EP 55 - Michael Dealoia - Turning a Startup into a Global Podcast Network

Ever wondered how a small startup can turn into a global podcast network with millions of downloads? Join us as Michael Dealoia, CEO of Evergreen Podcasts, shares his journey from running a small operation with just two interns to leading a podcast powerhouse with over 20 million downloads. Learn about the early days, the key rebranding from Front Porch People to Evergreen, and how he overcame financial and operational challenges. Michael also talks about the podcast industry in 2017 and how giants like Wondery and Gimlet influenced many. In this episode, we dive into monetizing podcasts, maintaining high video quality, and the importance of network size for risk management. Hear about the impressive growth from 10,000 to 100,000 monthly downloads, the benefits of video podcasts on YouTube, and the importance of sound quality, effective promotion, and strong social media strategies. We also explore Evergreen’s dedication to supporting podcast hosts, ensuring financial transparency, and focusing on acquiring larger shows for growth. Don't miss Michael’s vision for the future and how Evergreen Podcasts continues to build strong relationships with its hosts.


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Transcript

Speaker 1: 0:45

Welcome back to the Money Focus Podcast. I'm your host, moses Dementor, and on this episode I'm thrilled to have Michael D'Aloia with us. He's the CEO of Evergreen Podcast. Michael has transformed Evergreen from a small startup to a global podcast network with over 20 million downloads, so he's here to share his incredible journey and his insights on building such a successful podcast network. So let's dive in. Appreciate you for joining the Money Focus podcast. I'm sure you're super busy, so taking some time out your day is hugely appreciated. The first thing I always ask my guests to do is to really just break down their career journey, their professional journey and, in your case, how did you get started in the world of podcasting? So the floor is yours.

Speaker 2: 1:33

Really dear friend of mine called me. He's like hey, I just had to reach for this job to be CEO of a podcast company. I told him I'm not the guy, but I know the guy and you're the guy. You got to call him, like right now. So I called a family office a family office that started a podcast company looking for outside management to run. It Turns out the woman who was running the family office practically a neighbor of mine lived a few blocks away. We both live near Lake Erie here in Cleveland, ohio, and we knew each other's families. We kind of like done the dance around each other but had never met. And she finally hired me and I took over CEO of Evergreen Podcast in January of 2017. Me, two interns and 10 terabytes of old radio shows that the family office had acquired and wanted to put into podcasting. So that's how we started.

Speaker 1: 2:25

In 2017, it was just you and two interns, and now I mean you've grown the company quite a bit, but what were some of the biggest challenges that you had out the gate when you took on the CEO role?

Speaker 2: 2:38

There were a few, one of which was our financial partner early on. One of which was our financial partner early on. Joan, as I was interviewing, made note that she had adopted four children, which, as you know, is God's work, and then deciding to adopt four more in Kazakhstan and Russia. So her early point was like, hey, I may not be here early on as we're getting this thing up and running, which was like we were all for and supportive and the kids are amazing. But there are days where it's like, oh, we got payroll due on Friday. We made me to draw a little bit down on the investment side. So that was just learning how to communicate. Through that early on, the early brand of Evergreen was called Front Porch People. Through that early on, the early brand of Evergreen was called Front Porch People.

Speaker 2: 3:34

Joan's early assessment was that she wanted to share the podcast, as if it were like the old front porch settings that you and I as a kid were part of. Not so much anymore. My family sat on the front porch, talked with neighbors. That's how you got all your news and your scoop and your insight into the neighborhood. So the early feeling was that podcasting could be a collaborative, community-based thing to share, which is not how we learned early on. It's not how people listen to podcasts. So we had to pivot, 12 to 14 months in, from Front Porch to Evergreen and turn it into a more contemporary podcast platform, and part of that was to switch from just doing all originals to then inviting others into the network as partners. And when we made that change from Front Porch to Evergreen, the brand had some resonance, which helped. The brand had some resonance, which helped, and then the inclusion of outside podcasts into the fold created an explosion for us in terms of content and growth, two of the early issues that I remember having to fight almost on a daily basis.

Speaker 1: 4:53

What was the podcast environment like at that time? Was it still kind of nuanced, or was it pretty much still thriving at that moment? Because you know, my show is relatively new? So I'm just curious you know how the landscape looked when you first took on this job I think, looking back, the environment was probably a bit more robust than it is today.

Speaker 2: 5:18

As with any growing industry, you start to see consolidation and the trailblazers, for whatever reason, begin to disappear and you've got upstarts taking shape and form, which is happening today. So in 2017, you had a number of large independent podcast companies Wondery Gimlet, for example which were really leading the charge with a lot of exciting new original content and making trailblazing on how much money they could raise. I mean, they both raised probably 30 million plus at that particular time. They all got acquired and they were one of many podcast like this original group of podcasting companies that got acquired, cadence 13, pineapple Street. A lot of the original founding companies have disappeared or just aren't independent anymore and they're part of these large conglomerates, which is everyone wants an exit. There's no doubt about that. We do too. There's no doubt about that, we do too. But you know, there's just the landscape has radically changed because of the initial consolidation and acquisition by large corporate companies and then, of course, in 20 and 21, you started to have, you know, ad dollars starting to fleet back out of the industry and then, obviously, the capital that was building podcasting started to remove itself too in 22 and 23. So it's a little bit different. Listen, it's still a growing industry. It is far outpacing any other media form in terms of growth. The advertising is never materialized, I think, as strong as people would have thought. So we're fighting that fight.

Speaker 2: 7:07

There's probably an over-reliance on the monthly download number as a true indicator of what listenership might've been, and there's a lack of capital. Now we see that as an opportunity. We're pretty fortunate. We've got a family office that's been behind us since the very beginning. There's a lot more trust with the executive team and the family office that we've earned over the years. And when we need our additional financing for a series of acquisitions which we've undertaken since last August we've acquired six companies. At this point We've got two more that we're negotiating through. We've acquired six companies. At this point We've got two more that we're negotiating through.

Speaker 2: 7:54

We kind of see ourselves as this alpha podcast company that's consolidating at what I would call the Jan Brady level. There's a middle tier that's kind of forgotten about. But we are all suffering from the same things Lack of working capital, lack of a full team to help propel you to the next level. You probably have one or two main shows and then just a number of laggard shows, and so you got to consolidate those significant shows together under one banner. And we've been lucky enough to do that and we're starting to get some traction in industry too. That and we're starting to get some traction in the industry too, where a number of years ago we probably weren't even on Apple or Spotify's radar. Today we have both those companies. We're in constant communication on a monthly and quarterly basis as to what new shows we've got coming out. So there's a lot more attention being paid to us in the industry because I think we've got one, we've got the team, the executive teams do it. We've got the financial wherewithal at the moment to do that.

Speaker 2: 8:51

And then three what doesn't get talked about a lot is internally. We've invested in what I would call enterprise level systems Megaphone for hosting a distribution, for example, netsuite for our financial and accounting, hubspot for our sales. Firms our size just do not have the resources and capabilities for the most part to have internally. That's something we invested early on is we want to be an enterprise-level company, so we need enterprise-level technologies to get us there. It's expensive. Not everyone has that capability. I really feel like it's going to serve us well again in 25 and 26, especially if we get these final two acquisitions done, we'll be triple the size of what we were a year ago, which is just lunacy in a lot of respects right. And we've been able to so far kind of control that beast of growth and accumulate everything internally, digest it and provide process and procedure and control critical things that you need as you're growing. Not to say growth highlights all your weaknesses for sure, and we're just very cognizant of that and do our best to manage it on a day-to-day basis. That's nice.

Speaker 1: 10:13

Yeah, I think those investments you're making, it's just going to make it easier for you to scale up, so those systems are a necessary investment, I feel, so that sounds good.

Speaker 2: 10:25

Scale is everything in this industry, and those who can scale up to 200 million downloads a year, 300, 500 million downloads, those are the groups that are going to get noticed and that's the range we want to be. We're also launching our own video on demand channel, which will have a heavy influence on on the audio side, as opposed to video, with our top 20 and then top 40 shows being placed on that and if they have a video component, like your podcast we're recording we can put that now on not only a YouTube platform, but a video platform that is on Apple TV, lg, you know, vizia all the major television platforms as a app that you can download or a channel that you can watch. We think this is going to be a monumental chance for us to grow.

Speaker 1: 11:16

What is the difference between a download and a listen?

Speaker 2: 11:20

Yeah, a download is that particular episode that's been put into a listening queue and you may or may not listen to it. A listen by IAB, because we focus on IAB compliance, as any reliable podcast network should. Our hosting distribution platform, megaphone, is IAB compliant, so we're all playing by the same rules to our advertisers, which is important. But, listener, it's some fraction of time that the show is then being listened to or being played, of time that the show is then being listened to or being played. You know listening is a hard thing to monitor and to track. But play, I mean it probably should be better to be defined as a play for a certain period of time than counts as a listen. So there are different. And then to add a layer of complexity to it. We talk about impressions, a layer of complexity to it. We talk about impressions, and impressions is simply the number of ads that are in that episode that have worked their way through that listen. So let's say, if you listen for five minutes to a podcast, that's probably going to count as a listen according to IAB statistics and you're probably going to have at least two ads in that five minutes, the initial five minutes. We like to structure our shows with two pre-roll ads, two mids and a post, and you know so, in five minutes you're probably going to get those two pre-roll ads y'all listen to and heard. So that would be two impressions on that particular show One listen, two impressions, one download. Right? So you know it's crazy and the podcasting industry is so far behind technology in terms of how to really define all of those.

Speaker 2: 13:05

And now we're talking about engagement, which is yet another statistic, and engagement is the percentage of how long they listen to that episode, and engagement is the percentage of how long they listen to that episode. A lot of our children's shows you'll see an engagement of like 150, 200 percent, which is the kid is listening to that podcast and then going back and listening to it again Over and over. Exactly Right, whereas a true crime podcast might have a 75 or 80% engagement. They're listening to it and then, for some reason, maybe they had to leave for work or go to dinner or whatever the case may be, so they stopped listening. Hopefully they'll come back and finish it up. So yeah, there's a lot of statistics out there, a lot of definitions. The industry I know is working really hard through, like the Podcast Academy, iab, to have some reliable statistics, because the more reliable statistics and better definitions you have of what a download, listen, play would mean, it is only going to help you sell to the advertisers Makes sense.

Speaker 1: 14:07

So for someone you know listening, that you know has a podcast and you know would love to join the network, like yours, talk to us about how you actually identify potential podcasts to join the network and if there is a particular metrics that you're looking for that helps you make that decision. To say, hey, Moses, come on and join the team, so talk us through that. We vet the same way, but by come on and join the team.

Speaker 2: 14:33

So talk us through that. We vet the same way, but by using different measurements based upon genre. So, for example, a business podcast because business and sports, believe it or not, are two of our lower genre counts in terms of monthly downloads it's probably a little easier to get onto the network relative to our music, history, health and wellness podcasts. Some of our larger categories true crime those shows at this point in time are probably going to have to have 25,000 downloads a minimum in those categories to get onto the network, whereas business, where 1,500 to 2,500 downloads a month, would probably get you onto the network, whereas business, where 1,500 to 2,500 downloads a month, would probably get you onto the network. Now, every network is different and every category is different. There are some networks that if you're not doing 100,000, probably won't get on. We're a little smaller than most of the larger networks so we can take risks still and we built the network on that 10,000 a month download show to 100,000. The reason for many years we capped it at 100,000 was the industry. For many, many years, if you were starting to hit six figures a month in downloads, there were networks that were pretty much going to promise you a minimum guarantee on that show. So they were paying the show upfront for future revenue streams and we didn't play that game. And to this day we only have two minimum guarantees in-house. And while those shows have done well for us, it's at a moment where we're kind of reconsidering what that strategy means for us. When the last sort of downturn in the advertising market took shape in 21 and 22, those minimum guarantees disappeared because the networks couldn't afford to pay them anymore and they were starting to get pretty rich. Networks couldn't afford to pay them anymore and they were starting to get pretty rich. There's a difference between a show like Theo Vaughn and Serial. You can afford to do a minimum guarantee on those types of shows because their audiences are so huge, whereas 100,000 to 300,000 show a month which is that's a big podcast Don't get me wrong it's in the top 3% it probably won't make $300,000, $400,000 a year. So you just got to manage your portfolio correctly. So we're taking advantage too of like.

Speaker 2: 17:06

All these minimum guarantees are starting to fall off. The bigger shows are back out in the marketplace. They're looking for a more stable place to be with more guaranteed revenue stream not in terms of. I'm going to promise you and deliver that money, but we're going to go out and try and find it for you.

Speaker 2: 17:24

So the minimum guarantee was the bane of the industry for a few years and caused a lot of friction. To the point, one of the bigger networks, a network called Cast, which we had almost invested in and we really liked this particular network. They just essentially disappeared off the face of the earth because they had promised so much in guarantees they couldn't pay it with their advertising streams that were coming in, and that was one of many networks that suffered through the minimum guarantee fallout. So your question is coming at a really unique time, because groups like ours can go higher up in terms of the shows with monthly downloads. Ultimately, the thing that we look at are probably monthly downloads and your YouTube streams, and if we think we can monetize those two, then you've got a great chance of being on the network Again, based upon genre.

Speaker 1: 18:28

Taking notes and taking notes. I appreciate it, being that you brought up YouTube right. So I know traditional podcasts. You know it started off as an audio only media. Do you recommend that everyone have a video version of their podcast as well, or does it kind of depend? You know what's your take on that. We do.

Speaker 2: 18:51

We highly stress that. In fact, if you're going to start a podcast, we always say start with you're using Squadcast, for example. So we say jump on Squadcast or Riverside, record both audio and video and distribute both. Youtube is the second largest engine. It's the second largest podcast platform in terms of listens, so you always need to be where your listeners are, and so we highly suggest getting your account on YouTube. I know it's a hassle, because if you have a maccom email account, you have to start a Gmail account to log on to YouTube, and it's a little quirky, I get it, but you need to be on there and you need to have your content there.

Speaker 2: 19:40

We do edit the audio and video sides differently. So for the audio, for example, we're taking out the ahs and ums and likes. Dramatic pauses tend to disappear, where on video it's a little bit more natural to hear those types of elongations and interruptions than in the audio side, so we tend to leave those in on the video side. So they're just cut and edited a little differently. But, yes, we really stress that you need both yeah.

Speaker 1: 20:41

So, especially since you said as far as, like, uh, vetting new shows, you look at both downloads and also youtube stripes, so that's yeah, so that makes a lot of sense. How do you ensure, like, the quality of your shows? You know, um, you, you know, I say first I jump on, I got to, you know, maybe I start kicking my feet up once I get into your network. It's like I made it. So what are some strategies you do to make sure that, hey, you know the quality of the shows are in play for many years to come?

Speaker 2: 21:16

We're a little unique than most that we actually have a partner relations department, and so we've got a team that working with you, generally quarterly, but it could you know, the larger the show, obviously it's going to probably be a more monthly connection. And we are constantly working with you on positioning, promotion, advertising rates, social media, because once you join our network, we're also a little unique in that we essentially give you a whole social media kit of banners that you can put in Facebook, twitter, linkedin, et cetera, et cetera. But the whole point is that we've got this team working with you, and one of the documents that we share with everybody is what we're looking for in terms of sound quality equipment that you should use best practices. Really, we kind of look at ourselves as like this 1960s jazz record label where we're all about the artist. The trust that you've put into us to join our network is very meaningful to us. We're Midwesterners at heart, we're hard workers. Our word means everything philosophy. So if you come onto the network, there's a whole slate of things that we are providing you as a participant in there, and so what we really want is for you to produce the best show possible. We'll do everything that we can to make that happen. Now, we're not doing your production. That's part of the process. We are like Jerry Maguire you are the show right, you're the talent behind the show. You need to produce the best show possible. We'll handle everything else hosting, distribution. If you need help getting guests on the show, if you need support on marketing sales, all that's included in our partnership arrangement. And then, obviously, we take a fee out of the ad revenues, sponsorship revenues, and then we pay you the difference. So, yeah, we do have standards and our partnership team is out there on the front lines fighting for that all the time. I would say, out of the seven and a half years we've been on the network, we've lost five shows. Out of the 325, 330 we've got on the network, five have left, which I think speaks to how seriously we do take you know our interaction with our hosts because they are very important to us.

Speaker 2: 23:51

We do a quarterly Partner Palooza where they can get on. We do a webinar, generally with three to five different topics. We are sending out a monthly newsletter. You get weekly reports, monthly reports from us. You have access.

Speaker 2: 24:09

Another unusual thing about us is you get to see your monthly financial ledger. It's a Google Sheet doc that we share with everybody. So you're only seeing your show, but you are seeing what we've sold, what we've collected, what we haven't collected. And that's a key thing, because a lot of shows we trust people, right, so they're going to go out and sell, but you really don't know what's been sold.

Speaker 2: 24:35

On a lot of other networks they tend to get a check. We actually do an ACH, so it's not even a check anymore. We're like direct depositing, so your master ledger should match the deposits that we're making on your behalf. In the past, too, we've also, if people wanted us to, we've controlled their bank account. We're managing the financial operations, that part of the business we're trying to get out of. We've got a few shows that will probably unwind by the end of the year that we do that for, but really for the most part, we have another enterprise platform called Gusto. So your monthly financial report we're telling you how much we're going to pay. You get a gusto receipt that's saying we're depositing this amount on this date. We typically pay out which is a little different from norm 30 days after cash collected on everything.

Speaker 2: 25:32

So, youtube, if you have a Patreon account supporting cast account, merch, whether you're on Evergreen or not, there are certain things you should be asking your network for, and one is financial clarity. You're the star, we're not the star. You're the star. You should be getting the money that is promised, or at least sold to you, right, based upon the contract that you have in place with your network provider. It's very important to review that contract and to have financial clarity in what's being made, because you hear it all the time in the record industry, you hear it in podcasting Theo Vaughn. He was with another network prior to going to I think he's with the Roost now, prior to going to the I think he's with the Roost now. Prior to going to the Roost, his provider, he was out $400,000 or $500,000 that he wasn't paid. That's a significant amount of money and Theo Vaughn's one of the few that could actually command those types of rates. But to not have it being paid is troubling.

Speaker 1: 26:36

Great information. What would you say? I know you mentioned a lot about some pending acquisitions for the company and that you're looking to be potentially triple the size you were a year ago. Are there any other future plans or goals for the company that you can talk to us about?

Speaker 2: 26:55

Yeah, we're going to continue to acquire companies that make sense for us and one that bring a significant stream of revenue, and that's obviously important and larger shows, because we're starting to tilt towards. We need bigger shows to kind of fill out the roster. We have 320-some shows on the roster. We have 320, some shows on the network. Our top 40 equate to 72% of our downloads and 80% of our revenue streams. So, by the very nature where we are in our evolutionary process of growth, we need bigger shows and we've been acquiring bigger shows too.

Speaker 2: 27:40

On our bs that we recently acquired disturbed and uh, which was out at the vegas, and then another one in uk called the rr show. Disturbed last month broke over a half a million downloads. I mean, that's a that's a huge show and we want more of that. And it's easier too. They're actually cheaper to buy an ongoing show like that with downloads as opposed to creating original content. It's very challenging to do original content right now, especially like dramas and large-scale documentaries, like serial. It's expensive and most of them don't have the payback that one would expect.

Speaker 1: 28:22

Yeah, no that's half a million downloads here. Yeah, that's a little humbling right there.

Speaker 2: 28:30

You got to grow into it right. I mean, the average download of a show is 140. So if you're over 140, you're in the top 50% of the marketplace and the rare shows are doing half a million. Half a million is probably your top 1%. I mean it's a big show. Obviously we want it to get bigger and we're working on different types of campaigns.

Speaker 2: 28:53

There are campaigns to help with growth. We use two particular platforms for audience growth. One is called Rockable and the other one is called Trailergram and essentially they create and they're both of different cost structures. So your Rockable is more your premium, $1,000-plus minimums to buy into Rockable campaigns. Trailergram you can start at $500,000 plus minimums to buy into rockable campaigns. Trailergram, you can start at $500, which is great, and essentially they're digital ad campaigns directed towards the demo that you define for either of those services. So, on a business show, probably looking for degreed white collar making over $75,000.

Speaker 2: 29:38

I'm just throwing stuff out for a business type podcast and we would find those demographics in TrailerGram. Click on those and you would start seeing the show on the Wall Street Journal, new York Times, usa Today. If you click on that banner, I'd like. Oh, I see this podcast is on the 2024 election, for example. You click on it Instead of going to a website, it starts playing right then and there, and that's what you want. You want to capture the attention of the listener as quickly as possible. I don't want to click through two or three places to start listening. So TrailerGram and Rockable both allow you to create really eye-catching digital ads that, once you click on it, it starts playing right then and there. They're IAB compliant, which is very important and can dramatically change the audience growth of a show.

Speaker 2: 30:38

The problem with both of these and they're working from this issue is it's like a Marvel movie opening. You get this huge bulk of new listens, but very few actually stick around and subscribe right. So what's the next tool that's going to help with post-listen subscription? That's kind of like the you know the golden, the gold that you're kind of reaching for. That doesn't exist quite yet. And but both tools both rockable and trailer gram super effective.

Speaker 2: 31:09

But there's other tried and true measures. You know you, hosting on other shows is probably the best way to get the show out. Consistency keep with your cadence. We call it a cadence. If you're doing a show every week, make sure that show gets out every week. Now if people take vacations or sometimes they just don't want to do a show, I get it, but make sure that RSS feed is filled with the best of episode or something, or even another show. There are services that will sell out your RSS feed to another episode of a like-minded show and you get paid for that. So you know, we're always looking at different ways to position the show for growth.

Speaker 1: 31:50

Well, I mean, I was going to ask you for some best practices. You kind of broke that down for us for sure. You know I took note of those two names for sure, and I'm sure the folks that are listening will as well. So why don't you just close this out with any final advice that you might have and also how we can actually reach out to you if we want to learn more about Evergreen Podcast? The floor is yours.

Speaker 2: 32:14

Oh, I appreciate that I never come with the ask, but I will say this we are always on the search for good shows and good hosts. Our biggest issue right now is our top 40 or 50 are just beasts relative to the rest of the portfolio. Is there like a tiered system like you might have in English soccer where you got League One, league Two, champions and then Premier? We are thinking about that because I don't want to lose the downloads or the show to another network. But maybe it's a tiered network approach. We will talk to anybody, anytime, anyplace, anywhere. Again, and I hope people do reach out, even if it's not a fit for us. We'll find the right place for you, we'll help you define some strategies for growth and we're happy to do that.

Speaker 1: 33:06

Perfect. Appreciate you giving that great advice and I'll go ahead and include all your contact information in the show notes. So I just want to say thank you so much for joining the show. Really appreciate you.

Speaker 2: 33:17

It's been an absolute pleasure, and now that I know you've got some connections to Cleveland, you've got to get up here so we can meet face to face. I'll give you a tour, absolutely.

Speaker 1: 33:27

Thank you, appreciate it, all right you.