Over the past five years, West Hollywood-based Wondery transformed from Hernan Lopez's hunch about the future of audio to the sixth largest podcast publisher in the U.S., boasting over 8 million monthly listeners and 30 hit shows.
A former 21st Century Fox executive, Lopez started the podcast studio with the belief that in-depth, narrative audio stories were poised to bloom much like serialized television dramas had when he was in TV; he wanted to make "Breaking Bad" and "Mad Men" versions of podcasts.
Wondery has produced dozens of original series including "Dr. Death" and "Business Wars," and has 19 shows currently in development to become television series. Sony and Apple are reportedly interested in snapping up the producer as the media behemoths try to ramp up their presence in the growing podcast market.
Hernan Lopez started Wondery with the belief that in-depth, narrative audio stories were poised to bloom.
Wondery does not publicly disclosed its financials, but Lopez has previously said the company is profitable. Some analysts reportedly peg its worth between $300 and $400 million. About three-quarters of Wondery's revenue comes from advertising, but Lopez said its 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.
While the company is enjoying its moment, Lopez is personally under fire. He's facing allegations for wire fraud and bribery stemming from his time at Fox, in relation to broadcasting rights for international soccer tournaments. He has denied any wrongdoing but the situation has cast a cloud over the company.
dot.LA spoke with the Wondery chief about the allegations, why he thinks the podcast industry needs to diversify its revenue streams, and how memories of the early days of Netflix are driving the surge of podcasting M&A.
Regarding the allegations against you of bribery and wire fraud – around which you've said you maintain your innocence and believe you will be exonerated by a jury – what's your understanding of how the prosecutors even came to the impression that these allegations occurred and that you were involved?
All I'll tell you is that they got it wrong. I know that they got it wrong and my lawyers know that they got it wrong. And, I'm very confident that when the facts come out they will see that they got it wrong, but I don't really want to comment beyond that.
How is this episode affecting the company and you personally?
As you would expect, it's something that you feel is unfair, because being unfairly accused of something, wrongly accused of something, it's just...not great. What can I say? But I just keep my chin up, and I'm going to work every day knowing, in my heart, that people that know my character and know me – that if you ask anybody they will tell you, anybody who knows me, knows that there's no way that that will be true. And it's not affecting the company.
What can you tell me about the swirling talks that Wondery might soon be acquired?
The only thing that we're saying publicly is that it shouldn't be surprising that companies are approaching us.
Hypothetically speaking, then, if you were further to explore being acquired, what kind of arrangement would be attractive to you?
All I can say is that we love being independent. I've had a lot of fun and I'm still having a lot of fun running this company and building it from the ground up. So for us, that independent spirit means a lot. Driving value and continuing to make the shows that our listeners care about is of utmost importance. And making sure that our employees are thriving and happy is hugely important; every single one of our employees has an option or is a stockholder and I just want to make sure that whatever we end up doing, it's the right outcome for them.
What's your vision on how you see the podcasting industry growing and improving its monetization?
The more diversified your revenue streams, and the more recurring, the better for the health of a business. So I think we're going to see more people realizing that revenue streams beyond advertising don't detract from advertising revenue because not only can you have multiple revenue streams, but they sometimes can even help your advertising business. Every time there's a television show on air about one of our podcasts, our listening goes up, and that in turn helps our advertising business and also helps our subscription business, because it's just more awareness of the story and more awareness of the Wondery brand.
How has the pandemic affected Wondery in terms of audience size and revenue?
We were hit in the second quarter on advertising revenue but that's way more than reversed now. On audience size, we're now higher than we were before the pandemic. I think that's true industry-wide, because what's happened is that a lot of people discovered how they could listen to podcasts at home, in moments of the day that they weren't previously listening.
Q3 was through-the-roof strong. For us, it was essentially double year- on- year. And Q4 is very strong as well. Our non-advertising revenue was significantly up versus last year in the second quarter and throughout this year; we finalized a number of licensing deals in the second quarter and that laid the foundation for recurring revenue over the following months.
What are your plans for Wondery's further growth?
The primary driver is continued audience growth, and better monetization from multiple revenue streams and Wondery Plus; a subscription business is a very strategically important part of our business because it not only brings revenue, but it also allows us to connect directly with our superfans.
We also want our share of international revenue to keep increasing over time. We've been doing limited local language translation, partially because the marketplaces outside of the U.S. are younger than the U.S. is, and we have wanted to concentrate first on monetizing our English-language audience, which is significant in Canada, Australia, and the U.K. But now we're ready to accelerate our local language strategy, starting next year, and even produce fully local stories in some places.
How does being headquartered in Los Angeles help Wondery?
Los Angeles is the capital of the entertainment world, especially when it comes to television, and a lot of what we do is borrowed from the television and film industries, both on the creative and editorial side as well as the marketing toolkit. So it's easier here to talk to somebody who knows what characters and stakes are, because everybody in Hollywood talks about characters and stakes.
What do you see as the driver behind the recent consolidation in podcasting, and to what extent do you think it will continue, whether Wondery's involved or not?
I'll give you an analogy. In 2010, when I was at Fox – and you could've said the same thing at Disney or Viacom or Comcast – we were all looking at Netflix and thinking, 'That's a cute little company.' It was worth $3 billion and I can guarantee you, all of us, at the time, thought it was hugely overvalued – that one day people are going to realize how silly they were that they were valuing Netflix at $3 billion.
In 2010, they were two years into streaming, broadband connections weren't as good and streaming libraries were not great and people barely had started using the iPad, so Netflix was still better known for the DVD business than it was known for the streaming business. $3 billion. Only 10 years later, how much is Netflix worth today? More than all of the other media companies. So, I think what's happened is that a lot of the companies that missed out on the potential to buy Netflix, and a lot of companies who are parallel, are looking at that and saying, 'Look, are we going to miss out on a massive consumer trend?' It's undeniable that there's an increase in consumption of audio in general, and in particular of podcasts, so companies want to be part of that consumer trend.
Do you see that affecting Wondery's competitiveness?
I don't, because there's something really powerful about being a neutral and independent platform with the ability to launch 30 number one hits, which is when creators want to make their show, they typically care about three things: a) how they're treated creatively; b) how many listeners are their shows going to be in front of; and c) the economics. It's hard to find the ideal combination of all three for any creator and Wondery's an ideal home for all three. There aren't many other companies that have taken a complex story idea to an end product as repeatedly as we have.
Editor's note: This interview has been edited for brevity and clarity.
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At a time when the clinical health care workforce is suffering from burnout and attrition in the wake of the pandemic, Regard’s technology looks to alleviate some of the pressure on health care workers. The startup’s AI-enabled software is integrated directly into a provider’s system and uses an algorithm to analyze patients’ medical records, allowing physicians to more easily diagnose them.
Since launching its flagship product in 2020, Regard’s technology has been used on more than 30,000 patients, according to the company. The startup charges health care providers around $500 to $700 per month for access, co-founder and CEO Eli Ben-Joseph told dot.LA, with its customers including Torrance Memorial Medical Center, Cedars-Sinai Medical Center and roughly a dozen other hospitals across the U.S.
“We’re building something that’s a game-changer for doctors,” Ben-Joseph said. “It’s helping them catch medical conditions that they would have missed. So regardless of market conditions, we’re able to have value and I think investors saw that and got excited.”
Co-founders from left to right: CEO Eli Ben-Joseph, CTO Thomas Moulia, and COO Nate Wilson. Courtesy of Regard
Founded by pre-med students Ben-Joseph, Nate Wilson and Thomas Moulia in 2017, Regard got its start through Cedars Sinai’s Techstars-backed accelerator program. It was at the accelerator program that Ben-Joseph observed physicians’ workflows and saw the need for a product like Regard’s; he recalled noticing how doctors would constantly pop in and out of a patient’s room, shuttling between the patient and a computer where they could enter data and notes.
“I think that’s why so many doctors are burning out now, as they just don’t have software that really enables them,” Joseph said.
Ben-Joseph—who coupled a bachelor’s degree in bioengineering from MIT with a master’s in computer science from Stanford—noted that Regard’s technology can automatically detect up to 50 of the most common medical conditions, including heart failure, diabetes, obesity, depression and anxiety.
“We have a 90% accuracy rate at the minimum,” he said. “Physicians will look at our software and accept it, but it’s not perfect. We tell physicians to treat it like the relationship [with a] medical student.”
This year’s focus will be different from the typical accelerator: Startups in this group will test their products directly with companies active in the ocean economy for four months, collecting data on what works, what doesn’t and further developing proof of concept. Braid Theory will help these startups come up with their business plan and pitches, and connect them to investors and potential partners in the field. In return, it takes an equity warrant that can be converted after three years.
The startups joining Braid Theory typically span industries like port logistics, aquaculture and energy, all of them aiming to test their technologies and untapped opportunities of the burgeoning industry. The accelerator’s goal is to bring those companies from pre-revenue into commercialization.
And all of them are looking to solve challenges within the blue economy ecosystem, many of which have also been exacerbated by the COVID-19 pandemic. With 31% of all goods floating across the ocean to and from the U.S. pass through the Port of L.A. and the Port of Long Beach, COVID-19 strangled supply chains and increased the volume of goods handled at L.A. 's premiere dock by nearly 16% between 2020 and 2021. This created numerous logistical challenges for the dwindling workforce at the nation’s busiest ports while increasing emissions.
“The thing that we're trying to think about are ways in which we can leverage biological systems and software to make more immediate changes in markets that have a low barrier to entry,” Braid Theory co-founder Jim Cooper said of accelerator’s approach to addressing a wide range of climate and logistical issues.
Cooper founded Braid Theory with his colleague Ann Carpenter after the pair left PortTechLA, a maritime and logistics incubator that shuttered in 2016. The two wanted to create an accelerator for port and ocean startups that went beyond logistics and took into account other promising sectors of the ocean economy, including sustainable fish and plant cultivation as well as tools to make the shipping sector more efficient.
Jim Cooper co-founded Braid Theory with his former colleague from PortTechLA, Ann Carpenter.Image courtesy of Braid Theory
Accelerators like Braid Theory are attempting to fill a void in the blue economy ecosystem. Despite being home to several universities with robust maritime research centers and a giant port infrastructure that could be better optimized, few startups survive in Los Angeles due to a lack of early stage funding, according to a 2020 report from the Los Angeles Economic Development Corporation. The accelerator provides funds and lab space and investor connections to nascent startups tackling a wide range of ocean-related problems.
The same report found that ocean startups, particularly early-stage ones, have a difficult time getting funding to accommodate the need for expensive lab equipment like centrifuges, chillers and pipettes. Startups in the blue economy space are primarily funded through federal and state dollars, NGOs and philanthropies, and competitions. But while angel funding has historically been slow to trickle into blue economy startups, some are starting to take note of the size of the market. In the first cohort, eight out of 12 startups received federal funding and investor funding with the help of Braid Theory.
The accelerator’s first graduating class included Florida-based Tampa DeepSea Xplorers, which makes seafaring autonomous vehicles that can scrape the bottom of the ocean and collect data faster for researchers to use as they study climate change impact or source for different medicines. Irvine-based ReCreate Energy is another graduate, which sources algae to create a more sustainable bio-crude oil that can be used at gas and oil refineries. While FlashQ, a Canada-based AI platform, is trying to reduce truck congestion and the emissions caused by them at the port by creating a scheduling platform that optimizes waiting and shipment times.
“The key is the opportunity, the opportunity was there,” Mimi Carter, a biotech investor with the Pasadena Angels, said of the business opportunities in the ocean market. “We saw a market that was unaddressed and is still an emerging market.”
A cluster of cranes at the Port of Long Beach.Photo by DJANA 575/ Shutterstock
To Carter’s credit, L.A. County boasts 75 miles of coastline that the LAEDC expects by 2023 will produce more than $80 billion in regional output, make roughly $50 billion in gross county product, and create over 200,000 direct and indirect jobs, according to a 2020 report. And, according to the Los Angeles Economic Development Corporation, economic and job growth in this sector relies heavily on the creation and implementation of new technologies, making angel investors necessary players in bolstering the ocean economy.
“Not only do we want to be investing in a sustainable product, but someone we count as a first mover,” Carter said of her investment approach. Already, groups like the Pasadena Angels and Techstars L.A. have made investments in the space. Reece Pacheco, a blue economy angel investor, is quietly working on a new venture fund around the blue tech space that hasn’t been announced yet.
“What we're starting to see is there are entrepreneurs who are either coming up through these research firms, or there are entrepreneurs who have cut their teeth elsewhere but care about the ocean,” Pacheco said.
There’s also Braid Theory’s neighbor (and landlord), AltaSea, the nonprofit research hub that has facilitated a number of partnerships with companies across the world.
“We do want to become the leading destination for the blue economy in terms of technology, finance, the education pathways it takes for students to get into these jobs in the future, and then the actual workforce development for the jobs of the future,” said Terry Tamminen, the new CEO of AltaSea.
Braid Theory’s makeshift shipping container-turned-lab is next door to a slew of other startups and projects in the blue economy space. USC researchers are incubating bubbling cauldrons of kelp that could create biofuels and alternative food sources. While Oceanographer Robert Ballard, who found the Titanic wreckage in 1985, set up a sea exploration program a few doors down.
“The ocean is more than a destination for tourists and a place for Jacques Cousteau and David Attenborough to go diving,” Tamminen said. “It's actually something right at our doorstep that we need to protect for our own survival, but it’s also an economic opportunity.”
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