LA Tech Updates: Apple Podcast Vet Joins QCODE, Amazon Reportedly in Talks to Buy Wondery, Pharrell's New Black Ambition Incubator
- Apple Podcast Veteran Steve Wilson Joins Startup QCODE
- Amazon in Exclusive Talks to Buy Podcast Studio Wondery, Wall Street Journal Reports
- Pharrell Launches Black Ambition Incubator
Apple Podcast Veteran Joins Startup QCODEwww.sonos.com
QCODE, a Los Angeles podcast startup run by a former Creative Artists Agency talent agent, snagged longtime Apple podcast executive Steve Wilson. The 15-year veteran will become QCODE's chief strategy officer.
QCODE, which last month raised $6.4 million in a Series A round led by Sono, is positioning itself as a funnel for Hollywood.
Founded by Rob Herting, a former agent who had represented largely writers and filmmakers, the company has produced eight shows since 2019. Several have been auctioned for film and television, including "Dirty Diana." Amazon picked up the 6-part erotic drama for a TV series.Wilson, who most recently ran marketing for Apple Podcasts, brings insights from the behemoth platform as the industry sees revenues soar. Advertising brought in near $1 billion this year, according to Interactive Advertising Bureau's podcast report prepared by PwC.
Amazon Reportedly in Exclusive Talks to Buy WonderyHernan Lopez started Wondery with the belief that in-depth, narrative audio stories were poised to bloom.
Amazon is in "exclusive talks" to buy podcast company Wondery and subsume its 30 hit shows and over 8 million monthly listeners into its empire, the Wall Street Journal reported on Wednesday.
The talks reportedly value Wondery above $300 million, in line with previous estimates from analysts, when Apple and Sony were said to have expressed interest.
Wondery has produced dozens of original series including "Dr. Death" and "Business Wars," and has 19 shows currently in development to become television series.
The company does not publicly disclose its financials, but chief executive Hernan Lopez has previously said the company is profitable. About three-quarters of Wondery's revenue comes from advertising, but Lopez has said the company's revenue share from content licensing is growing (Wondery owns the intellectual property for all of its originals). It also launched a subscription service, Wondery Plus, in June and is currently looking to expand its international footprint.
Wondery, the West Hollywood-based company with the largest audience of any independent podcast producer, has been the subject of swirling rumors that several suitors are interested in acquiring it.
After a pandemic-induced decline that struck much of the podcasting industry, Wondery's audience has surpassed its pre-COVID levels. Its Q3 revenue was about double year-on-year and its Q4 performance has been strong, Lopez previously told dot.LA.
Podcasting overall now attracts over 100 million monthly listeners, according to Edison Research. The Interactive Advertising Bureau projects podcasting revenues to exceed $1 billion by 2021.
That growth has spurred somewhat of an arms race, most evident in Spotify's spending spree, which also has helped that company diversify from its reliance on streaming. Amazon Music is one of Spotify's biggest competitors along with Apple Music, and recently expanded into podcasts as well.
Acquiring Wondery would give Amazon more content to slide into Amazon Music, a scaled-down version of which is free for Amazon Prime subscribers. Combining that content with its Alexa smart speaker also could empower the company to capture more eyes and ears in the increasingly competitive attention economy.
The talks are reportedly ongoing and no deal has been confirmed.
Rapper and producer Pharrell Williams released "Entrepreneur" with Jay-Z earlier this summer, a song that became an anthem for Black ambition. Now, Williams is launching an incubator to put money behind his message.
Called Black Ambition, the nonprofit aims to invest in Black and Latino startup founders, and it's beginning by creating two prize competitions set to close in July 2021. The effort backed by Adidas, Chanel and philanthropic organizations including The Rockefeller Foundation and the Chan Zuckerberg Foundation. Silicon Valley startup investor Ron Conway and Buzzfeed founder and CEO Jonah Peretti also contributed.
The first competition will award up to $250,000 to current students or recent alumni from a historically Black college developing or in the seed stage of a company. Smaller prizes will be awarded to at least nine additional teams.
The second competition, called the Black Ambition Prize, will give $1 million in seed money to an early-stage company focused on tech, design, healthcare or consumer products and services. Another nine teams will get smaller prizes. Finalists will be connected with and mentored by a network venture capitalists and angel investors.
"Because we don't have enough of the market share, our kids end up having issues with disproportionate access to healthcare, disproportionate access to education and as a culture, we have disproportionate access as it pertains to legislation and representation," Williams said in a video announcing the news.
Williams was inspired to pool talent from historically Black colleges and universities and build a new pipeline of investment and resources to young people.
"We want to lift our HBCUs. They lift so many of us. They deserve to be in lights," Williams said. "We think it's high time that we own more companies.
In August, Williams published a piece in Time Magazine that accompanied a cover spread on "The New American Revolution." It coincided with his release of "Entrepreneur," the song and music video he produced with Jay-Z as a tribute to Black founders across the nation.
"Recent events and tragedies have illustrated the always existent stark divisions in the American experience, and while entrepreneurship has long been a tenet of the American dream, marginalized people have faced long-standing barriers to success," Williams said in a statement.
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Sonos — a company known for their speakers — is quietly becoming a player in the world of audio content. The company launched Sonos Radio earlier this year and last week investing in the studio that produced Demi Moore's series "Dirty Diana."
The Santa Barbara-based manufacturer led a $6.4 million Series A round into QCODE, the Los Angeles podcast startup run by a former Creative Artists Agency talent agent. C Ventures also joined the round. Sonos is taking a page from other tech giants that have been acquiring and investing heavily in small podcast studios.
The podcast rush is in full force as Hollywood mines podcasts for movies and music streamers compete for content.
Last year, Spotify bought Gimlet Media and Anchor. At the same time, radio veteran Entercom bought independent studio Pineapple Street Media and Cadence 13. Spotify is now eyeing TV and film production, further breaking down the lines between the mediums. Wondery, the studio behind "Dr. Death" and "Dirty John" is looking for its own buyer.
As for Sonos, spokesperson Nora Hickey said the investment was an effort to improve user experience across "every audio touchpoint."
Los Angeles-based QCODE has produced eight shows since 2019, several of which have been auctioned for film and television, including "Dirty Diana." Amazon picked up the 6-part erotic drama for a TV series.
CAA agent Rob Herting, who for 10 years represented mostly writers and filmmakers, founded the podcast studio with an eye toward narrative stories.
"I listened to podcasts in my spare time when my eyes were sore at the end of the day," Herting said. "I really got into it and started to think more and more about it more as a new avenue for original storytelling."
But, when he left CAA to start QCODE last year, companies often told him the scripted fiction he wanted to produce wouldn't catch on. He often heard it was "really hard to do" and didn't make money.
"It's radically different right now," he said. "Everyone seems to be making these shows now. Obviously, the space in general is evolving."
He said that while a handful of companies are making fiction podcasts and scripted shows, there's still room for more. These types of podcasts could eventually overlap with audiobooks, an industry that's taken off. Last year audio book sales hit $1.2 billion, according to a study from Edison Research.
Herting could not yet say whether his studio would begin producing exclusive content for Sonos Radio, which launched earlier this year to feature Sonos products. The add-free station streams original programming and music from partners like iHeartRadio.
That prospect, coupled with QCODE's talent pipeline, might explain where the money is in this investment round, James Cridland from the news site Podnews said.
"Sonos perhaps sees it as helpful to own more exclusive content for their speaker systems," he said. "It seems clear to me that the value of many podcast studios and networks has been, in part, driven by the value of their IP rather than solely their podcast properties."
L.A.-based QCODE produced Demi Moore's series "Dirty Diana."
The Podcast Rush
Individual podcasts are also getting gobbled up by big names in the industry. Gridland said "The Joe Rogan Experience," a talk show Rogan has hosted since 2009, will become exclusive to Spotify on December 1 as the company looks to distinguish itself in the increasingly crowded space.
"These startups are nimble and very quickly navigating an ever-changing landscape, and thus are positioning themselves to be ripe for acquisition by many of the major media companies entering the space," said Adam Friedman, a global client strategy executive at CAA and investor at Connect Ventures.
Herting said that his studio looks for writers and producers with ideas that could grow into other mediums. But auctioning them for the screen isn't the primary goal.
"It's definitely part of the calculation," Herting said. "They don't get picked up for TV or film if they don't work well for audio first. What's exciting for us is creating a show in audio that can grow into other mediums but still live in audio."
A number of smaller and independent producers are churning out scripted fiction podcasts, he said, and now bigger names like iHeartRadio are following suit. It could be where the industry is headed.
"With everything that's going on in the world and in the country, I do think there's this element of escapism to it," Herting said. "We've all been cooped up in our homes scrolling through Netflix. This is another avenue of storytelling where you can really sink into things and you don't have to be planted on your couch to do so."
**This story has been updated to clarify Adam Friedman's investment position and include C Ventures as an investor.
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