As podcast consumption continues to grow at a steady clip, the medium is attracting new interest from deep-pocketed investors. The newest entrant is Luminary Media, which has raised $40 million to make a splash in the on-demand audio space.
The venture capital-backed company plans to launch a subscription-based product in 2019 that aims to be “the Netflix of podcasting,” according to the Wall Street Journal. While the ultimate goal is to mostly rely on original content, Luminary Media has begun approaching podcast creators to license their content, including Wondery, PRX, HowStuffWorks and Cadence13, which Entercom owns a $45 million stake in. The company is guaranteeing content creators revenue up front in exchange for the rights to post their podcasts on its platform.
The venture is being led by Matt Sacks, a principal at New Enterprise Associates, a VC firm that specializes in technology and healthcare.
“Luminary intends to be a better Podcommunity for all,” Sacks told the Journal in an email. “We want to be a better answer for creators and a better experience for listeners. We are podcast fans who love podcasts like the creators and listeners do, and our mission is to cultivate, amplify and elevate this special community.”
Luminary’s business plan is attractive to investors because it embraces two hot media trends – audio and subscription-based content.
While most podcast networks are ad supported, the concept of a subscription based podcast offering is nothing new. Scripps-owned Stitcher offers Stitcher Premium, priced at $4.99 month. Amazon’s Audible, whose TV spots were unavoidable during NBC’s Kentucky Derby telecast (Audible the horse came in third place), has a subscription service for audiobooks and podcasts. And subscription-based Spotify continues to bolster its podcast offering, having just added all of NPR’s podcast catalogue to its Spotlight feature.