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Illustration: Aïda Amer/Axios

Substack is funding the launch of a new podcast network called Booksmart Studios, executives tell Axios. It's the newsletter company's first major financial investment in podcasting.

Why it matters: Substack sees the venture as a way to deepen its commitment to podcast publishing on its platform and as a case study for what’s possible for independent podcast networks.

  • "We’re in the very early days of podcasting on Substack, but some podcasts are already making hundreds of thousands of dollars a year through the platform," Substack co-founder Hamish McKenzie tells Axios.
  • "The Substack model provides a new and exciting avenue for podcasters and writers who want to break out of old constraints — including to build a business or portfolio of media offerings, like Booksmart is doing," he adds.

Details: The new network is being launched by two seasoned public radio journalists: Michael Vuolo, former producer of WNYC’s "On The Media," and Matthew Schwartz, a Murrow Award-winner and NPR contributor.

  • It will be home for five new podcasts to start, including offerings from media veterans John McWhorter and Bob Garfield, among others. (Garfield was fired from New York Public Radio in May for violating its anti-bullying policy.)
  • The first three shows, "Banished" with Amna Khalid, "Lexicon Valley" with John McWhorter and "Bully Pulpit" with Bob Garfield, are launching in July. "The Direction is Sound," hosted by Chris Mandra, and "Unprecedented," hosted by Vuolo and Schwartz, will premiere later this summer.

How it works: Vuolo and Schwartz have been given a six-figure advance from Substack to launch the service. The advance is enough to cover the salaries of the two full-time co-founders and their five part-time producers and hosts.

  • Shows will be available to users anywhere they get their podcasts, in addition to a public RSS feed. Subscribers will get access to extra content, like full-length interviews.
  • Subscribers can chose to pay $7 monthly, $70 annually or $200 annually to be a "founding member." Founding members get even more additional perks, like merchandise and custom video and voice messages.

Like newsletters, Substack will take a 10% cut of podcast revenues once its advance payment expires after the first year. Each advance payment offer is individually tailored.

  • "With the subscription model, you don’t need millions of listeners to make a podcast sustainable," McKenzie says.
  • Vuolo and Schwartz agree. "There's a certain number we've got to hit," Schwartz says. "We've figured out. It's in the thousands."
  • So far, several thousand people have already signed up to be free subscribers and several hundred have already signed up as paid subscribers, Vuolo says.

The big picture: Podcasters have long used Substack's platform. What's new is the company's strategic investment in growing podcast communities.

  • "We’ve found that many writers want to at least try podcasting or wish to supplement their written material with audio," McKenzie says.
  • Substack today has an audio tool that allows publishers to record audio directly into their files on Substack, or upload an MP3.
  • Publishers can decide if the episode is free for anyone or only available for paid subscribers. Subscribers can add podcast feeds to their podcast app of choice, where the free and subscriber-only episodes appear in a unified feed.
  • It’s free to host and distribute podcasts via Substack. Substack users can send episodes out by email, the web, and into all the major podcast players.
  • "RSS and email are two protocols that give writers and readers full control of their media experiences — they’re not mediated by any one social media platform and aren’t subject to sorting by engagement-based algorithms," McKenzie says.

Some examples of podcast-first Substacks include Krystal Ball & Kyle Kulinski’s Krystal Kyle & Friends; Time to Say Goodbye by Jay Caspian Kang, Tammy Kim, and Andy Liu; and Matt Taibbi and Katie Halper’s Useful Idiots.

What to watch: McKenzie says Substack "will be continuing to make significant investments" in bringing publishers of all types to Substack over the coming year. "The economics of this model are attractive," he notes.

Go deeper

Ex-Morning Brew employees launching Substack competitor

Jake Hurd (from left), Tyler Denk and Benjamin Hargett. Photo: Courtesy of beehiiv

A group of former Morning Brew employees says they've raised a seed round to launch a new newsletter platform called beehiiv.

Why it matters: The group enters a crowded field. Facebook and Twitter have already launched their Substack rivals. Google is reportedly experimenting with newsletters as well.

Updated 3 hours ago - World

U.S. airstrike kills senior al-Qaeda leader in Syria, DOD says

A displacement camp near the village of Qah in Syria's northwestern Idlib province. Photo: Ahmad Al-Atrash/AFP via Getty Images

A U.S. airstrike in northwest Syria on Friday killed senior al-Qaeda leader Abdul Hamid al-Matar, U.S. Central Command said in a statement.

Why it matters: Syria serves as a "safe haven" for the extremist group to plan external operations, according to U.S. Army Maj. John Rigsbee.

Updated 8 hours ago - Politics & Policy

Giuliani associate Lev Parnas convicted of campaign finance crimes

Lev Parnas, a former associate of then-President Donald Trump’s personal lawyer Rudy Giuliani. Photo: Stefani Reynolds/Bloomberg via Getty Images

Florida businessman Lev Parnas was convicted Friday on charges of conspiracy to make foreign contributions to political campaigns, according to multiple outlets.

Why it matters: Prosecutors said Parnas, then an associate of former President Donald Trump's personal lawyer Rudy Giuliani, funneled over $150,000 from a Russian businessman into U.S. campaigns as part of an effort to land licenses in the U.S.'s legal cannabis industry.