Podango Shutters: What’s the Industry Effect?

I’m a bit late to the game on this one due to my blogging and Internet outage, but as you may be aware, well known podcasting network Podango has shuttered the site as of this evening.

Doug Smith, Podango’s President, sent out an email this morning reminding their producers and station directors of the need to back up their work as a result of the shuttering, but provided a bit of a light at the end of the tunnel for fans of the service:

Just last week we found out that a planned investment was delayed putting us in a financial situation where we will need to restructure through various strategic opportunities that are evolving. We expect at some point within the next month or so to relaunch under a different structure and possibly with a new owner.

I’ve actually spent a bit of time on the phone with Lee Gibbons, Podango’s CEO this weekend as well as others in the industry to get more background and information regarding the occurrence.  As it has been reported elsewhere, the closing of the network comes as a result of the tightening economy and the difficulty of content aggregators and producers to find sponsorship.

In speaking with Lee, I was able to clear up a little bit of the picture as to what the company is fated for. As you may remember, back in March, Podango hit the pages of Valleywag for allegedly not being able to pay some of their employees. I had received a similar tip from an ex-employee, who detailed a situation for Podango where they were looking to close an investment round, and as such were not able to pay employees. Gibbons, at the time, told me that the situation was overblown to a certain extent, and while they were looking for additional funding but denied being behind on paying their employees.

Lee also gave me some clues as to the eventual future for Podango.  Doug Smith is currently heading up the acquisition plans, but given the variety of asset types the company has in it’s arsenal, it’s very likely that they’ll be parted out to a number of different new organizations.

Podango Studios, which Pete Cashmore mentioned in October as being in danger of foreclosure due to an illness of the studio’s president, is being sold off for the raw equipment assets. The GigaVox ad serving engine is another asset that will be able to be sold separately or as a part of the integrated podcast serving mechanism they have built on AWS servers.

The ad sales team and the support staff are currently running in skeleton crew mode, but are another asset to the company that may seek other employment independently or could be sold as a unit, depending on how long the sale process drags out.

The bottom line is that Podango will probably not survive under the name Podango, but it’s assets (including the collection of producers and podcasts) will very likely live on under a different banner, though no one at this point is saying where (likely because it’s too early to tell).

What is the Impact on the Business of Podcasting?

My friend Jeffr0 expressed grave concern over Podango’s closure last week, and asked whether or his primary podcasting platform, TalkShoe, might be the next to go. I talked to Dave Nelson, TalkShoe’s CEO, this afternoon to address some of those concerns, which he allayed rather handily.

As I reported back in May, TalkShoe was rumored to have been seeking $5 million in new funding, which they apparently received November 12th (Dave confirmed the funding, not the amount, saying only that it was “substantial”).

Dave also mentioned that the company itself is going “great guns,” having tripled the amount of volume of production and engagement on the site, rising from 4 million minutes of audio produced last year to 12 million this year.

I asked him about his thoughts on Podango, specifically, since they too were big and rapidly growing, though not the biggest by any means, podcast hosting solution.

“I hate to see anyone fall out in this business,” said Nelson. “It is typical in any market, though, to see some fall out with and some go on to be leaders.  What happened here is fairly typical for what is still a new and exciting market.”

I spoke to Rob Walch from LibSyn/The Wizzard Network, who echoed these sentiments. Walch mentioned several other minor players in the business who had gone by the wayside in 2008, and echoed a lot of Dave Nelson’s sentiments.

“It’s a really tough environment,” said Walch. “There are a lot of good companies out there in normal times would make it but aren’t because of the economy and the public markets.”

Personally, I feel a bit of pain at the loss of Podango. They were one of the very early players, and one that I felt really got the business of podcasting, but due to being highly leveraged and running up against a tough economy, weren’t able to outlast the downturn.

I’ve met and worked with just about everyone on staff at Podango, from the developers on up to the executives, and I can personally attest to their solid business practices and generally amicable demeanor. It’s a shame that they’re going through such a tough time, but from one person suffering through unemployment to another, I say to them what has been said to me a few dozen times: “You guys are rockstars, you’ll all land on your feet.”