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 along with C Ventures sunk $6.4 million into QCODE, the Los Angeles podcast startup run by a former Creative Artists Agency talent agent. Sonos is taking a page from other tech giants that have been acquiring and investing heavily in small podcast studios.
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The podcast rush is in full force as Hollywood mines podcasts for movies and music streamers compete for content.
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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.
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As for Sonos, spokesperson Nora Hickey said the investment was an effort to improve user experience across "every audio touchpoint."
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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.
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CAA agent Rob Herting, who for 10 years represented mostly writers and filmmakers, founded the podcast studio with an eye toward narrative stories.
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"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."
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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.
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"It's radically different right now," he said. "Everyone seems to be making these shows now. Obviously, the space in general is evolving."
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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 <a href="https://www.audiopub.org/uploads/pdf/2020-Consumer-Survey-and-2019-Sales-Survey-Press-Release-FINAL.pdf" rel="noopener noreferrer" target="_blank">study</a> from Edison Research.
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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.
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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.
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"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."
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<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.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.5B7AmutozNziX0vqlaZv3fxrr5vpReZl2FJiXd3cYd0/img.jpg" id="20492" class="rm-shortcode" data-rm-shortcode-id="f2c8b20b2f644e70f85f947fdafeee30" />
<small class="image-media media-caption" placeholder="Add Photo Caption...">L.A.-based QCODE produced Demi Moore's series "Dirty Diana."</small>
</p><h2>The Podcast Rush</h2><p>
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.
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"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. </p><p>
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.
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"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."
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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.
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"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."
</p><p>**<em>This story has been updated to clarify Adam Friedman's investment position and include C Ventures as an investor.</em><br/></p>
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Artists behind any of the 50 million-plus tracks featured on Spotify may start to see a new trickle of royalty revenues coming in starting Wednesday. The Swedish company has taken another step to expand its podcast offerings by drawing on its musical roots.
Podcasters using Spotify's podcast-creation tool Anchor, which the company acquired in early 2019, can now include songs from Spotify's extensive library in their podcasts. Just as artists receive royalties on their music streams, so too will they get paid for songs that appear in Spotify podcasts.
<p>In addition to potentially helping artists earn a bigger royalty paycheck and offering podcasters new creative tools, the move also appears to be aimed at establishing Spotify as a go-to podcasting platform. The company is leveraging its existing licenses with rights holders such as record labels and publishers to give Anchor creators the new functionality. </p><p>Spotify subscribers will be able to hear the full tracks included in podcasts. Those using the free, ad-supported version will only hear a 30-second teaser. That, however, is the listening threshold at which royalty payments are triggered, so artists will benefit either way. </p><p>Podcasters using the tool can still use Anchor's sponsorship program to generate income through host-read ads, but the show must include at least 10 minutes of talking.</p><p>The feature will roll out in the U.S., U.K., Canada, Australia and New Zealand before potentially expanding elsewhere. As part of the release, Spotify has released seven shows that use the new format, including "Conspiracy Theories: Music Edition" and "60 Songs That Explain the 90s." </p>
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With an ambitious goal to building the Youtube of audio, Los Angeles-based Vurbl announced Monday it has closed its $1.3 million pre-seed round with lead investor AlphaEdison with participation from Halogen Ventures and Ten13. The funds will be used to launch a platform later this year with millions of pieces of audio and podcasts.
<p>"We know how user generated content works, we know how social and SEO work, we know how digital advertising work, and most importantly, we keenly understand the particular way you must stitch them all together to make a great UX for listeners, creators AND advertisers," founder and CEO Audra Gold wrote in an email to dot.LA. </p><p>As opposed to audio streaming companies such as Spotify and Luminary which have spent millions acquiring shows, <a href="https://vurbl.com/" rel="noopener noreferrer" target="_blank">Vurbl</a> plans to differentiate itself by providing mostly cheaper user-generated content. It says it will also be the first scaled open market, realtime programmatic audio ad platform, doing for audio what has been so lucrative for video on Youtube.</p><p>"Because of this, Vurbl is poised to revolutionize the world of digital audio advertising," Gold said. </p><p>Gold previously founded Product N, a product management consulting and recruitment firm, and led product teams at Rubicon Project, The Mighty, Pluto TV, Fourthwall Studios and Defy Media (formerly Break Media). She also held senior product roles at WeddingChannel/TheKnot, Viviendi Universal's online division, and IGN.com.</p>Apple owns the dominant podcasting platform even though audio is low on its list of priorities. Spotify has been on a <a href="https://www.theverge.com/21265005/spotify-joe-rogan-experience-podcast-deal-apple-gimlet-media-ringer" rel="noopener noreferrer" target="_blank">spending spree</a> to acquire more big name podcasts like Joe Rogan. Luminary raised more than $160 million to fund a subscription model with a hefty marketing budget but has <a href="https://www.bloomberg.com/news/articles/2020-05-13/podcaster-luminary-seeks-fresh-cash-to-buoy-struggling-business#:~:text=Luminary%20Media%2C%20the%20money%2Dlosing,people%20familiar%20with%20the%20matter." rel="noopener noreferrer" target="_blank">burned through cash</a> and struggled to attract subscribers.
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