By Walt Hickey

Welcome to the Numlock Sunday edition.

This week, I spoke to Bloomberg’s Ashley Carman, who writes the Soundbite newsletter. Here's a recent thing what I wrote about it:

The hottest thing in music touring right now is selling affluent 30-somethings their old eye shadow and tight pants back for a considerable markup, with alt-rock bands making a killing on the road. The forthcoming When We Were Young festival in Vegas has sold 160,000 tickets, Blink-182’s North American tour just wrapped with $85.3 million gross on 564,000 tickets, which follows a 2021 outing by Weezer, Green Day and Fall Out Boy that grossed $67.3 million on 659,062 and an $88 million My Chemical Romance tour. Anyway, if any bookers want to take a look at my high school iPod Mini, I have absolutely categorically figured out exactly what the next three years of successful concert tours are going to be.

Right now the podcast industry is in utter chaos, the music industry is beseiged by an enigmatic TikTok and the rise of AI, and the main things that appear to be working in the record business are unexpected niches, like country music and Mexican regional music. Ashley’s covered it all, so I wanted to have her back on to chat about it, in audio no less!

Carman can be found at Bloomberg.

This interview has been condensed and edited.

Ashley, thank you so much for coming back on, it's a pleasure to have you.

Yeah, happy to be here.

You cover audio; it's a big beat, it has a lot going on, and it's been a really dynamic couple of months it seems, in your field. What's been going on?

Basically my beat, I started out covering the podcast industry over at The Verge for a number of years, then came over to Bloomberg, still with that intention to cover the podcast world, but also add in some of the music industry, really getting both sides. Obviously, audio can also include audiobooks, all the various genres of audio that exist in this world, but primarily focused on the podcast space and music industry. What's been going on? Podcasting has been having a little bit of a market correction reckoning. The music world is pushing for a whole new streaming model and wringing their hands over generative AI. So, busy dynamic moments on both sides of the industry.

I recall reading a little while ago that the audio slice of the pie, so to speak, is increasing, but the individual groups within it are rising and falling pretty dynamically. I guess let's talk a little bit about what hasn't really been working super well lately. You've written a lot about the podcast industry and the consolidation that we've seen in that. What's been going on in the past six months; it seems like there's been a serious contraction?

Yeah. So, essentially the very sped up version of the podcast world up until now is, starting around 2019, you had Spotify enter the space, spending a ton of money, which basically set off this huge gold rush around podcasts. Amazon entered the world with Wondery, adding it onto Amazon Music, Spotify obviously making its acquisitions, SiriusXM, iHeart, which of course has been in audio, and SiriusXM having been in audio, but really in earnest signing big lucrative podcast deals. And that goes on for a few years. You have the live audio craze of Clubhouse, and then this past year, really what's happened is this moment of, okay, we spent a lot of money on these podcast deals and locking up some of these big names in exclusive partnerships, but are we actually making our money back on those deals?

I think that's what we're starting to see now is this correction of, hey, what were these deals really worth?

Was this just a super frothy, hyped ecosystem that got us into some financial troubles? So, now, with that in the rearview mirror, some more awareness around the smart deals that could be made, you're seeing some consolidation in the space, even on the smaller network side, who were maybe benefiting from that frothy environment. Now they're like, okay, we need to figure out how we're going to survive in this ecosystem, especially when there's a broader ad pullback in the market. So, they're starting to consolidate, the bigger companies are laying folks off because they just got over their skis, as far as the investment, and yeah, it's just been a rough time, honestly, but I'm hoping that it turns a corner soon.

Yeah, it seems like frothy is a good word. What companies, what kind of podcasts and what industrial organization structure has been the most durable? It seems like the big guys who put a ton of money into recruiting maybe a lot of talent from movie and television, those haven't necessarily done as well, because they were very ad sensitive, but that's not everything. There are still a lot of things that are working in podcasts, it seems.

Yeah, and I guess the important caveat here is that podcasting is growing. Audio companies’ revenue is growing in the podcast world. It's not the type of downturn we're seeing where all of a sudden it's like we lost 7 billion listeners this month. It's not like that. The space itself is actually growing, it's just when it's in relation to the deals themselves and how much was spent for the return, it was maybe just a little too early for that moment. So what's working is people do enjoy listening to podcasts. I personally, I see it in my friends, which granted, I have the bias of being a media reporter, and my friends are also media people, but they buy stuff from podcasts. They enjoy engaging with it.

So from that perspective, I actually think podcasts have a lot of might, and there's been a lot of stuff written recently, not from me, but other great reporters, who have covered just how important podcasts are in the political landscape, as well. You can really see the impact and the amount of conversation they can drive and really bring people to make certain decisions. So I think that actually the spotlight is on them; it's just the business has been a little tricky.

Yeah, it's weird, I've seen a lot of podcasts that had been very ad supported for a while often start pivoting toward live events and whatnot, which is what music acts do historically as well. You don't always need to make all your money off of the physical sales, it can also just be actual events.

The podcast touring definitely still exists. I don't know if it's the biggest slice of the pie, but there's of course Patreon and subscriptions, which have been a success story for the podcasters that can make it work. So, there are alternate avenues for success.

What else isn't really doing all that swell when it comes to audio right now? I know that podcasts have had a hiccup, but you've also run a couple of times about how Spotify is looking to raise prices, potentially, and you're looking at some of these larger companies that have tried to really control a lot of the audio pie that might not be doing as well.

Yeah. So, I think what you're hinting at maybe is just the streaming environment for music. Really what we're seeing there is, it's really obviously reversed the trend of piracy, back in the day, and we're streaming now, companies are doing great, the music companies are growing, they're public, all of that. But what we're seeing in that world is a little bit of concern over the potential future, which is how do they continue growing? How do they maximize the dollar from the streaming services? You've seen price increases. And then also, even more somewhat forward facing, just how do you deal with generative AI when maybe that would lead to an influx of content out there?

How do you actually allow artists who do this for a living and maybe aren't necessarily totally financially motivated by it to actually have their music be heard and make money off of it? And then of course, in the music world, you also have the struggle that TikTok runs so much of this now in the conversation, so what do you do? How do you break artists? How do you make superstars when a lot of this is at the whim of an algorithm?

Yeah, I don't have it in front of me, but I feel like you wrote something a little while ago about how some of the major music companies are even starting to invest in some of these streams, whether they're the lo-fi or high-pitched streams, to capitalize on some of that social. Am I remembering that correctly?

Yes, and I also need to put myself back in that story. The piece that I wrote was about sped up songs, which is a TikTok trend; it's like chipmunk singing, it's just sped up tracks. And what the major labels have covertly done is run Spotify accounts that have all those tracks on there. So, it kind of gives off this veneer of, oh, this is some low-key TikTok DJ who put this up here, and I stumbled upon this big secret, when actually it's totally blessed by the labels and ensures that when you're listening to that song, they get paid the proper royalties.

Because obviously if some random person uploaded a song, I guess we would say illegally, without the proper rights, and they don't properly tag the rights holders, the rights holders don't get paid. So you could see the incentive to be like, here's your cool thing, but we're actually going to make our money off of it.

How widespread is that? That's wild.

I wrote about, I believe it was a Universal account that I wrote about, and I think I wrote about a Warner account as well. So, in those two cases, there were two different accounts. And then, gosh, I would need to check, but one of th...