Luminary is a podcast startup that has debuted with more than 40 exclusive shows and no ads. The company also has almost $100 million in funding and, for $8 per month, subscribers will get full access to the content lineup, which includes a new show from Lena Dunham and series from Conan O’Brien, Malcolm Gladwell and Trevor Noah. Co-founder/chief executive Matt Sacks stated that Luminary aims to be “synonymous with podcasting in the same way Netflix has become synonymous with streaming.”
The New York Times reports that, “for creators, Luminary is offering large upfront payment guarantees in exchange for exclusive rights to distribute their work, reducing the risk of a concept and, hopefully, encouraging greater creativity and higher production values.” Creators also get bonuses “if their shows reach certain listening thresholds.”
The Interactive Advertising Bureau and PwC reported that podcasts are predicted to earn $514 million in ad sales in 2019, with an expected rise to $659 million in 2020. But podcasters have discovered that it isn’t easy to make a living on ad sales, and, to reach the widest audience, “the same kinds of mass-appeal podcasts tend to get made.” It’s also not easy to determine how many people actually listen to the ads.
At New Enterprise Associates, a venture capital firm that invested in Luminary, partner Liza Landsman opined that, “Matt has figured out a smart and sustainable way to push the business forward — better discovery for listeners, allowing creators to focus on creating the highest-quality content possible and stop worrying about selling ads.” Luminary will “not be totally absent of ads … [but] will also offer a free area, where listeners can play any of the estimated 600,000 ad-supported and nonexclusive podcasts in the market.”
With 70 employees (40 of whom are engineers) in New York and Chicago, Luminary launched a marketing campaign “that includes outdoor advertising in New York, Los Angeles and Austin, Tex.”
Although it aims to be the next Netflix, Luminary faces several challenges, including that consumers may begin to question how many subscription services they need and want. The company also faces “an increasingly crowded field,” especially since Google reintroduced a podcast player. Spotify, which is now focused on podcasts, recently paid $230 million for Gimlet Media, which produces audio dramas such as “Homecoming” and “Crimetown.” In addition to free listening with ads and a $10/month subscription service, Spotify also “offers some exclusive podcast shows from stars like Amy Schumer and the rapper Joe Budden.”