Yesterday’s announcement that E.W. Scripps acquired Midroll Media is a mile marker in the evolution of podcasting as an important media category. E.W. Scripps is one of the oldest and best established multi-dimensional media companies in the U.S., and Midroll Media is a leader in podcast creation, networking, and monetization.
We attended a press conference call yesterday afternoon, and immediately afterward spoke by phone with Adam Sachs (CEO, Midroll Media), and Adam Symson (SVP and Chief Digital Officer, Scripps) about the merger, its aftermath, and implications for podcasting.
“This is a big milestone for the industry.” –Adam Sachs, CEO, Midroll Media
One major question in this merger, as with other acquisitions of small media companies by big ones, is the extent to which Midroll operations and processes will continue unchanged. In particular, the company allows podcast creators a remarkable level of control over ad campaigns sold into their programs. Hosts may veto campaigns, and Midroll’s culture has always held that the creator is in control.
We asked Adam Sachs whether that culture would continue as a wholly owned subsidiary of Scripps.
“Yes,” Sachs answered decidedly. “It will absolutely continue. That is a key tenet in our relationship with our podcasters. We are a company built by podcasters. I host a podcast; everyone on the management team hosts a podcast. One of the most important elements of our business is the fact that podcasters can accept or reject campaigns. That’s not going to change.”
That was a clear answer, and we were curious about how the potential for more brand advertising would play into it. During the conference call, Adam Symson promoted the idea that access to Scripps relationships with national “big-brand” advertisers could benefit Midroll’s business. More generally, the entire podcast industry hopes that brand advertising will move into the space to balance the direct response campaigns which overwhelmingly characterize podcast advertising.
“It works exactly the same way,” Adam Sachs told us. “Some of our podcasters are going to be accepting of advertisers that others will object to, perhaps that they have experience with a product that they don’t like.” That point key into a podcaster’s ethic, particularly strong at Midroll, that sponsorship messages should be akin to personal endorsements. “We are absolutely excited about the opportunities on the advertising front now that we’ve been acquired by Scripps, but bringing in larger brand advertisers doesn’t change anything for our podcasters,” Sachs added.
The assumption that adding big-brand advertising should change the nature of advertising. At the end of the day, these advertisers are looking for effective ways to connect with the audience. Changing that effectiveness, by homogenizing it or make it bland in some way, would not benefit the advertiser, small or large. I can’t see anybody would want to reduce the effectiveness of the campaign. It is that implicit endorsement that makes this a special business.”
We asked about the possibility of merging sales forces, or augmenting the Midroll sales effort. Adam Symson replied.
“I think there’s definitely plans to grow the Midroll sales force, but no plan to merge or convert the Midroll sales force. I personally am a big fan of divergence. This kind of advertising is very different from spot radio and what we sell in Scripps Digital — the suite of display and marketing services that we sell to big-brand advertisers. This is so different that to converge it would eliminate the upside potential of the business.”
About the growth prospects of Midroll’s 200-show catalog of podcasts, Adam Sachs evangelized growth separate from the acquisition. “We are never satisfied with the size of the catalog. The acquisition could help with our reach. But the motivation and intention to acquire as many monetizable podcasts as we can, we are very motivated to building the shows we have, and continue to expand into new categories such as narrative and journalism.”
What does acquisition mean for the podcasting industry? Adam Sachs took on that general question. “This is a big milestone for the industry. I don’t think there has been a big acquisition in the podcast space until now. We consider ourselves to be the leader in the space. I think it’s a really big moment for the space, and we’ll look back on it that way.”