The comedy podcast network Headgum earlier this year launched Headgum Studios, a full-service podcast development and production division that will work with comic talent looking to launch a podcast. It will now have more financial resources to expand that mission. It has just picked up an investment from Union Square Ventures. “We believe that Headgum can both be a meaningfully large business and make all of our lives meaningfully better,” USV’s Hanel Baveia said in the announcement. “Podcasts are big, and more people than ever before are listening.”
Headgum’s genesis was the success of the podcast If I Were You, which co-hosts Jake Hurwitz and Amir Blumenfeld leveraged into the creation of their company five years ago. They built a collection of comedy shows, and Headgum says its podcast network averaged 10 million monthly listens in 2019. Today Headgum has become three separate units. The first is Headgum Studios, the comedy content production company that owns and operates original content on the Headgum network. The other piece is the Gumball marketplace, which allows brands to buy host-read ads directly from podcasters.
Baveia said those components have created a “self-sustaining model” that has paved the way for Headgum to become profitable during the past few years. “This powerful three-part structure — owned content, distributed content network, ad marketplace — creates meaningful network effects,” she wrote. “More unique content makes the platform more valuable to listeners, and user growth in turn boosts desirability for creators to join. This is true for most content networks. For Headgum, there is an added network effect between creators and brands. Better shows lead to cross-pollinated ad audiences, which generate better ad opportunities within the network.” Baveia said that relying on a free podcast model is the best way to distribute Headgum’s content at scale while relying on host-read ads rather than putting shows behind subscriber paywalls. “We believe these effects, in tandem, are a formidable mechanism for building a trusted brand at scale,” she said in the blog post.
The size of USV’s investment in Headgum was not announced, but it is said to be about $2 million. USV has previously invested in other podcast and audio companies, including TargetSpot, SoundCloud and Meet Cute, which is building a portfolio of audio rom-coms.
With studios in Los Angeles and Brooklyn, Headgum, like a lot of podcasters, pivoted to fully remote operations during the COVID-19 lockdown. Baveia said since USV made its investment, the Headgum team has learned to produce content remotely during a time when the largest media studios are struggling to create TV shows and movies. “We think this operational DNA will continue to benefit the Headgum team for years to come,” she said.