PodX CEO Patrick Svensk on Building a Global Podcast Federation

Although the transcription is largely accurate, in some cases it may be incomplete or inaccurate due to inaudible passages or transcription software errors.

Jeff Umbro: Today on Podcast Perspectives, we are joined by Patrick Svensk, CEO of PodX, a company that's rapidly becoming a global powerhouse in podcasting.

Patrick Svensk: Podcast entrepreneurs are more open to ideas and cross border sharing than TV and film.

Jeff Umbro: Is there a show or a creator in your portfolio that you're especially excited about right now?

Patrick Svensk: I am very excited about the future cooperation between our US studio Lemonada and our UK companies operating under Platform Media. I think there's gonna be some great cooperation coming out of that soon.

Jeff Umbro: We'll explore what it means to be content first and the future of podcast monetization and IP ownership.

Welcome to the show, Patrick.

Patrick Svensk: Thanks a lot. Thanks for having me.

Jeff Umbro: I thought that it would be best if we just started by me asking you what is PodX?

Patrick Svensk: PodX is, from the beginning, a conglomerate, and now maybe a federation of independent podcast creators, producers, monetizers, who have come together in a collective to make the world a little bit better and to make us stronger and eventually make more money.

Jeff Umbro: How many companies are in the collective?

Patrick Svensk: We have acquired 13 companies over just under three years time.

We have, I think, eight or nine reporting units in eight countries now or something? Yeah.

Jeff Umbro: Where does the money come from for this? Are you guys essentially like a private equity company? Is it coming from somewhere else? Is it running just based on the, the operating capital of the businesses themselves?

Patrick Svensk: The companies together are making money, so we are financing our own future operations, whereas the acquisitions have come from a Swedish company. It's a family office called Qarlbo. They are a long-term investor. It's founded by a guy called Conni Jonsson who founded and is still the chairman of a, of a private equity company called EQT.

And I think Conni would, would definitely underline that they are not a private equity company and we're not private equity owned because that means that they have the flip us or, you know, make an exit or something.

And they would like to be a large shareholder for a very long time. But they have accepted the fact that we have. So many entrepreneurs who are also owning a part of the group. So therefore, we will probably make some kind of, you know, exit like an IPO stock listing in the future. Not because Qarlbo needs to get their money back, but because the entrepreneurs needs to make an exit.

Jeff Umbro: A pragmatic decision.

Patrick Svensk: I think so, yeah.

Jeff Umbro: I agree. I, I think it's really interesting and clever what you guys are doing, and I'm also really curious why podcasting? Like, why is that the direction that they've decided to go in?

Patrick Svensk: I think what the entertainment leg of Qarlbo, they are firm believers in intellectual property, in music, in entertainment, and they believe that one can through various means and channels. Really increased the value and long-term value of the IP by being smart and with a lot of creative and smart people around.

Pophouse is also is co-owned, Qarlbo owns 75%, and Björn Ulvaeus from ABBA, the pretty famous Swedish music group, he owns 25%. It basically comes from the idea what Björn created with ABBA Music when they did the films and the, they did the movies and they've done the, the, the stage shows and all of that. Basically you can get an, a music library to live forever, and that's what they're gonna create do with I, I assume, KISS and, and all the other artists, catalogs that they're acquiring.

And then we came along and we had an idea that we should build strong IP over time and media properties also in the audio space, but focus on a strong growing podcast space. They liked what they saw, and they gave us both money and freedom to, to fulfill our dreams. I've been a CEO or a chairman for 31 years and I never worked for better people than Qarlbo and Conni.

So yeah, I'm not ending my career here, but it's a great way of, you know, great place to be.

Jeff Umbro: I have to ask, why audio? Because you must have done your research and understood that the market economies are just vastly different from television, film, video games, and everything else. What drove you to audio?

Patrick Svensk: An old colleague, friend, and now also sort of a colleague here in, in PodX Group, a Danish guy lost to Guatemala in Latin America. He's called Simon Junker. And he called me and said, Patrick, are you seeing what's going on in in the podcast industry? You should do this. This is what you did in television.

And you started this 20, you know, 20 years, years ago. And so I took his advice, I started it. I saw the tremendous growth. I saw the, the opportunity. And this is I think, the key trigger to this. I was a broadcaster or publisher in the nineties. That was fun and all great and so on, and we commissioned shows from others.

Then I was building groups of production companies for TV and film, but in TV mostly we just delivered, worked for higher work to broadcasters or other platforms. And film, we owned some equity of it, but we were dependent on other people's financing.

What I saw here was the ability to combine the great, the original ideas and the storytelling and the, and the knowledge of the knowhow of producing in a good way with great quality, with the possibility of becoming a publisher on your own and monetize this. So we picked up, you know, picked up, but we invited people, entrepreneurs who, who could tell great stories regardless if they had their own monetization, if they were just work for hire or their own stuff and we, we invited them and wanted them to be part of our group. And now we're slowly but gradually moving towards becoming to a greater extent, not to 100%, but to a greater extent, a publisher on our own with strong monetization opportunities and still strong in originating and, and producing. So, you know, I think it was combining those two roles, the publisher as a broadcaster and the producer in, in TV and film, and combining that into one group.

Jeff Umbro: And so are you noticing that there is any kind of information gap between what you've learned in your other entertainment industry roles versus in the podcasting space?

And what I mean specifically by that is you have acquired 13 companies. I imagine that you've spoken to 10 times that, that you decided not to acquire.

Are there areas where audio publishers seem to be lacking as compared to other industries? Maybe it's like their business knowhow or their operational expertise?

Patrick Svensk: No, but I think, you know, like so many other aspiring industries, if you will will buy financial markets, we saw a little hype or maybe even a little bubble a couple of years ago in, in the audio market and the podcast market. And I think this could sound like, oh, this old fart coming from TV and film kind of comment, but it, a lot of people were talking about, yeah, we're creating this ip, it's gonna then be turned into first films, and then I video games and blah, blah, blah. Yeah.

You know, it's one in a million, if that. So you can't build a, you can't build a company on becoming successful in another industry. You have to be successful in your industry, and if you're not passionate enough, if you love what you do, and telling stories, audio only. Not audio first, audio only. You have to, you have to be able to make money in, in audio only, and you have to be able to win prizes. And the people are passionate and proud of what they do. Then perhaps we can also make some money in, you know, other industries or in tv, film, video games, whatever it is. But that's icing on the cake.

That's not the core of this business. I, so I'm just, I think everybody, you know, had their best intentions, but I think you have to start with doing what you love and make doing it great. And then the, the rest will come. I, I would be happy to see one of our podcasts ideas turning into TV series or film, but it's not, that's not why we are gonna be successful or famous.

We're gonna be because we are the greatest storytellers in in audio.

Jeff Umbro: Thank you for saying that, by the way, long overdue from a lot. A lot of executives should be saying exactly what you just did. So I, I'm, I'm very glad to hear that.

So, PodX has acquired 13 companies from eight countries. Why in, and this is a funny thing coming from me who lives in the US, but why international first? Like, why did you decide to start outside of the US? The US is the largest market in podcasting. So like, you know, a lot of folks might think that's the obvious first place.

Patrick Svensk: I understand that, but it's, it's twofold. One is that. We are a Swedish company from birth. We are, we have originated outta Sweden as quite a few other audio, successful audio companies we might know of. For instance, Acast, Spotify, Epidemic Sound, who happens to be friends of mine from Zodiac who built Epidemic. And, and Zach, one of the founders, is also my chairman and business partner.

Jeff Umbro: We use Epidemic on this show.

Patrick Svensk: Oh, great. I'm happy to hear that.

I don't think it's bad. And I mean, I sometimes say when I, I started saying that in the, my mid nineties when I traveled around Eastern Europe, trying to, to launch or, or get licenses to launch new commercial independent TV stations.

I, it was a, you know, being Swedish, we came in as the neutral Swedes. Admittedly, we were the cowards of course, in the first and second World War and not so, but it's nice to be, you know, cold neutral, but we don't have it. We're like the manatees in Florida. We have no natural underneath, so we, we can come in wherever and people like us.

I, you know, again, I think that, you know, maybe bullshit, but it's, I experience it's, it's quite okay. It's quite all right to be Swedish and we're also early adopters and maybe that's why some kind of great companies have come outta Sweden because we see the business opportunities. We're also small countries, so it's hard to make money only in small country like Sweden, so you have to go abroad.

We're quite international. We quite speak quite decent English. But then why didn't we come then straight from Stockholm to New York or LA or, or Minneapolis for that sake matter, or New Hampshire is where you are. That would be a most personal questions. I've seen, seen thousands of European cocky media executives going to the US, lose shitloads of money, ended up in a, in a graveyard somewhere and, and totally forgotten about.

So that was not was going to happen with us either. We wanted to see if, if our model works, if we could do acquisitions, if we could get that model to work where we try to put these companies together to get these kind of synergies and effects of positive effects for being together. And when we noticed that we have such a strong, or we, we realized that we have such a strong platform in the UK that we could actually look at doing sort of exports from Europe, UK, into US, why not try to find a complementing platform? And that's when we now just recently acquired Lemonada, We would've failed if we came directly

to the us.

Jeff Umbro: I think that's smart and I think that's something we've seen a lot of folks do as, as you mentioned. You know, Acast is, is hugely successful today, but I remember when they first launched in the US. I think the US still may be one of their smaller markets.

Patrick Svensk: It is.

Jeff Umbro: How do you manage having so many different companies with so many different focuses under one umbrella?

You mentioned there's a lot of synergies there between Lemonada, Platform, and, and everybody else, but I'm sure there's also a lot of tension between like who's focused on what and when and how, and how much money they get.

Patrick Svensk: Maybe this is a little bit about our heritage of being Swedish also, that we, you know, we don't come in. And tell you how to run your business, how to produce your shows, how to sell and monetize them. We don't ask you to wear these clothes on the cap with a big yellow M on them and do the burgers exactly according to this secret recipe.

We come in and offer you to take part of this collective where we think you can add a lot to the rest of us. The pipeline that we're building between these companies, that you have one obligation, that is to fill the pipeline with great ideas. It could be business ideas or formats or IP, whatever, and then you have the exclusive rights when you're part of this system to tap this pipeline.

If you don't tap it, it's up to you. Then you might not need anything but you, the obligation is that you fill it with what you have and contribute, but you still should operate in many ways the way you have always done, because that's what made you successful. And hopefully we can get that, you know, learning from that.

Having said that, of course we need to be now where we're becoming quite big, we need to be much better in finding the synergies, making them sustainable. 'cause we all know how it is. We, you know, we, you work in any kind of company, go off to conference and everybody thinks, ah, this is great. And you have these breakouts and the workshops, oh wow, this was such a great, and all those things we said we were gonna do.

And then you go back to your respective countries and all that forgotten because you got all the shit on the list that you have to do next day. So I think that is the most important task for, for us as a group now, is to divide these responsibilities between ourselves, all of us. It's not, Hi we're from headquarters, we're here to help you, bullshit, but it's like all of us have to really chip in with what we're good at and then trying to push the whole group forward in certain areas.

Jeff Umbro: Do you have any examples you can share of, of like how you've done that successfully so far.

Patrick Svensk: No. I don't think we have done it extremely successful yet, but I can tell you about a few examples that we are doing at the moment. I just got a a video, audio video clip from a fiction show that our UK company Goldhawk is producing in Finland. We're doing it both in Finnish this very, very tiny language, and in English, and it's gonna be a production both for the Finnish audience and for a UK audience that's talk about synergies.

Now, this is of course not a massive show, but it's our biggest symbolic output I think right now from how, this would never have happened if we weren't part of this group. And we've, you know, currently also go back to Finland again. It is our smallest market. It's our, the smallest language there is in, in our group. But, you know, they're producing another UK format currentlyin the marketplace. And so stuff like that.

So despite what I was saying before about shows not traveling, maybe that's a myth. And despite me saying that you've gotta, you know, build it on audio only. Yes, sure. But if you are part of a group like this, you will eventually get, get things moving across the borders and that will save you time, energy, the people you work with, the co-producers you have, your partners, your advertisers.

You always have a higher degree of certainty. And, and you know, when you do that, you have created this hit before. You know how to do it, you could do it again. So those kind of things I think is great.

We have another format. I can't say which one, but it's a, it's a sports format that we are looking to setting up the true franchise in one other large language area. And we are there. We are, I think we are getting help and support and cooperating everything from casting to sponsorship sales to post-production and so on. Those are the kind of elements that I think will

be successful.

Jeff Umbro: You mentioned a smaller show in Finnish as your template here, but I think that's so important is to build systems for how you can do this again in the future. And it's frankly even better to do it on a smaller property. And then you work out the kinks for when you wanna do it on a larger

scale.

Patrick Svensk: What we haven't done yet is properly launching franchises in other markets, or call it consumer labels or channels, but maybe, I mean, Lemonada is getting more and more of a household name, a brand, and so is Listen, in the UK. How could we position those differently and how could we work those, what fits on the deaf umbrella? How does this sound with a British accent instead of an American accent? You know, there's strategic work to be done there as well.

And I think then that's where you create the real synergies and being able to cross sale and bring in a sponsor for the whole English audience, English language audience. That's a, that's a much bigger thing than just doing it locally.

Jeff Umbro: I hope you guys solve that 'cause.

Patrick Svensk: We'll see.

Jeff Umbro: I would love to see that. So what does content first mean in practice for you guys? You, you've said that a few times, but I know that's what you look at when it comes to acquiring new companies. How do you view that?

Patrick Svensk: It sounds pretentious, but I mean, it's the ability to bring an idea to a true format that you can sell to your, to a green light committee or to a, to a co-producer or a platform partner or wherever there is, and then produce it with high quality and monetize it the way, way it should be. I mean, it all starts with the idea, the access to talent, the ability to do research and, and understand the gap in the market that you're serving.

There's a lot of people who jump steps when they think they have a great idea, and then because in this industry it's, you know, the everybody can start a podcast. It's, it's, I mean, virtually everybody can start a podcast and that means that you, to me, since, especially since you can do that, you can't skip those parts in the development chain to really make it thought through, researched thoroughly.

The more thought through and formatted you have it, maybe they, it even sounds even more like an improv or whatever, but you have to be very, very focused on, on make, creating great content and then the rest will follow building a, a, a great sales team and the sales network. I've done that before. You know, that's, I, I don't say it's easy, but it's, it's a question of hiring people all the time and then firing 25% of them because they can't do their jobs.

But it's easy. It's so measurable. It's so, so visible. You got all the tech to help you and, and the volume, the share volume itself, whereas the original idea that turns into a hit, that secret source, that formula is what we're looking for.

Jeff Umbro: What are you prioritizing in terms of outcome, in terms of the metrics that you're looking at? Is it, like total audience? Is it total revenue? The amount of IP that you guys can

create?

Patrick Svensk: It starts with the, you know, the historic, the track record historically with audience and awards. Awards may be not because you, you, it's not always the most awarded shows, TV film for that matter, that makes the most money. But I still think it's fun to win awards. That's what, you know, the, the, the people that work here will like the awards and then we should win them, as many as possible, of course.

And that most, many of those will become profitable and successful media properties. And that's how we should, how we should view it and think about it. So audience and awards first, and then the revenue will come.

Jeff Umbro: So when it comes to your acquisitions, what's been reported is that you guys take a majority stake in every company that you acquire. And I don't know if there are any exceptions to that, but why that as opposed to a full acquisition?

Patrick Svensk: Yes. We have no exceptions. We always acquire the majority. We have now acquired some to a hundred percent in the next stage. So this middle stage is, it's two ways. I mean, for us to make sure that we have the entrepreneurs and the management teams and the creatives and the sales teams that they are, are still 100% committed and have the right local incentives.

And then we ask everybody, and everybody has reinvested some of the money they get into PodX group. So we also get alignment on the top. And then we will buy up to 100% after one to three years most often. Because then, and we don't mind because that it sounds like, wow, shit, you have to pay much more than it. You give them all of this and they grow. Yeah, but we don't mind because then we have the security. You can make a mistake and then, you know, we have never done so, we haven't departed yet from someone or sold anything. And I hope we'll never have to because that would either way be a failure, even if we sold it for a million bucks or more.

Definitely a, a good system for us to do this eventually, if we're going to, you know, get listed with this company. Make an IPO. We really want to, you know, of the mature companies that are, are part of our group and the, the largest companies we want to own more than 90%. So we consolidate also the cash flow and everything.

But right now we're, we're happy with the setup.

Jeff Umbro: Are you guys profitable?

Patrick Svensk: Yeah. Each company in the group, collectively they are, are profitable, but then we of course have some overhead with all the M and A and all that work that we're doing. We're cashflow positive. So the companies pay for their own development, et cetera.

That is a prerequisite. I mean, not each and everyone has to be profitable all the time. Collectively, they should always be making money. It's no use being in this industry, even if it grows 20% per year, we are in this to have fun, make a difference, create shows that people remember and talk about that people wanna advertise in, but we also wanna make shit loads of money. Yeah.

Jeff Umbro: Good. I like that.

Patrick Svensk: Yeah.

Jeff Umbro: So Lemonada is your first US acquisition. Why now?

Patrick Svensk: We have been so excited about the four acquisitions that we made in the UK and they all have various ambitions and to some degree also ready tap into American economy, American talent, American interests. So, but we have the greatest respect for, for American competition, American talent, et cetera, so we think it would be, you know, we, we were contemplating to only grow organically in the US through our, especially through our UK companies. But we said that we think it's faster they first bought a better way to acquire one of the greatest assets there is, and then try to put these guys in the same room and see what happens.

Jeff Umbro: I think it's really smart and frankly like there just aren't that many companies at the scale of Lemonada that are still on the table.

Patrick Svensk: No, that's true. That's true. I think they are, you know, they, they are off there among top 10 or whatever it is in total networks. And, and if you take out the iHearts and those guys, Sirius, they're probably top five, six, something like that. They have grown or still growing like 50% per year. They both develop their own IP and get success and do attract top talent with formats and ideas are jointly developed.

They're taking big steps on the ad sales side. They're also profitable this year, knock, knock on wood, we haven't finished a year yet, but would, as far as I can tell from the pipeline and the OPEX, I think they will be profitable this year. So, you know, if the timing is right, yeah. Then it looks like perfect. You know, if they can grow 50%, become profitable this year, maintain a good position and attractive and more talent and, and, a, people for development. I think it's a. Very, very good platform for us.

And then your next question might be then where, what else are you gonna acquire more in the US? We are interested absolutely in partnering up equity or not one way or another with independent producers. Some we might acquire, others we might just work with on, on either on development and co-production, or we work with one for on ad sales and distribution. Do we wanna buy something the size of Lemonada? I don't know. You tell me if there's something as great or even better, but sometimes you can't have too many chefs in, in the same kitchen. And Jessica's father is a chef, an Italian chef. We shouldn't forget about that. So, so maybe we, we will be equally happy or better off by attracting more niche entrepreneurs.

Jeff Umbro: Well, I think you guys are doing an amazing job so far across support there.

I have two more questions for you. First is, because you operate in the international podcast ad sales market more than I imagine most of the people who are listening to this show, how does that differ from the American ad sales market?

Patrick Svensk: I'd say in general, I know Europe and Latin America, I don't know Asia or Africa or, or those parts that, well, Europe and northern Europe is like one, two years behind in maturity to us. Even though companies like Spotify or a cost of those guys come out of Northern Europe, we're still behind, which is quite natural in most of these kind of tech industries and, developments in content, et cetera.

Southern Europe is probably 1, 2, 3 years behind northern Europe. The growth that we're seeing has the same patterns as, the US. The data is much better for us as well, butwhat's one interesting factor where I think Europe is ahead, is premium subscription for podcasts where, you know, Wondery, Apple, there are more single track shows that are, are offered in a pay play, so to speak.

But I'd say that the, there's two, a couple of interesting animals out there for like trying with the ambition of becoming Netflix for audio and that has not yet taken off to the same extent in the us so that could be the next thing coming out of Europe.

Jeff Umbro: That would be really interesting to see and, and you hear all these stories about Chinese podcasting. It much more resembles audio books and, you know, Goalhanger. I think there's an article recently saying they had a million paying subscribers and you hear about what Wondery Plus is doing. And I do think that is an avenue where there's a lot of potential growth and also an avenue that for any number of reasons, just like isn't clicking in the same way in the US.

I mean, the audiobook industry alone is already larger than by some counts, like the whole podcast industry. Why aren't we doing more of the pay for audio model, you know, as opposed to advertising.

Is it the same kind of advertisers that are buying across the way? Is it like, you know, DR brands, is it more brand awareness? Are they paying a lot of attention to CPMs and conversion rates? Is like, is the model the same?

Patrick Svensk: It basically is the same. I'd say that in northern Europe we're managing to attract quite strong brands to a great extent. We're doing quite a lot of branded content as well for luxury products. As such, when you are very much into also branded shows, that's not where you get the direct response advertisers.

It's, it's not the kind of, you know, TV shop and those kind of things. I did that in the nineties. That's not, you know, you don't have to do that much to attract them and make cost per order deals, et cetera. So that's not where our focus lies. Our focus lies with the big agencies, the big brands, the strong brands, and the ones that work across borders.

That's where our greatest synergies and opportunities lies.

Jeff Umbro: Well, you kind of just touched on this, but my final question is what opportunities do you see in the podcast space in the next few years?

Patrick Svensk: I felt alone a couple of years ago. Now a little bit more people are, are. So we're starting to talk about the premium subscription segment. People have said to me, ah, with the open RSS field, you know, there's so much great content out there, you will, people will never pay. And I think they're wrong. I think, you know, we've seen markets like Germany and the US where the large territories like Germany and the US where the pay TV market took off very slowly because there was, so all these channels are nothing on, but I mean, all the ad funded channels that eventually you didn't know what you were watching, if it was an ad or a show.

And when general Americans and general Germans started to get more household income and they, they lowered their bills for tech, whatever it was, started to pay more for media, uh, and for the consumption, and they got rid of the ads or they got an enhanced value through it, that's when that market took off.

And I think we'll see the same thing in, in, in audio, now with audio video. It's also converging and where we, we don't make a big fuss out of that. I mean, for us, we are just telling the same stories with the, you know, it's like going from black and white to color tv. It has value, but it's, it's not more difficult than that.

I think this, these kind of things will definitely trigger a higher value for the audience and will make them, they wanna pay for it. So I'm, I'm very excited about that. That ha, having said that, that doesn't mean that, I mean, still advertising is gonna be the big revenue stream and driving most of the audio listing, of course, but looking at markets, it's like, you know, not all all people know this, but in a country like Sweden, which I happen to be from, Spotify I think has more, 80 or 85% of their subscribers or their users are premium. They don't listen to ads, and that's why, sorry to say, but the sales team of Spotify in Sweden sucks because they don't have the volume to sell.

Acast is better than they are and that says, as one thing they're doing as well. Whereas of course, in Latin America, it's Spotify there that's 80% is is ad sales. So it differs between markets, but over time they will always be an audience that are prepared to pay for things.

Jeff Umbro: You see that across the board with like even Netflix and you know, Amazon Prime and Spotify, like even in their earnings reports, they're very clearly talking about their ad supported listeners as a funnel to the premium subscribers.

Patrick Svensk: That's the whole model. Yeah.

Jeff Umbro: And it's working. It's working very well for some of these companies.

Patrick Svensk: You bet.

Jeff Umbro: Yeah. Well, Patrick, thank you so much. This was really, really great and really

appreciate you taking the time.

Patrick Svensk: Well, thank you. It was nice chatting.

Jeff Umbro: Thank you so much for listening to this episode of Podcast Perspectives. Our guest today was Patrick Vesk, S-V-E-N-S-K. You can find him at podxgroup.com or on LinkedIn under Patrick Svensk.

For more podcast related news, info, and takes, you can follow me on LinkedIn at Jeff Umbro. Podcast Perspectives is a production of The Podglomerate.

If you're looking for help producing, marketing, or monetizing your podcast, you can find us at Podglomerate.com. Shoot us an email at listen@thepodglomerate.com, or follow us on all socials at @podglomeratepods. 

This episode was produced by Chris Boniello, and myself, Jeff Umbro. This episode was edited and mixed by José Roman. And thank you to our marketing team, Joni Deutsch, Madison Richards, and Morgan Swift. And a special thank you to Dan Christo. 

Thank you for listening and I'll catch you all in a few weeks.