came to own and control most of the digital infrastructure on which e-books are sold .
The most immediate incursion from Big Tech is Spotify , the music-streaming giant , which has already made aggressive @ @ @ @ @ @ @ podcast gatekeeper .
It has acquired several production companies and cut exclusive deals with top podcasters , like Joe Rogan , requiring that they remove their shows from all other platforms .
But behind Spotify loom even more powerful actors .
Its forays appear to have piqued the attention of Amazon and Google , and possibly even Apple , which has long functioned as a passive , benevolent monopolist over podcast distribution .
There ’ s nothing inherently wrong with market platforms .
The trouble arises when marketplaces come under the control of @ @ @ @ @ @ @ to their own advantage , at the expense of everyone else who relies on them .
The recent House antitrust subcommittee report on tech monopolies illustrates what this can look like .
The investigation found evidence that Amazon exploits the data it gathers on third-party sellers who use its online market to undercut those very merchants ; that Google put a thumb on the scale to feature its own products , like Chrome and Google Shopping , over competitors even when its engineers knew those offerings wouldn ’ t naturally rise to the @ @ @ @ @ @ @ that Apple uses its control over the iPhone app market to unfairly tax , bully , and play favorites with third-party app developers .
These monopolistic tendencies have already wreaked havoc on other creative industries , forcing onerous terms on musicians , app developers , and book authors , as well as stealing revenue from newspapers and magazines .
The same fate could befall podcasting , to the detriment of journalists and , by extension , democracy .
But it isn ’ t too late .
As the House report makes clear , @ @ @ @ @ @ @ already done to start investigating the anticompetitive practices of tech monopolies .
Podcasting offers policy makers a chance to atone for their sins—by using public policy to keep podcasting from being devoured before it ’ s too late .
Steve Jobs introduced the wider world to podcasts at Apple ’ s Worldwide Developers Conference in June 2005 .
( The term is a mashup of iPod and broadcast . )
Slate was one of the earliest media companies to experiment with it .
They started by simply reading articles into a microphone .
@ @ @ @ @ @ @ blogs.
” “ It was very much about figuring out a new medium , ” Weisberg , the former Slate executive , told me .
“ There wasn ’ t a clear revenue model , but the people who were making them at Slate loved making them , and the audience loved them , so they kept expanding.
” Thankfully , it was relatively easy for Slate , and other podcasters , to get their product out .
Podcasts relied on “ Really Simple Syndication , ” or RSS feeds , a standardized @ @ @ @ @ @ @ updates to any website .
The format made it easy for listeners to subscribe to podcasts and automatically get new episodes , using any number of apps set up to receive RSS feeds .
For the most part , however , people didn ’ t listen on any number of apps .
They listened on iTunes , and , later , Apple ’ s podcasting app , which was preinstalled on iPhones .
Apple let podcast hosts put their shows on the app for free .
By default , Apple became something like @ @ @ @ @ @ @ charging anyone for product placement , demanding onerous terms of services , or competing against independent authors with its own products .
Weisberg describes the company ’ s hands-off approach as “ a real gift ” to the podcasting world .
It took time , but thanks to its widespread accessibility—and a few blockbuster shows , most notably the 2014 sensation Serial—podcasting took off .
In 2015 , less than half of Americans were familiar with podcasts , and only 17 percent listened monthly , according to a survey from Edison Research .
@ @ @ @ @ @ @ were familiar with podcasts , 37 percent listened monthly , and 25 percent had listened to one in the last week .
Most impressive is the amount of time listeners spent .
Out of those who listened in the last week , the average time spent listening to podcasts is more than six and a half hours per week .
All that ear time has opened up enormous opportunities for ads .
Businesses have capitalized .
Podcast listeners hear their favorite hosts shill for products for a few minutes each episode : a @ @ @ @ @ @ @ print out at home , software for getting an email newsletter started .
Ads delivered by hosts are the primary way many successful podcasts bring in money .
Done well , they don ’ t feel all that intrusive—it ’ s just more stuff from the person you chose to listen to .
“ Hosts are able to leverage the personal connection that they have with the audience , ” says Dan Check , CEO of Slate , which makes the listener more receptive and the ad more effective .
So effective , @ @ @ @ @ @ @ to pay more per 1,000 listeners ( the “ cost per mille , ” or CPM in industry argot ) for an ad on a top podcast than the going rate for a Super Bowl ad in recent years .
While the advertising industry has been rocked by tighter budgets during COVID-19 , brands are projected to increase their spending on podcast ads in this year , according to the Interactive Advertising Bureau ’ s data .
For the most part , that money has been going to podcasters themselves .
Advertisers make @ @ @ @ @ @ @ one of several podcast ad firms that match brands to shows .
Lots of podcasts bring in additional revenue by putting out extended episodes on Patreon , or letting subscribers pay for an ad-free feed .
This has all grown without giant tech companies consolidating the market and taking huge cuts of the revenue .
To understand what could happen to the podcasting industry , it helps to understand what happened to early Hollywood .
In the 1940s , a handful of studios controlled nearly every part of the moviemaking process , from @ @ @ @ @ @ @ shown to the actors , who had to sign exclusive deals with one studio .
Under studio contracts , actors ’ lives were minutely controlled .
Actresses were prevented from getting married or having children , for example , if it conflicted with their image as a sex symbol .
The Supreme Court put this setup to an end .
In a landmark 1948 decision , United States v. Paramount Pictures , the Court ruled that Hollywood movie studios could no longer also own movie theaters , because that put them in the @ @ @ @ @ @ @ those of independent moviemakers .
The decision ultimately meant that actors , screenwriters , directors , and other creative talent could sell their services across a much broader open market and were no longer effectively indentured to one of the era ’ s studios .
It also meant the viewing public had a much broader choice of films showing at their local theater .
But now , Spotify looks like it ’ s trying to become today ’ s version of pre-1948 Paramount .
The first clue came in 2018 , when Spotify @ @ @ @ @ @ @ comedian Amy Schumer to create an original podcast for the platform , and then netted an exclusive deal with the rapper and podcaster Joe Budden .
The exclusive deal was a major change in the terms of the game .
Traditionally , all podcasts had been free to listen to , with some ads , on all podcast platforms .
But for the duration of his contract , Budden , who had established his popular hip-hop culture podcast across several platforms , would be forbidden from airing his show on any other podcasting @ @ @ @ @ @ @ followed .
Spotify made agreements with Vice News , Kim Kardashian West , and Barack and Michelle Obama ’ s production company , Higher Ground .
Perhaps most notably , the company netted Joe Rogan , one of the most popular podcasters in the country .
According to The Wall Street Journal , the company is paying him more than $ 100 million to bring his show to Spotify , and to remove it from all other platforms by the end of 2020 .
The second sign of vertical integration came in February @ @ @ @ @ @ @ companies : Gimlet Media , a premier company behind the popular shows Reply All and Homecoming , and Anchor , a software company with tools for people to make their own podcasts .
“ Gimlet and Anchor will position us to become the leading platform for podcast creators around the world and the leading producer of podcasts , ” Spotify CEO Daniel Ek wrote after the deals closed .
“ These acquisitions will meaningfully accelerate our path to becoming the world ’ s leading audio platform.
” The company then went on to @ @ @ @ @ @ @ focused on making true crime podcasts , and the Ringer , a popular sports website and podcast network , home to Bill Simmons ’ s titular podcast .
This means that Spotify is no longer just a platform for listeners to find podcasts and for podcasters to find an audience .
It ’ s also a podcast production company that competes for listeners against the other podcasts on its own platform—like the old movie studios that owned the theaters that rival movie producers depended on .
This seriously disadvantages independent podcast production companies @ @ @ @ @ @ @ Frequency , which must compete with Spotify-backed productions that can command far greater resources and potentially get insider perks , like additional promotion on the platform or more detailed audience data than is available to other content creators .
Similarly , Anchor ’ s tools could be integrated directly into Spotify ’ s app—a massive advantage other podcast tool companies can ’ t match .
( The platform has already tested an in-app “ create podcast ” button that took users to Anchor ’ s tools . )
As a platform , Spotify @ @ @ @ @ @ @ when cutting deals with advertisers , which could threaten the setup that has so far worked pretty well for podcast hosts .
First , it could , in the future , offer brands a larger audience for their ads than any other podcasting firm alone could deliver , with the option to , say , advertise across their thousands of sports shows .
This might draw advertisers away from other podcasting firms .
Spotify is already netting far bigger customers than individual podcasters typically could .
Omnicom , a large digital marketing agency @ @ @ @ @ @ @ 20 million worth of podcasting ads on Spotify .
Second , and perhaps more importantly , it has changed up podcast delivery technology in a way that will give its ads an edge .
Traditionally , the RSS format made podcasting more resistant to surveillance-based micro-targeted ads—you can ’ t do much spying on someone when they ’ re listening to a downloaded file , and that was the information podcasters had to work with .
But as a mobile app Spotify has a lot more granular information to offer advertisers—like precise location @ @ @ @ @ @ @ , and even whether someone ’ s phone is in their hand or in their pocket .
Streaming also allows the company to dynamically insert ads into podcasts as they are playing , something that most podcast firms , which have to pre-bake ads into podcasts to comport with RSS-based platforms , can not do .
Finally , as a platform , Spotify can also bring to bear user data , like the demographic information people input to set up an account , or the preferences and habits revealed by their music listening @ @ @ @ @ @ @ t have access to .
These enhanced advertising capabilities are a major part of Spotify ’ s sales pitch .
In January 2020 , the company announced its new “ Streaming Ad Insertion ” technology , which will take information about listeners , like their age , gender , location , and type of device , and use it to target ads at them , inserted in real time as they stream their podcast .
In June , the Verge reported that Spotify has made this technology available for 100 Spotify shows .
@ @ @ @ @ @ @ the company has hinted that it will expand the technology ’ s use further .
Spotify ’ s more sophisticated ad targeting abilities , and its power to program ad placement within podcasts , mirror the trend that eroded the business model for print journalism .
Print publications used to be important gateways to specific audiences—Runner ’ s World , for example , was a place Nike knew it could reach potential buyers .
That remained true in the early days of the internet , when advertisers bought banner space directly from publishers @ @ @ @ @ @ @ the past decade allowed brands to aim their ads to a certain audience no matter what website or app they ’ re looking at .
Runner ’ s World , in other words , is no longer the most important gateway to Nike ’ s audience .
Instead , the gateway became the two companies that provide the most detailed data on individuals .
The first is Google , which tracks users across its sprawling empire of map , email , search , video ( YouTube ) , and other properties .
The @ @ @ @ @ @ @ social networking gives it an unrivaled trove of granular and intimate data about its users .
The two companies ’ data advantage , built up largely through acquisitions of competitors , has allowed them to dominate the business of digital advertising and to redirect to themselves the ad money that once funded media outlets .
Google now controls 90 percent of the market for publisher-side ad servers , and takes an estimated 40 percent cut of ad sales that use its services , according to an investigation by the UK ’ s Competition @ @ @ @ @ @ @ combined took in 88 percent of the growth in digital advertising dollars between 2018 and 2019 .
( See Phillip Longman ’ s “ Starving the News ” on page 22 . )
Targeted advertising could do the same to podcasts .
Some in the podcasting business are already worried that it will .
“ Let ’ s look at the web , the best and most recent example of a mass-market , highly diverse , mature , fully analytics-capable medium , ” Marco Arment , creator of the popular podcasting app Overcast @ @ @ @ @ @ @ article after hearing about new podcasting ad tracking software .
“ How did that turn out for all sides involved ?
Is web publishing a healthy business while minimizing consumer/privacy abuse ?
” It was , of course , a rhetorical question .
Spotify may have gotten an early start on taking over the podcast market , but it ’ s facing competition from some fearsome rivals .
In September , The Wall Street Journal reported that Amazon Music was branching into podcast distribution , letting podcasters add their feeds to the platform @ @ @ @ @ @ @ exclusive podcasts of its own , including one with DJ Khaled .
It is also fashioning Audible , its audiobook platform , into a podcast network , with dozens of original , exclusive shows that exist behind a $ 7.95 monthly paywall .
Amazon has advantages Spotify doesn ’ t .
Its Echo speaker leads the smart-speaker market .
Anytime someone asks Alexa to play a podcast , it automatically plays from Amazon Music ( if it ’ s available there ) .
The company could parlay its dominance of smart speakers into @ @ @ @ @ @ @ for synergy—or , perhaps , for self-dealing—are immense .
Someone listening to a podcast via Amazon Music on their Echo device could hear an ad for a product made by Amazon and sold on Amazon .
With a few words to Alexa , they could buy it .
In that interaction , Amazon would have created the podcast , the platform the podcast is played on , the software that summons the podcast , the hardware the podcast is played on , the product advertised , and the market on which the product @ @ @ @ @ @ @ expanding into the podcast market .
When you search for a podcast on Google , several small panels embedded high up in the search results direct you to episodes on Google Podcasts .
That product has less than 2 percent of the market , according to figures from the podcast hosting platform Libsyn .
( Solid market share figures are hard to come by , but Libsyn publishes the share of downloads each platform gets , across all listeners to the thousands of podcasts it hosts . )
And yet Google ’ s @ @ @ @ @ @ @ popular apps , like Spotify and Stitcher .
Google has several other levers it could pull to expand its app ’ s reach .
Google ’ s Android operating system runs on roughly 45 percent of phones in the United States .
Google runs the app store those phones use , Google Play , and has its own line of smart speakers , Google Home .
The company is adept at using these platforms to create what the House antitrust report called “ interlocking monopolies , ” using dominance in sector A to @ @ @ @ @ @ @ sector B .
Ultimately , Google ’ s biggest advantage lies in its data .
As podcast advertising shifts to a real-time micro-targeting model , personal data will be the coin of the realm , and no company in the world knows as much about as many individuals as Google .
Don ’ t forget Apple , which commands more than 60 percent of U.S. podcast listeners , according to Libsyn ’ s figures .
Apple ’ s success has less to do with beating its competition in design and user experience and @ @ @ @ @ @ @ it comes pre-installed on all iPhones , a level of convenience that Spotify and other podcast apps can ’ t compete with .
The open question is whether the company will do much with its power .
Apple has built its brand in part around privacy , so it may not get into the invasive business of advertising .
But between hiring Jake Shapiro , the founder of a premier podcast distribution nonprofit , to lead creative partnerships at Apple Podcasts , and its recent acquisition of Scout FM , a company that @ @ @ @ @ @ @ are signals that Apple may finally be stepping up its efforts .
Like Google , it could turn any number of dials to promote its own podcast platform through superior integration with Siri , or better compatibility with Apple ’ s own iPhones or iOS operating system .
Its competitors rely on Apple ’ s app store for distribution , and Apple could make any number of decisions on that platform that hurt its competition .
Through its own software—from Safari to the Health app—Apple can gather substantial personal information for advertisers .
@ @ @ @ @ @ @ podcast production and advertising , as Spotify has , it would be extremely well positioned to monopolize the podcasting industry .
So what happens next ?
It ’ s not hard to imagine a scenario in which Spotify becomes a dominant podcast creator , advertiser , and distributor .
Once people are used to finding their favorite podcasts in one place , they ’ re unlikely to wander .
If Spotify can provide the largest audience for advertisers , and a system for granular micro-targeting based on the data it collects on those @ @ @ @ @ @ @ and self-reinforcing chunk of the podcasting pie .
Or perhaps Amazon , Google , or Apple will surge from behind , buying or crushing Spotify en route to dominating the industry .
Finally , we could also end up in a world where Spotify , Amazon , Google , and Apple all make aggressive efforts to own the podcasting space , and we end up with a few ginormous podcast creator-advertiser-distributor companies .
That might be better than a single monopolist taking everything over—but probably not much .
Right now the industry is @ @ @ @ @ @ @ podcasts , others do advertising , and still others run platforms—and there ’ s competition within each level .
A four-way Big Tech podcasting oligopoly , however , would be more like the Hollywood studio system of the 1940s .
In that world , “ if you want to produce a podcast , you ’ re going to get to pick between one of four bosses , as opposed to being able to be your own boss and sell into an open market , ” says Matt Stoller , an antitrust expert at @ @ @ @ @ @ @ Stoller was one of the first to write about market consolidation in podcasting , and how it could harm the industry . )
This could drive down revenue for content creators—and the publications that depend on them .
Having four companies control the pipeline of audio content could also make it harder for new and independent creators to find an audience .
It ’ s possible that these fears will prove to be overblown .
Many observers are optimistic that there will always be a route for independent podcasts , or podcasts made @ @ @ @ @ @ @ Jacob Weisberg of Pushkin and Dan Check of Slate , for example , think the fact that listeners don ’ t seem to mind ads read by hosts means that advertisers will continue to pay high prices to content creators , even if it means their products aren ’ t micro-targeted .
Others hope that indie podcasters will be able bring in enough money through subscriptions , or extra paid content on Patreon , to sustain themselves if platform companies take over ad sales .
At least some pod- casters seemed to have @ @ @ @ @ @ @ of digital publishing : Make your money from several different sources .
But as the history of digital advertising shows , the worst can happen .
That means policy makers must be proactive to help keep the podcast market healthy .
Fortunately , there are clear ways for the government to step in .
The FTC , and other regulators , could take the stance that platforms , once they provide an essential infrastructure , must stick to being platforms—they can ’ t branch out into advertising or podcast creation , where they @ @ @ @ @ @ @ could also create rules to ensure that podcast creators don ’ t have to take bad deals in order to gain access to distribution platforms .
In the past , the federal government created such rules for media .
In the 1970s , for example , the Federal Communications Commission issued rules preventing the big three television networks , ABC , CBS , and NBC , from sucking profits away from independent TV producers .
Those rules were eventually relaxed , as antitrust enforcement generally fell apart .
The past couple of years @ @ @ @ @ @ @ of an antitrust renaissance .
As Google , Amazon , Facebook , and Apple have crept into every corner of our lives , advocates and policy makers have rediscovered competition policy as an important bulwark against corporate monopolies .
The Department of Justice , the FTC , dozens of state attorneys general , and European Union regulators each have had investigations into one or more of these companies in 2020 .
On October 6 , the House subcommittee released a report finding that Apple , Amazon , Google , and Facebook used their @ @ @ @ @ @ @ new markets .
The Democrats on the committee , who authored the report , gave Congress concrete recommendations , including a ban on letting certain dominant platforms compete in adjacent lines of business .
But the point of antitrust law is not only to reel in monopolies once they ’ ve crushed their competitors and taken over industries .
It ’ s also to prevent harmful consolidation from happening in the first place .
Policy makers should apply the thinking from their report to the podcasting industry before the situation becomes worse .
@ @ @ @ @ @ @ industry , so the platforms that provide essential infrastructure can ’ t branch out into content creation or advertising within podcasts .
They must do this now .
Podcasts are one of the few promising ways for media outlets to reach new audiences , develop new journalistic formats , and bring in new revenue for valuable reporting that is otherwise underfunded and underappreciated .
But the drumbeat of platform monopolization is getting louder .
Regulators need to listen up .

This story is part of a package exploring how to rescue and revitalize journalism. Read the rest of the pieces here. And, if you enjoy what you’re reading, please consider making a donation—we’re a nonprofit media organization and rely on the support of our readers.
The Daily is perhaps the most successful news product at the country’s most successful newspaper. Each weekday morning, a new episode of the New York Times podcast appears on millions of phones. Host Michael Barbaro, a former Times politics reporter, might talk one day to the White House correspondent Maggie Haberman about the latest Trump palace intrigue, and the next to a reporter in the Moscow bureau about unrest in Belarus. The show is a wildly successful experiment that attracts a much larger audience than the front page of the print newspaper each day and brings in major ad revenue from the likes of BMW, Chanel, and Fidelity Insurance. At a time when the financial viability of the news industry is very much in doubt, The Daily is an encouraging counterexample.
The Times is at the forefront of a broader podcasting boom. Ad revenue for podcasts increased by nearly 50 percent last year, according to an estimate from the Interactive Advertising Bureau, and is projected to top $800 million this year. Regional newspapers like The Atlanta Journal-Constitution, The Texas Tribune, and the Des Moines Register have gotten into podcasting, as have many online magazines and public radio stations. Slate now makes about half of its revenue from its podcasts. Vox Media expanded from a handful of shows in 2017 to more than 200 shows in 2020. Revenue from podcasting is expected to double this year. “We went from it being a hobby, to a strategy, to a big pillar of the company,” says Marty Moe, president of Vox Media Studios.
Podcasting is also a sector where it’s relatively easy for new and independent voices to break in. The former radio reporter Amy Westervelt founded her own network, Critical Frequency, in 2017. Just two years later, it won AdWeek’s annual award for best podcast network of the year. Podcasting also provides space for in-depth reporting, something that has become increasingly difficult to fund in other media. Long investigative reports on technical subjects can be turned into explanatory miniseries, as BuzzFeed did in September with an exposé on big banks’ role in financing terror and drug operations. Challenging topics, like school segregation, can be excavated through compelling storytelling, as with Nice White Parents, a New York Times podcast tracing the history of one Brooklyn school. “The space for high-quality content, and quality journalism, has been contracting for economic reasons for many years now,” says Jacob Weisberg, CEO of Pushkin Industries, a podcast production company he started after years as the editor in chief of the Slate Group. “I see podcasts very much as a place to enlarge that space.”
Ad revenue for podcasts increased by more than 40 percent last year and is projected to top $800 million this year. Regional newspapers have gotten into podcasting, as have many online magazines and public radio stations.
But podcasting’s bright future is under increasing threat. The medium stands in danger of being rolled up by monopolistic tech platforms that could come to own and control the marketplace itself. With that power, they could suck away much of the value created by talented podcasters, just as Amazon stole away the income of even many best-selling authors after it came to own and control most of the digital infrastructure on which e-books are sold.
The most immediate incursion from Big Tech is Spotify, the music-streaming giant, which has already made aggressive moves to install itself as the new podcast gatekeeper. It has acquired several production companies and cut exclusive deals with top podcasters, like Joe Rogan, requiring that they remove their shows from all other platforms. But behind Spotify loom even more powerful actors. Its forays appear to have piqued the attention of Amazon and Google, and possibly even Apple, which has long functioned as a passive, benevolent monopolist over podcast distribution.
There’s nothing inherently wrong with market platforms. The trouble arises when marketplaces come under the control of monopolists who are accustomed to running platforms to their own advantage, at the expense of everyone else who relies on them. The recent House antitrust subcommittee report on tech monopolies illustrates what this can look like. The investigation found evidence that Amazon exploits the data it gathers on third-party sellers who use its online market to undercut those very merchants; that Google put a thumb on the scale to feature its own products, like Chrome and Google Shopping, over competitors even when its engineers knew those offerings wouldn’t naturally rise to the top of a Google search; and that Apple uses its control over the iPhone app market to unfairly tax, bully, and play favorites with third-party app developers.
These monopolistic tendencies have already wreaked havoc on other creative industries, forcing onerous terms on musicians, app developers, and book authors, as well as stealing revenue from newspapers and magazines. The same fate could befall podcasting, to the detriment of journalists and, by extension, democracy. But it isn’t too late. As the House report makes clear, the government waited until the damage was already done to start investigating the anticompetitive practices of tech monopolies. Podcasting offers policy makers a chance to atone for their sins—by using public policy to keep podcasting from being devoured before it’s too late.
Steve Jobs introduced the wider world to podcasts at Apple’s Worldwide Developers Conference in June 2005. (The term is a mashup of iPod and broadcast.) Slate was one of the earliest media companies to experiment with it. They started by simply reading articles into a microphone. They tried something they called “voicemail blogs.” “It was very much about figuring out a new medium,” Weisberg, the former Slate executive, told me. “There wasn’t a clear revenue model, but the people who were making them at Slate loved making them, and the audience loved them, so they kept expanding.”
Thankfully, it was relatively easy for Slate, and other podcasters, to get their product out. Podcasts relied on “Really Simple Syndication,” or RSS feeds, a standardized, open web format for pushing out updates to any website. The format made it easy for listeners to subscribe to podcasts and automatically get new episodes, using any number of apps set up to receive RSS feeds. For the most part, however, people didn’t listen on any number of apps. They listened on iTunes, and, later, Apple’s podcasting app, which was preinstalled on iPhones. Apple let podcast hosts put their shows on the app for free. By default, Apple became something like a benevolent old-fashioned bookstore owner, not charging anyone for product placement, demanding onerous terms of services, or competing against independent authors with its own products. Weisberg describes the company’s hands-off approach as “a real gift” to the podcasting world.
It took time, but thanks to its widespread accessibility—and a few blockbuster shows, most notably the 2014 sensation Serial—podcasting took off. In 2015, less than half of Americans were familiar with podcasts, and only 17 percent listened monthly, according to a survey from Edison Research. By early 2020, three-quarters of Americans were familiar with podcasts, 37 percent listened monthly, and 25 percent had listened to one in the last week. Most impressive is the amount of time listeners spent. Out of those who listened in the last week, the average time spent listening to podcasts is more than six and a half hours per week.
All that ear time has opened up enormous opportunities for ads. Businesses have capitalized. Podcast listeners hear their favorite hosts shill for products for a few minutes each episode: a subscription toothbrush service, stamps you can print out at home, software for getting an email newsletter started. Ads delivered by hosts are the primary way many successful podcasts bring in money. Done well, they don’t feel all that intrusive—it’s just more stuff from the person you chose to listen to. “Hosts are able to leverage the personal connection that they have with the audience,” says Dan Check, CEO of Slate, which makes the listener more receptive and the ad more effective.
So effective, in fact, that companies are willing to pay more per 1,000 listeners (the “cost per mille,” or CPM in industry argot) for an ad on a top podcast than the going rate for a Super Bowl ad in recent years. While the advertising industry has been rocked by tighter budgets during COVID-19, brands are projected to increase their spending on podcast ads in this year, according to the Interactive Advertising Bureau’s data.
For the most part, that money has been going to podcasters themselves. Advertisers make deals with podcasters directly or go through one of several podcast ad firms that match brands to shows. Lots of podcasts bring in additional revenue by putting out extended episodes on Patreon, or letting subscribers pay for an ad-free feed. This has all grown without giant tech companies consolidating the market and taking huge cuts of the revenue.
But that’s starting to change.
To understand what could happen to the podcasting industry, it helps to understand what happened to early Hollywood.
In the 1940s, a handful of studios controlled nearly every part of the moviemaking process, from the theaters in which the films were shown to the actors, who had to sign exclusive deals with one studio. Under studio contracts, actors’ lives were minutely controlled. Actresses were prevented from getting married or having children, for example, if it conflicted with their image as a sex symbol.
The Supreme Court put this setup to an end. In a landmark 1948 decision, United States v. Paramount Pictures, the Court ruled that Hollywood movie studios could no longer also own movie theaters, because that put them in the position of favoring their own films over those of independent moviemakers. The decision ultimately meant that actors, screenwriters, directors, and other creative talent could sell their services across a much broader open market and were no longer effectively indentured to one of the era’s studios. It also meant the viewing public had a much broader choice of films showing at their local theater.
But now, Spotify looks like it’s trying to become today’s version of pre-1948 Paramount.
The first clue came in 2018, when Spotify struck a deal with the actress and comedian Amy Schumer to create an original podcast for the platform, and then netted an exclusive deal with the rapper and podcaster Joe Budden. The exclusive deal was a major change in the terms of the game. Traditionally, all podcasts had been free to listen to, with some ads, on all podcast platforms. But for the duration of his contract, Budden, who had established his popular hip-hop culture podcast across several platforms, would be forbidden from airing his show on any other podcasting platform.
Podcasting provides space for in-depth reporting, something that has become increasingly difficult to fund in other media.
A spate of exclusive deals followed. Spotify made agreements with Vice News, Kim Kardashian West, and Barack and Michelle Obama’s production company, Higher Ground. Perhaps most notably, the company netted Joe Rogan, one of the most popular podcasters in the country. According to The Wall Street Journal, the company is paying him more than $100 million to bring his show to Spotify, and to remove it from all other platforms by the end of 2020.
The second sign of vertical integration came in February 2019, when Spotify acquired two podcast companies: Gimlet Media, a premier company behind the popular shows Reply All and Homecoming, and Anchor, a software company with tools for people to make their own podcasts. “Gimlet and Anchor will position us to become the leading platform for podcast creators around the world and the leading producer of podcasts,” Spotify CEO Daniel Ek wrote after the deals closed. “These acquisitions will meaningfully accelerate our path to becoming the world’s leading audio platform.” The company then went on to acquire Parcast, a podcast production company focused on making true crime podcasts, and the Ringer, a popular sports website and podcast network, home to Bill Simmons’s titular podcast.
This means that Spotify is no longer just a platform for listeners to find podcasts and for podcasters to find an audience. It’s also a podcast production company that competes for listeners against the other podcasts on its own platform—like the old movie studios that owned the theaters that rival movie producers depended on. This seriously disadvantages independent podcast production companies, like Amy Westervelt’s Critical Frequency, which must compete with Spotify-backed productions that can command far greater resources and potentially get insider perks, like additional promotion on the platform or more detailed audience data than is available to other content creators. Similarly, Anchor’s tools could be integrated directly into Spotify’s app—a massive advantage other podcast tool companies can’t match. (The platform has already tested an in-app “create podcast” button that took users to Anchor’s tools.)
As a platform, Spotify also has at least two major advantages when cutting deals with advertisers, which could threaten the setup that has so far worked pretty well for podcast hosts. First, it could, in the future, offer brands a larger audience for their ads than any other podcasting firm alone could deliver, with the option to, say, advertise across their thousands of sports shows. This might draw advertisers away from other podcasting firms. Spotify is already netting far bigger customers than individual podcasters typically could. Omnicom, a large digital marketing agency, has signed up to buy $20 million worth of podcasting ads on Spotify.
Spotify’s forays appear to have piqued the attention of Amazon and Google, and possibly even Apple, which has long functioned as a passive, benevolent monopolist over podcast distribution.
Second, and perhaps more importantly, it has changed up podcast delivery technology in a way that will give its ads an edge. Traditionally, the RSS format made podcasting more resistant to surveillance-based micro-targeted ads—you can’t do much spying on someone when they’re listening to a downloaded file, and that was the information podcasters had to work with. But as a mobile app Spotify has a lot more granular information to offer advertisers—like precise location, the time when users are listening, and even whether someone’s phone is in their hand or in their pocket. Streaming also allows the company to dynamically insert ads into podcasts as they are playing, something that most podcast firms, which have to pre-bake ads into podcasts to comport with RSS-based platforms, cannot do. Finally, as a platform, Spotify can also bring to bear user data, like the demographic information people input to set up an account, or the preferences and habits revealed by their music listening, that podcast firms generally don’t have access to.
These enhanced advertising capabilities are a major part of Spotify’s sales pitch. In January 2020, the company announced its new “Streaming Ad Insertion” technology, which will take information about listeners, like their age, gender, location, and type of device, and use it to target ads at them, inserted in real time as they stream their podcast. In June, the Verge reported that Spotify has made this technology available for 100 Spotify shows. It’s still early days; the company has hinted that it will expand the technology’s use further.
Spotify’s more sophisticated ad targeting abilities, and its power to program ad placement within podcasts, mirror the trend that eroded the business model for print journalism. Print publications used to be important gateways to specific audiences—Runner’s World, for example, was a place Nike knew it could reach potential buyers. That remained true in the early days of the internet, when advertisers bought banner space directly from publishers. But the rise of micro-targeting over the past decade allowed brands to aim their ads to a certain audience no matter what website or app they’re looking at. Runner’s World, in other words, is no longer the most important gateway to Nike’s audience.
Instead, the gateway became the two companies that provide the most detailed data on individuals. The first is Google, which tracks users across its sprawling empire of map, email, search, video (YouTube), and other properties. The second is Facebook, whose monopoly over social networking gives it an unrivaled trove of granular and intimate data about its users. The two companies’ data advantage, built up largely through acquisitions of competitors, has allowed them to dominate the business of digital advertising and to redirect to themselves the ad money that once funded media outlets. Google now controls 90 percent of the market for publisher-side ad servers, and takes an estimated 40 percent cut of ad sales that use its services, according to an investigation by the UK’s Competition and Market Authority. The two companies combined took in 88 percent of the growth in digital advertising dollars between 2018 and 2019. (See Phillip Longman’s “Starving the News“)
Targeted advertising could do the same to podcasts. Some in the podcasting business are already worried that it will. “Let’s look at the web, the best and most recent example of a mass-market, highly diverse, mature, fully analytics-capable medium,” Marco Arment, creator of the popular podcasting app Overcast, remarked in a Columbia Journalism Review article after hearing about new podcasting ad tracking software. “How did that turn out for all sides involved? Is web publishing a healthy business while minimizing consumer/privacy abuse?” It was, of course, a rhetorical question.
Spotify may have gotten an early start on taking over the podcast market, but it’s facing competition from some fearsome rivals.
In September, The Wall Street Journal reported that Amazon Music was branching into podcast distribution, letting podcasters add their feeds to the platform, and has plans to put out exclusive podcasts of its own, including one with DJ Khaled. It is also fashioning Audible, its audiobook platform, into a podcast network, with dozens of original, exclusive shows that exist behind a $7.95 monthly paywall.
Amazon has advantages Spotify doesn’t. Its Echo speaker leads the smart-speaker market. Anytime someone asks Alexa to play a podcast, it automatically plays from Amazon Music (if it’s available there). The company could parlay its dominance of smart speakers into gatekeeping power in podcasting. The opportunities for synergy—or, perhaps, for self-dealing—are immense. Someone listening to a podcast via Amazon Music on their Echo device could hear an ad for a product made by Amazon and sold on Amazon. With a few words to Alexa, they could buy it. In that interaction, Amazon would have created the podcast, the platform the podcast is played on, the software that summons the podcast, the hardware the podcast is played on, the product advertised, and the market on which the product is sold.
Google has also begun expanding into the podcast market. When you search for a podcast on Google, several small panels embedded high up in the search results direct you to episodes on Google Podcasts. That product has less than 2 percent of the market, according to figures from the podcast hosting platform Libsyn. (Solid market share figures are hard to come by, but Libsyn publishes the share of downloads each platform gets, across all listeners to the thousands of podcasts it hosts.) And yet Google’s search engine often features it above more popular apps, like Spotify and Stitcher. Google has several other levers it could pull to expand its app’s reach. Google’s Android operating system runs on roughly 45 percent of phones in the United States. Google runs the app store those phones use, Google Play, and has its own line of smart speakers, Google Home. The company is adept at using these platforms to create what the House antitrust report called “interlocking monopolies,” using dominance in sector A to give its own products an advantage in sector B. Ultimately, Google’s biggest advantage lies in its data. As podcast advertising shifts to a real-time micro-targeting model, personal data will be the coin of the realm, and no company in the world knows as much about as many individuals as Google.
Monopolistic tech companies have already strip-mined revenues from other creative professionals, including musicians, app developers, book authors, and print journalists.
Don’t forget Apple, which commands more than 60 percent of U.S. podcast listeners, according to Libsyn’s figures. Apple’s success has less to do with beating its competition in design and user experience and more to do with the fact that it comes pre-installed on all iPhones, a level of convenience that Spotify and other podcast apps can’t compete with. The open question is whether the company will do much with its power. Apple has built its brand in part around privacy, so it may not get into the invasive business of advertising. But between hiring Jake Shapiro, the founder of a premier podcast distribution nonprofit, to lead creative partnerships at Apple Podcasts, and its recent acquisition of Scout FM, a company that algorithmically curates custom podcast playlists, there are signals that Apple may finally be stepping up its efforts. Like Google, it could turn any number of dials to promote its own podcast platform through superior integration with Siri, or better compatibility with Apple’s own iPhones or iOS operating system. Its competitors rely on Apple’s app store for distribution, and Apple could make any number of decisions on that platform that hurt its competition. Through its own software—from Safari to the Health app—Apple can gather substantial personal information for advertisers. If Apple vertically integrates and gets into podcast production and advertising, as Spotify has, it would be extremely well positioned to monopolize the podcasting industry.
So what happens next?
It’s not hard to imagine a scenario in which Spotify becomes a dominant podcast creator, advertiser, and distributor. Once people are used to finding their favorite podcasts in one place, they’re unlikely to wander. If Spotify can provide the largest audience for advertisers, and a system for granular micro-targeting based on the data it collects on those listeners, it could win a critical and self-reinforcing chunk of the podcasting pie.
Or perhaps Amazon, Google, or Apple will surge from behind, buying or crushing Spotify en route to dominating the industry.
Finally, we could also end up in a world where Spotify, Amazon, Google, and Apple all make aggressive efforts to own the podcasting space, and we end up with a few ginormous podcast creator-advertiser-distributor companies. That might be better than a single monopolist taking everything over—but probably not much. Right now the industry is mostly vertically separated. Some companies make podcasts, others do advertising, and still others run platforms—and there’s competition within each level. A four-way Big Tech podcasting oligopoly, however, would be more like the Hollywood studio system of the 1940s. In that world, “if you want to produce a podcast, you’re going to get to pick between one of four bosses, as opposed to being able to be your own boss and sell into an open market,” says Matt Stoller, an antitrust expert at the American Economic Liberties Project. (Stoller was one of the first to write about market consolidation in podcasting, and how it could harm the industry.) This could drive down revenue for content creators—and the publications that depend on them. Having four companies control the pipeline of audio content could also make it harder for new and independent creators to find an audience.
The point of antitrust law is not only to reel in monopolies once they’ve crushed their competitors and taken over industries. It’s also to prevent harmful consolidation from happening in the first place.
It’s possible that these fears will prove to be overblown. Many observers are optimistic that there will always be a route for independent podcasts, or podcasts made by small companies, to succeed. Jacob Weisberg of Pushkin and Dan Check of Slate, for example, think the fact that listeners don’t seem to mind ads read by hosts means that advertisers will continue to pay high prices to content creators, even if it means their products aren’t micro-targeted. Others hope that indie podcasters will be able bring in enough money through subscriptions, or extra paid content on Patreon, to sustain themselves if platform companies take over ad sales. At least some podcasters seemed to have learned the right lesson from the decline of digital publishing: Make your money from several different sources.
But as the history of digital advertising shows, the worst can happen. That means policy makers must be proactive to help keep the podcast market healthy.
Fortunately, there are clear ways for the government to step in. The FTC, and other regulators, could take the stance that platforms, once they provide an essential infrastructure, must stick to being platforms—they can’t branch out into advertising or podcast creation, where they might have an unfair advantage. Regulators could also create rules to ensure that podcast creators don’t have to take bad deals in order to gain access to distribution platforms. In the past, the federal government created such rules for media. In the 1970s, for example, the Federal Communications Commission issued rules preventing the big three television networks, ABC, CBS, and NBC, from sucking profits away from independent TV producers.
Those rules were eventually relaxed, as antitrust enforcement generally fell apart. The past couple of years, however, have seen the beginnings of an antitrust renaissance. As Google, Amazon, Facebook, and Apple have crept into every corner of our lives, advocates and policy makers have rediscovered competition policy as an important bulwark against corporate monopolies. The Department of Justice, the FTC, dozens of state attorneys general, and European Union regulators each have had investigations into one or more of these companies in 2020. On October 6, the House subcommittee released a report finding that Apple, Amazon, Google, and Facebook used their platforms to gain an upper hand in new markets. The Democrats on the committee, who authored the report, gave Congress concrete recommendations, including a ban on letting certain dominant platforms compete in adjacent lines of business.
But the point of antitrust law is not only to reel in monopolies once they’ve crushed their competitors and taken over industries. It’s also to prevent harmful consolidation from happening in the first place. Policy makers should apply the thinking from their report to the podcasting industry before the situation becomes worse. They should enforce structural separation within the industry, so the platforms that provide essential infrastructure can’t branch out into content creation or advertising within podcasts.
They must do this now. Podcasts are one of the few promising ways for media outlets to reach new audiences, develop new journalistic formats, and bring in new revenue for valuable reporting that is otherwise underfunded and underappreciated. But the drumbeat of platform monopolization is getting louder. Regulators need to listen up.


washingtonmonthly--2020-10-26--Own a Newspaper for $1 per Month

Own a Newspaper for $1 per Month

Dominic Moore-Dunson never expected to own a journalism outlet .
Moore-Dunson , a dancer and choreographer living in Akron , Ohio , doesn ’ t exactly have the background of a newspaper baron .
So it was a surprise when Chris Horne , publisher of the local arts and culture magazine The Devil Strip , texted to ask if he had time to meet up and talk about a new business model .
While Moore-Dunson has lived in Akron since he was five years old , he only met Horne recently—they took part in the same national arts fellowship program @ @ @ @ @ @ @ knew I was someone with a passion for the intersection of arts and culture , community , and entrepreneurship , ” Moore-Dunson told me recently .
“ I was just a friend who was interested in what he was doing .
So I said sure , I ’ ll entertain a conversation.
” Horne , along with the Devil Strip editor in chief , Rosalie Murphy , and its director of membership , Jessica Goldbourn , sat down with Moore-Dunson at the Mustard Seed , a local café attached to an organic grocery @ @ @ @ @ @ @ joining the publication ’ s first board of directors and becoming one of its first co-owners—a distinction he would share , they explained , with anyone in Akron willing to pay at least $ 1 a month .
“ Hearing them describe what they were after—I felt in that moment like they were trying to make sure people are at the center of what The Devil Strip is , ” he said .
“ And the reality is that if people are at the center , they will make sure whatever you ’ @ @ @ @ @ @ @ because they love it and they ’ re a part of it.
” The Devil Strip—named after Akron ’ s unique term for the stretch of grass between the sidewalk and the road—is now owned by Moore-Dunson and more than 600 others living in and around Akron , including the employees who work for it .
The publication ’ s community-minded model means that readers can find coverage of local elections and COVID-19 resources alongside the local music reviews and restaurant openings that are most arts and culture publications ’ bread and butter @ @ @ @ @ @ @ was partly inspired by a trend of co-op microbreweries that started cropping up around the U.S. in the 2000s , allowing drinkers to own shares and even help decide which beers make it to market .
“ I like the parallels between craft beer and the thoughtful craft news that we ’ re trying to do , ” Horne said .
“ It ’ s directly responsive to the wants and needs of our community.
” The Devil Strip was founded in 2014 but became a multi-stakeholder co-op a year ago after struggling @ @ @ @ @ @ @ alone .
It works like this : Anyone with an Ohio address can buy a share of the company , entitling them to vote for the magazine ’ s board of directors , which is made up of co-owners like them .
Employees and contributors can also become owners , and one seat on the board is reserved for someone who works at the magazine .
There ’ s no paywall , but community co-owners will eventually see perks like live events , meet-ups , and access to staff that can shape how @ @ @ @ @ @ @ intrinsic value beyond voting for a board or pitching stories to editors .
“ The thing about co-ownership as a Black person is that saying the words ‘ Black person ’ and ‘ ownership ’ in the same sentence is a big deal , always , ” Moore-Dunson said .
“ The history of our country is such that ownership is not something we gain often .
It ’ s something that ’ s taken away from us.
” He estimated that nearly half of the current board of The Devil Strip is @ @ @ @ @ @ @ difference in the way different parts of Akron are covered .
The city is 30 percent Black , and the magazine has made a point to find stories and contributors in neighborhoods that don ’ t often get coverage .
Horne thinks The Devil Strip can grow to having 1,000 co-owners by the end of the year .
He said it would take between 2,500 and 3,000 co-owners to make the magazine—which employs 12 staff members , nine of them full-time—fully sustainable without a need for any other revenue .
With advertising and @ @ @ @ @ @ @ as financially secure as a community news organization could hope to be during a pandemic .
The magazine ’ s business model may be the first of its kind in the United States , but co-ops aren ’ t a new concept .
Farmer-owned dairy co-ops have been around for more than a century , and electrical co-ops have powered much of the country stretching back to the New Deal .
Food co-ops have outgrown their hippie image , and credit unions are a widespread and viable alternative to big banks .
While @ @ @ @ @ @ @ a civic necessity , it ’ s just as susceptible to corporate ransacking as any of those other industries .
As classifieds went digital and tech monopolies like Google and Facebook gobbled up advertising and readership , America ’ s local newspapers closed and consolidated .
A University of North Carolina study found that the U.S. has lost more than 2,100 newspapers in the past 15 years , leaving 200 counties without local coverage .
Of the daily papers still around , more than half could be owned by financial institutions like hedge @ @ @ @ @ @ @ year .
These firms tend to follow a playbook of drastically laying off staff and scaling back coverage in order to reap short-term profits , leaving behind a paper that ’ s a ghost of its former self .
Co-ops can offer a space free of corporate ownership while providing sustainable services that philanthropies can not .
That ’ s why journalists at The Devil Strip are well aware that they are part of a tiny but growing national experiment in cooperative ownership of local journalism .
What if the country ’ s @ @ @ @ @ @ @ newspapers—sustainable , salary-paying newspapers—owned not by hedge funds or distant philanthropists but by readers and reporters themselves ?
What if those newspapers could provide even better coverage than the ones they replaced ?
With its redwood forests , coastal cliffs , vineyards , and storied history of marijuana farming , Mendocino County , California , doesn ’ t share much with Akron .
It ’ s 63 times larger , but with less than half the population .
But the two will soon have at least one thing in common—cooperative local news coverage @ @ @ @ @ @ @ newspapers that have roots dating back to the 19th century .
By the 21st century , however , most of those local papers were shrinking thanks to decisions made by their new owner , Alden Global Capital .
Kate Maxwell and Adrian Fernandez Baumann were reporters at one of those papers , and the consolidations and cuts inspired them to start a new publication with a different business model .
“ We met at a paper that was being decimated by a hedge fund , ” Maxwell , now the publisher of the @ @ @ @ @ @ @ told me .
She and Baumann , now the editor in chief , founded the Voice in 2016 and soon decided it should become a multi-stakeholder co-op .
While it was easier and quicker to launch as a company funded by memberships , they ’ re deep in the ( multiyear ) process of turning those members into co-owners and developing the rules for employee ownership as well .
The new model has shaped their coverage of Mendocino ’ s biggest story this year—the largest fire in California history , literally burning in @ @ @ @ @ @ @ are people that live close enough that their eyewitness vantage point and photographs have really strengthened our reporting and informed how we approach fact-checking things on the ground and being open to what people ’ s questions are , ” Maxwell said .
“ There ’ s a discrepancy between calling the public information officer who may be someplace an hour away and hearing what people are seeing close by.
” Baumann said their desire to report for people rather than about people is why the transition to a co-op makes sense .
@ @ @ @ @ @ @ Voice was covering the previous largest fire in California history .
That one was started when a rancher drove a metal stake into the ground to plug a wasp nest .
The stake sparked when he hammered it , igniting dry grass nearby and leading to a massive blaze that ended up burning more than 400,000 acres .
“ From the get-go I knew that I could have found that guy and done an interview with him , ” Baumann said .
“ But we never pursued it .
Some people in the @ @ @ @ @ @ @ people were already making death threats against him.
” A year later , the state ’ s fire agency released the results of their investigation into the fire ’ s cause .
It kept the man responsible anonymous—he was found to have done nothing wrong—but then The New York Times looked into the matter , naming and interviewing him for a front-page story .
“ It ’ s extracting anecdotes and stories from communities without asking , ‘ Why are we doing this ?
’ ” Baumann said .
“ It might have @ @ @ @ @ @ @ have gotten us a lot of clicks.
” Baumann and Maxwell see community ownership as a way to entrench those values in the way the Voice is run .
Their past newspaper jobs in the county serve as warnings about what can go wrong when the owners are distant from their readers and employees .
Before marijuana was legalized in California , it was the primary economy in Mendocino County .
Cannabis was cultivated in huge amounts , and thousands of people from around the world would flock to the region every year @ @ @ @ @ @ @ the underground nature of marijuana farming , the traditional papers would only cover it as crime rather than as a massive local industry .
“ What you read in the newspaper was a willful distortion of what was actually happening in the community , ” Baumann said .
“ There were all these obfuscations that would take place .
It was this open secret that nobody in the press could talk about.
” Like at The Devil Strip , employee ownership is also an important part of the Voice ’ s co-op model @ @ @ @ @ @ @ on the editor in chief , and community co-owners will be able to fill a public editor role .
“ It ’ s something that we think really embodies our mission as a local news organization , ” said Maxwell , “ but also is an important economic model that we think is valuable for local news and could be valuable in other parts of the country.
” The Colorado Sun is another employee-owned online publication considering transitioning into a multi-stakeholder co-op .
Like Maxwell and Baumann , Sun editor Larry Ryckman and @ @ @ @ @ @ @ at a newspaper owned by Alden Global Capital—in this case The Denver Post , which had cut its staff from more than 300 journalists a decade ago to about 100 by 2018 .
Told to lay off another third of the newsroom , Ryckman and nine of his colleagues quit instead to found an outlet they could own themselves .
“ We decided to go that way because no one is trying to make a gazillion dollars , ” Ryckman said .
“ We wanted to be equal partners in this.
” Like @ @ @ @ @ @ @ ’ t have a paywall but allows readers to buy memberships that give them access to premium newsletters and a preview of an opinion column for the next day .
And while no one ’ s making a gazillion dollars , no one earns less than they did while they were still at the Post .
They got off the ground with a grant from the former media start-up Civil , but now have nearly 12,000 paying members .
Ryckman expects the Sun to be sustainable by the end of the year .
@ @ @ @ @ @ @ staff , two in the newsroom and one on the business side .
New hires don ’ t automatically get ownership stakes , but Ryckman envisions reporters being able to work their way there , like making partner at a law firm .
“ We would like all of our journalists to be owners of the Colorado Sun at some point , ” he said .
“ We very much want to remain masters of our own destiny.
” The Sun helped inspire perhaps the most high-profile employee-owned company in media right now—Defector @ @ @ @ @ @ @ in protest from the sports site Deadspin after rebelling against its private equity owners over , among other things , a directive to stop covering political and cultural topics that were only tangentially related to sports .
“ It ’ s a little bit scary to own it ourselves , because if something goes wrong there ’ s no one to blame but ourselves , ” Defector columnist Drew Magary told me .
“ But we were hoping to continue to do our jobs so that some faceless , nameless dipshit upstairs can @ @ @ @ @ @ @ ’ re doing.
” Before launching Defector , the team looked into crowdfunding options like Patreon and Substack , but they were hesitant to commit to a tech platform that was outside their control .
Any writers who lived through the boom and bust of Facebook traffic should be wary of putting all their eggs into one tech company ’ s basket , even if they co-own those eggs .
They settled on a membership model like the Sun ’ s , with subscribers able to comment , receive newsletters , and eventually @ @ @ @ @ @ @ they pay .
( Full disclosure : I subscribed to Defector months before writing this article . )
“ We wanted to look and feel very much our own , ” Magary said .
“ We wanted a website you want to go to , one that feels like home.
” Ryckman echoed that benefit : When you rely on readers for direct revenue , you have to serve them relevant ads and a high-quality user experience .
Autoplaying videos , ads that track your every move , and cluttered websites that make @ @ @ @ @ @ @ don ’ t have to come hand in hand with opening your ( virtual ) paper .
As the Colorado Sun grows , its 10 owners are facing a decision about where they want their business model to go from here .
They ’ ve discussed becoming a multi-stakeholder co-op like The Devil Strip and the Mendocino Voice , keeping their own stakes and turning all their members into co-owners as well .
Another option is going nonprofit , following in the footsteps of statewide digital publications like the Texas Tribune and MinnPost @ @ @ @ @ @ @ and NPR .
The nonprofit model has been called the future of civic journalism , but it may not work for outlets like the Sun .
The combination of grants , donations , and reader memberships has been a successful one for a range of publications , including local newspapers like the Tampa Bay Times and The Salt Lake Tribune .
Community co-ops and advocates , however , see large swaths of the country that nonprofits can ’ t cover .
“ I think the old way of looking at things was that @ @ @ @ @ @ @ fund owned , or you ’ re completely pure and nonprofit , and there ’ s nothing in between , ” Ryckman said .
“ I ’ m a huge admirer of what [ the founders ] Evan Smith and John Thornton did at the Texas Tribune .
But Colorado is not Texas , and we do not have access to the same kind of philanthropy .
Colorado ’ s philanthropic community isn ’ t able to support a Texas Tribune.
” That competition for grants and donations is even tougher in smaller @ @ @ @ @ @ @ “ Communities like ours aren ’ t necessarily full of foundations or wealthy philanthropists , ” Maxwell said .
“ I think communities that don ’ t have a lot of existing economic resources can use this co-op model.
” A local news co-op can work financially , but getting it started is the hardest part .
It ’ s no coincidence that the precious few U.S. examples operated for a few years before transitioning .
Tom Stites believes that ’ s where the Banyan Project comes in .
Stites held editing positions @ @ @ @ @ @ @ Tribune , and The Kansas City Times before setting out to combat the local newspaper crash .
He and his partners were looking for a new business model that was digital first , self-sustaining , and easy to replicate .
After research and deliberation , he said , supporting co-ops was the “ obvious , obvious thing to do.
” “ Readers should experience journalism relevant to their lives , respectful of them as people , and worthy of their trust , ” Stites told me .
“ This was the only business @ @ @ @ @ @ @ and truly fit.
” The Banyan Project is a nonprofit that will provide a web platform , mentorship , and community for local news co-ops that agree to meet a set of basic journalistic standards .
Stites hopes co-ops that join can help and learn from one another as part of a Banyan network .
Stites wants to launch 20 news co-ops over three years , but the project is still fund-raising to get off the ground .
He ’ s been in touch with the Mendocino Voice staffers , though , who @ @ @ @ @ @ @ Strip as they work through their co-op transition .
The co-op community is a small one , but everyone involved knows the importance of working together to find a model that can work anywhere .
That ’ s partly because good news co-ops can have more than just a local impact .
As we have explained in this magazine , a local news vacuum can end up being filled by Facebook posts , email forwards , and other sources of tall tales seemingly designed to frighten those without a reliable source of information @ @ @ @ @ @ @ Did the Fall of Local News Bring Us Authoritarianism in Washington ?
” in our July/August 2018 issue . )
Nearby wildfires morph into a government conspiracy to burn down homes ; peaceful protests become a front for busloads of violent anarchists looking to raze Main Street .
“ The lack of newspapers not only means that your local civic health is shot , ” Stites said .
“ It also takes away the barrier to the really toxic stuff.
” For all the lack of trust in media , it ’ s @ @ @ @ @ @ @ than the one you and your neighbors own .
That ’ s the final part of the pitch The Devil Strip makes to potential co-owners : Not only are you buying a say in how your local paper is run , you ’ re also buying a stake in the civic health of your city and your country .
“ You have to be reliant on the people , ” Moore-Dunson said .
“ If you ’ re a co-owner of The Devil Strip , we need you to be a part of @ @ @ @ @ @

This story is part of a package exploring how to rescue and revitalize journalism. Read the rest of the pieces here. And, if you enjoy what you’re reading, please consider making a donation—we’re a nonprofit media organization and rely on the support of our readers.
Dominic Moore-Dunson never expected to own a journalism outlet.
Moore-Dunson, a dancer and choreographer living in Akron, Ohio, doesn’t exactly have the background of a newspaper baron. So it was a surprise when Chris Horne, publisher of the local arts and culture magazine The Devil Strip, texted to ask if he had time to meet up and talk about a new business model.
While Moore-Dunson has lived in Akron since he was five years old, he only met Horne recently—they took part in the same national arts fellowship program, one year apart. “He knew I was someone with a passion for the intersection of arts and culture, community, and entrepreneurship,” Moore-Dunson told me recently. “I was just a friend who was interested in what he was doing. So I said sure, I’ll entertain a conversation.”
Horne, along with the Devil Strip editor in chief, Rosalie Murphy, and its director of membership, Jessica Goldbourn, sat down with Moore-Dunson at the Mustard Seed, a local café attached to an organic grocery store. There they pitched him on joining the publication’s first board of directors and becoming one of its first co-owners—a distinction he would share, they explained, with anyone in Akron willing to pay at least $1 a month.
“Hearing them describe what they were after—I felt in that moment like they were trying to make sure people are at the center of what The Devil Strip is,” he said. “And the reality is that if people are at the center, they will make sure whatever you’re doing is sustainable and stays alive because they love it and they’re a part of it.”
The Devil Strip—named after Akron’s unique term for the stretch of grass between the sidewalk and the road—is now owned by Moore-Dunson and more than 600 others living in and around Akron, including the employees who work for it. The publication’s community-minded model means that readers can find coverage of local elections and COVID-19 resources alongside the local music reviews and restaurant openings that are most arts and culture publications’ bread and butter.
It’s a model that was partly inspired by a trend of co-op microbreweries that started cropping up around the U.S. in the 2000s, allowing drinkers to own shares and even help decide which beers make it to market. “I like the parallels between craft beer and the thoughtful craft news that we’re trying to do,” Horne said. “It’s directly responsive to the wants and needs of our community.”
The Devil Strip was founded in 2014 but became a multi-stakeholder co-op a year ago after struggling to make ends meet on advertising revenue alone. It works like this: Anyone with an Ohio address can buy a share of the company, entitling them to vote for the magazine’s board of directors, which is made up of co-owners like them. Employees and contributors can also become owners, and one seat on the board is reserved for someone who works at the magazine. There’s no paywall, but community co-owners will eventually see perks like live events, meet-ups, and access to staff that can shape how Akron is covered.
Anyone with an Ohio address can buy a share of The Devil Strip, entitling them to vote for the magazine’s board of directors, which is made up of co-owners like them.
Community ownership has intrinsic value beyond voting for a board or pitching stories to editors. “The thing about co-ownership as a Black person is that saying the words ‘Black person’ and ‘ownership’ in the same sentence is a big deal, always,” Moore-Dunson said. “The history of our country is such that ownership is not something we gain often. It’s something that’s taken away from us.”
He estimated that nearly half of the current board of The Devil Strip is Black, which has already made a difference in the way different parts of Akron are covered. The city is 30 percent Black, and the magazine has made a point to find stories and contributors in neighborhoods that don’t often get coverage.
Horne thinks The Devil Strip can grow to having 1,000 co-owners by the end of the year. He said it would take between 2,500 and 3,000 co-owners to make the magazine—which employs 12 staff members, nine of them full-time—fully sustainable without a need for any other revenue. With advertising and journalism grants included, they’re as financially secure as a community news organization could hope to be during a pandemic.
The magazine’s business model may be the first of its kind in the United States, but co-ops aren’t a new concept. Farmer-owned dairy co-ops have been around for more than a century, and electrical co-ops have powered much of the country stretching back to the New Deal. Food co-ops have outgrown their hippie image, and credit unions are a widespread and viable alternative to big banks.
While people tend to think of journalism as a civic necessity, it’s just as susceptible to corporate ransacking as any of those other industries. As classifieds went digital and tech monopolies like Google and Facebook gobbled up advertising and readership, America’s local newspapers closed and consolidated. A University of North Carolina study found that the U.S. has lost more than 2,100 newspapers in the past 15 years, leaving 200 counties without local coverage. Of the daily papers still around, more than half could be owned by financial institutions like hedge funds and private equity firms by next year. These firms tend to follow a playbook of drastically laying off staff and scaling back coverage in order to reap short-term profits, leaving behind a paper that’s a ghost of its former self.
Co-ops can offer a space free of corporate ownership while providing sustainable services that philanthropies cannot. That’s why journalists at The Devil Strip are well aware that they are part of a tiny but growing national experiment in cooperative ownership of local journalism. What if the country’s vast local news deserts were filled by newspapers—sustainable, salary-paying newspapers—owned not by hedge funds or distant philanthropists but by readers and reporters themselves? What if those newspapers could provide even better coverage than the ones they replaced?
With its redwood forests, coastal cliffs, vineyards, and storied history of marijuana farming, Mendocino County, California, doesn’t share much with Akron. It’s 63 times larger, but with less than half the population. But the two will soon have at least one thing in common—cooperative local news coverage.
Mendocino County is covered by multiple newspapers that have roots dating back to the 19th century. By the 21st century, however, most of those local papers were shrinking thanks to decisions made by their new owner, Alden Global Capital. Kate Maxwell and Adrian Fernandez Baumann were reporters at one of those papers, and the consolidations and cuts inspired them to start a new publication with a different business model.
“We met at a paper that was being decimated by a hedge fund,” Maxwell, now the publisher of the Mendocino Voice, an online newspaper, told me. She and Baumann, now the editor in chief, founded the Voice in 2016 and soon decided it should become a multi-stakeholder co-op. While it was easier and quicker to launch as a company funded by memberships, they’re deep in the (multiyear) process of turning those members into co-owners and developing the rules for employee ownership as well.
The new model has shaped their coverage of Mendocino’s biggest story this year—the largest fire in California history, literally burning in their readers’ backyards. “There are people that live close enough that their eyewitness vantage point and photographs have really strengthened our reporting and informed how we approach fact-checking things on the ground and being open to what people’s questions are,” Maxwell said. “There’s a discrepancy between calling the public information officer who may be someplace an hour away and hearing what people are seeing close by.”
Baumann said their desire to report for people rather than about people is why the transition to a co-op makes sense. He pointed to 2018, when the Voice was covering the previous largest fire in California history. That one was started when a rancher drove a metal stake into the ground to plug a wasp nest. The stake sparked when he hammered it, igniting dry grass nearby and leading to a massive blaze that ended up burning more than 400,000 acres.
“From the get-go I knew that I could have found that guy and done an interview with him,” Baumann said. “But we never pursued it. Some people in the area knew who it was, and people were already making death threats against him.”
A year later, the state’s fire agency released the results of their investigation into the fire’s cause. It kept the man responsible anonymous—he was found to have done nothing wrong—but then The New York Times looked into the matter, naming and interviewing him for a front-page story.
“It’s extracting anecdotes and stories from communities without asking, ‘Why are we doing this?’ ” Baumann said. “It might have damaged the community. But it would have gotten us a lot of clicks.”
Baumann and Maxwell see community ownership as a way to entrench those values in the way the Voice is run. Their past newspaper jobs in the county serve as warnings about what can go wrong when the owners are distant from their readers and employees.
Before marijuana was legalized in California, it was the primary economy in Mendocino County. Cannabis was cultivated in huge amounts, and thousands of people from around the world would flock to the region every year for pot tourism. But due to the underground nature of marijuana farming, the traditional papers would only cover it as crime rather than as a massive local industry. “What you read in the newspaper was a willful distortion of what was actually happening in the community,” Baumann said. “There were all these obfuscations that would take place. It was this open secret that nobody in the press could talk about.”
Like at The Devil Strip, employee ownership is also an important part of the Voice’s co-op model. Employees will be able to vote on the editor in chief, and community co-owners will be able to fill a public editor role. “It’s something that we think really embodies our mission as a local news organization,” said Maxwell, “but also is an important economic model that we think is valuable for local news and could be valuable in other parts of the country.”
The Colorado Sun is another employee-owned online publication considering transitioning into a multi-stakeholder co-op. Like Maxwell and Baumann, Sun editor Larry Ryckman and the rest of the founders were working at a newspaper owned by Alden Global Capital—in this case The Denver Post, which had cut its staff from more than 300 journalists a decade ago to about 100 by 2018. Told to lay off another third of the newsroom, Ryckman and nine of his colleagues quit instead to found an outlet they could own themselves. “We decided to go that way because no one is trying to make a gazillion dollars,” Ryckman said. “We wanted to be equal partners in this.”
Like the other co-ops, the Sun doesn’t have a paywall but allows readers to buy memberships that give them access to premium newsletters and a preview of an opinion column for the next day. And while no one’s making a gazillion dollars, no one earns less than they did while they were still at the Post. They got off the ground with a grant from the former media start-up Civil, but now have nearly 12,000 paying members. Ryckman expects the Sun to be sustainable by the end of the year.
A local news vacuum can end up being filled by Facebook posts, email forwards, and other sources of tall tales seemingly designed to frighten those without a reliable source of information.
They’ve now hired three additional staff, two in the newsroom and one on the business side. New hires don’t automatically get ownership stakes, but Ryckman envisions reporters being able to work their way there, like making partner at a law firm. “We would like all of our journalists to be owners of the Colorado Sun at some point,” he said. “We very much want to remain masters of our own destiny.”
The Sun helped inspire perhaps the most high-profile employee-owned company in media right now—Defector, made up of staff who resigned in protest from the sports site Deadspin after rebelling against its private equity owners over, among other things, a directive to stop covering political and cultural topics that were only tangentially related to sports.
“It’s a little bit scary to own it ourselves, because if something goes wrong there’s no one to blame but ourselves,” Defector columnist Drew Magary told me. “But we were hoping to continue to do our jobs so that some faceless, nameless dipshit upstairs can’t suddenly disapprove of what we’re doing.”
Before launching Defector, the team looked into crowdfunding options like Patreon and Substack, but they were hesitant to commit to a tech platform that was outside their control. Any writers who lived through the boom and bust of Facebook traffic should be wary of putting all their eggs into one tech company’s basket, even if they co-own those eggs. They settled on a membership model like the Sun’s, with subscribers able to comment, receive newsletters, and eventually get other perks based on how much they pay. (Full disclosure: I subscribed to Defector months before writing this article.)
“We wanted to look and feel very much our own,” Magary said. “We wanted a website you want to go to, one that feels like home.”
Ryckman echoed that benefit: When you rely on readers for direct revenue, you have to serve them relevant ads and a high-quality user experience. Autoplaying videos, ads that track your every move, and cluttered websites that make it hard to read the actual news don’t have to come hand in hand with opening your (virtual) paper.
As the Colorado Sun grows, its 10 owners are facing a decision about where they want their business model to go from here. They’ve discussed becoming a multi-stakeholder co-op like The Devil Strip and the Mendocino Voice, keeping their own stakes and turning all their members into co-owners as well. Another option is going nonprofit, following in the footsteps of statewide digital publications like the Texas Tribune and MinnPost as well as national organizations like ProPublica and NPR.
For all the lack of trust in media, it’s hard to find a more credible source than the one you and your neighbors own.
The nonprofit model has been called the future of civic journalism, but it may not work for outlets like the Sun. The combination of grants, donations, and reader memberships has been a successful one for a range of publications, including local newspapers like the Tampa Bay Times and The Salt Lake Tribune. Community co-ops and advocates, however, see large swaths of the country that nonprofits can’t cover.
“I think the old way of looking at things was that you’re either for-profit, hedge fund owned, or you’re completely pure and nonprofit, and there’s nothing in between,” Ryckman said. “I’m a huge admirer of what [the founders] Evan Smith and John Thornton did at the Texas Tribune. But Colorado is not Texas, and we do not have access to the same kind of philanthropy. Colorado’s philanthropic community isn’t able to support a Texas Tribune.”
That competition for grants and donations is even tougher in smaller locales like Akron or Mendocino County. “Communities like ours aren’t necessarily full of foundations or wealthy philanthropists,” Maxwell said. “I think communities that don’t have a lot of existing economic resources can use this co-op model.”
A local news co-op can work financially, but getting it started is the hardest part. It’s no coincidence that the precious few U.S. examples operated for a few years before transitioning.
Tom Stites believes that’s where the Banyan Project comes in. Stites held editing positions at The New York Times, Chicago Tribune, and The Kansas City Times before setting out to combat the local newspaper crash. He and his partners were looking for a new business model that was digital first, self-sustaining, and easy to replicate. After research and deliberation, he said, supporting co-ops was the “obvious, obvious thing to do.”
“Readers should experience journalism relevant to their lives, respectful of them as people, and worthy of their trust,” Stites told me. “This was the only business model we came up with that well and truly fit.”
The Banyan Project is a nonprofit that will provide a web platform, mentorship, and community for local news co-ops that agree to meet a set of basic journalistic standards. Stites hopes co-ops that join can help and learn from one another as part of a Banyan network.
Stites wants to launch 20 news co-ops over three years, but the project is still fund-raising to get off the ground. He’s been in touch with the Mendocino Voice staffers, though, who in turn have spoken with The Devil Strip as they work through their co-op transition. The co-op community is a small one, but everyone involved knows the importance of working together to find a model that can work anywhere.
That’s partly because good news co-ops can have more than just a local impact. As we have explained in this magazine, a local news vacuum can end up being filled by Facebook posts, email forwards, and other sources of tall tales seemingly designed to frighten those without a reliable source of information. (See Paul Glastris, “Did the Fall of Local News Bring Us Authoritarianism in Washington?” in our July/August 2018 issue.) Nearby wildfires morph into a government conspiracy to burn down homes; peaceful protests become a front for busloads of violent anarchists looking to raze Main Street. “The lack of newspapers not only means that your local civic health is shot,” Stites said. “It also takes away the barrier to the really toxic stuff.”
For all the lack of trust in media, it’s hard to find a more credible source than the one you and your neighbors own. That’s the final part of the pitch The Devil Strip makes to potential co-owners: Not only are you buying a say in how your local paper is run, you’re also buying a stake in the civic health of your city and your country. “You have to be reliant on the people,” Moore-Dunson said. “If you’re a co-owner of The Devil Strip, we need you to be a part of the call to action.”