The podcast-to-Hollywood pipeline

How valuable is podcast IP?

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The podcast-to-Hollywood pipeline

Variety published an in-depth look at QCode, a buzzy podcast startup that specializes in creating ambitious audio dramas that sometimes feature traditional Hollywood stars like Rami Malek and “Jane the Virgin” actor Gina Rodriguez.

This company is particularly interesting because of its stated business model. From the article:

QCode, which was founded in 2018 by Rob Herting, a former CAA agent, has a high batting average selling its scripted podcasts for adaptation into other mediums. Since 2019, when it premiered its debut offering, “Blackout,” starring Rami Malek — a week after he’d won the Academy Award for best actor — QCode has sold a dozen of them to be adapted into television series, movies and even books …

… Herting, 39, got the idea for QCode as he watched two simultaneous booms: one in intellectual property, the other in podcasting.

Of course, QCode isn’t the first media organization to figure out that there’s gold to be mined from adapting IP. Conde Nast built out an entire entertainment division oriented around repackaging content for visual mediums. Podcast networks ranging from Gimlet to Wondery have seen considerable success from selling their IP. With Netflix leading a streaming arms race, there’s an insatiable need for ready-made stories with already-existing audiences.

QCode seems to be somewhat unique in that it has IP adaptation built into the foundation of its business model, meaning that every podcast is viewed as a potential stepping stone to other deals. Obviously I’m an outsider, but I’m guessing that they listen to every series pitch through the lens of whether it has the potential to be adapted for TV, film, or some other medium.

Is this a viable business model? Let’s walk through some of the pros and cons.

Pros

Before we talk about IP adaptations, I’ll note that QCode monetizes its podcasts the same way as every other network: through advertising. Sure, its programming is much more expensive to produce than, say, a sports talk show put out by The Ringer, but QCode probably only needs to break even on most of its series as long as a handful of them get sold as TV shows or films.

Fiction podcasts can be a relatively inexpensive way to test out storylines. Voice actors don’t have to be on location and can wrap up their parts in just a few days, and you don’t have any of the super expensive sets and visual effects that can saddle Hollywood studios with tens of millions of dollars in expenses.

QCode can probably collect fairly sophisticated data on who’s listening to its podcasts and incorporate this data into its pitches. Hollywood is famously risk adverse — hence why it leans so heavily on already-existing IP — so being able to brag that your show got millions of downloads will certainly grease the wheels. Not only does it prove that the story is marketable, but you can probably rely on at least some portion of the show’s fanbase to check out and/or evangelize the Hollywood adaptation. It also probably doesn’t hurt when you get to name drop a famous actor like Rami Malek as someone who was involved with the original production.

Lastly, these IP adaptations don’t always have to go one way. SiriusXM, for instance, recently signed a deal to produce podcasts featuring Marvel super heroes, and every streaming service from Netflix to HBO is commissioning podcasts to accompany their TV programming. I wouldn’t be surprised to see QCode to engage in these sorts of partnerships.

Cons

Limited run series can be difficult to sell advertising against. It’s almost impossible to know in advance the size of a show’s audience, and if it becomes a surprise hit then there’s a very limited window to bring in new sponsors. This can be mitigated somewhat by dynamically inserted ads, but those tend to sell at lower CPMs.

As for adapting IP, Hollywood is famously fickle. It buys up lots of options, sure, but options aren’t what bring in the big bucks. What you really need is for your show or film to go into production, and that’s notoriously difficult to achieve even for industry veterans.

Even if you manage to get a show or movie made, there’s no guarantee it’ll be a hit. My guess is that QCode would generate the most money if a show gets renewed for multiple seasons or if a movie is a huge blockbuster success. That’s obviously difficult to achieve.

If QCode is to flourish, then it’ll probably need to rely on a handful of cash cows that subsidize its money-losing shows. If it suffers a fallow period where its adaptations are caught up in production hell — or even worse, if the streaming TV bubble pops — then it probably couldn’t survive on podcast advertising alone.

Either way, this will be an interesting company to watch. I’m definitely rooting for it to succeed.

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Video podcasts are low-hanging fruit

Spotify announced last week that it’s going to make its video tool more widely available to podcasters. Meanwhile, YouTube is the world’s third most popular podcast player. I wrote about the surprising popularity of video podcasts and why you should consider adding a video component to your podcast production. Check out my piece over here.

Quick hits

This provides a good look at how Twitter partners with media companies to sell pre-roll ads on their videos. [Digiday]

The line between the influencer industry and OnlyFans sex work is becoming increasingly thin. [Vox]

Apparently Anchor no longer distributes an RSS feed to all podcast players by default, meaning you need to opt in. That means that Spotify is amassing thousands of exclusive shows from new Anchor users who don't opt in to RSS feeds. [Sounds Profitable]

An interesting example of a media company carving out a niche within a niche: a tech news site that focuses entirely on non-white tech workers. [Nieman Lab]

Publishers are attempting to personalize their ecommerce content based on the individual user. [Digiday]

Apple News is expanding into local. [Apple]

Romance fiction is a $1.4 billion market. [BookRiot]

YouTube's emphasis on Shorts, its TikTok competitor, may be harming the reach of longform videos on its platform. [The Information]

A Bloomberg reporter quit his job a year ago and launch a Substack. He now generates around $200k from 1,374 subscribers. Perhaps most impressive is he's managed to convert 11% of his free list into paying subscribers. [Newcomer]

INTERESTING: Lots of different kinds of creators can generate revenue on Patreon, but podcasters are the biggest earners, by far. [The Information]

This makes a good point that the firewall that sits between editorial and advertising ensures journalistic independence, but it also results in the journalists having very little bargaining power, hence why they're often underpaid. [The Rebooting]

A good profile of New York Magazine's editor. [Adweek]

ICYMI: Macmillan was an early podcast pioneer. Here’s what it’s up to next

Vice President of Podcasting Kathy Doyle explains how diversifying into different formats helps Macmillan sell more books.

Let’s chat

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Simon Owens is a tech and media journalist living in Washington, DC. Follow him on Twitter, Facebook, or LinkedIn. Email him at simonowens@gmail.com. For a full bio, go here.