Luminary Media LLC, a venture-backed company, has raised $40 million to join the rapidly expanding realm of podcasting and audio.
Unlike most of its competitors, which support their businesses primarily through advertising, Luminary Media’s business plan includes signing users up for a subscription service granting them access to a portfolio of premium podcasts, according to The Wall Street Journal citing people familiar with the matter.
The venture, which has offices in Chicago and New York, is being led by Matt Sacks, a principal at New Enterprise Associates. NEA has teamed up with other venture and high net-worth investors to back the venture, which is slated to launch some time next year, according to people familiar with the matter.
The company has begun approaching podcast creators including Wondery, PRX, HowStuffWorks and Cadence13 in recent weeks, and has already begun to strike licensing deals, according to people familiar with the matter. Luminary Media is guaranteeing podcast creators revenue up front in exchange for the rights to put their work on its platform, according to people familiar with the matter.
Current plans call for about 75% of Luminary Media’s content to be original within 36 months of launch, according to a person familiar with the matter.
According to WSJ, the company’s philosophy touches on two trendy topics for media investors: audio and subscription-focused media companies. Audio companies such as Gimlet Media, Wondery and 60dB have raised millions from investors in recent years, riding a wave of exploding listenership in the U.S. and beyond. At the same time, subscription-backed media startups such as The Information, Stat and The Athletic have all found their footing in a digital advertising realm dominated by Google and Facebook .
The total audience for podcasting is growing. About 73 million Americans age 12 and up listen to podcasts at least monthly, according to a 2018 survey by Edison Research, up 17% compared with 2015.