The new $100 million podcast startup Luminary has been getting blasted by top podcasters - here's what's going on

First up, what is Luminary?

In short, Luminary is a new app for downloading and listening to podcasts.

In this respect, it's very similar to existing podcast apps — from Apple's own Podcasts app to third-party players like Pocket Casts.

The difference with Luminary — and the thing that makes it comparable to Netflix — is that it pays a variety of podcast producers to make new, exclusive podcasts that are only available through Luminary.

The idea is simple: If you would pay for Netflix to watch "Russian Doll," maybe you would pay for Luminary to hear Trevor Noah's new podcast, "On Second Thought."

It was this idea that attracted major podcasting names like Adam Davidson, Leon Nayfakh, and David Axelrod to Luminary. And it was these major names — combined with Luminary's paid subscription concept — that helped bring in more than $100 million in startup capital.

So, what happened? Why are people upset?

The backlash Luminary is facing has nothing to do with the way the app functions for users, or even the high price of the monthly subscription.

Instead, it's the way that Luminary was serving existing, non-Luminary podcasts that caused issues.

In short: The way that Luminary was linking to popular podcasts made it impossible for podcast creators to quantify how many people were getting their podcasts through Luminary.

That may sound trivial, but it's hugely important if you're a podcast that sells advertising to pay the bills. The only way to put a dollar amount to advertising is by knowing how many people those advertisements will reach.

Luminary has since amended the issue, but not before several prominent podcasters — from Marco Arment to Ben Thompson — got very publicly vocal about the service.

"I wouldn't advise that podcasters pull out of @hearluminary over their proxying yet — I'm giving them a short window to change it," Arment said on Thursday. "Pulling your show out of a podcast player (which may end up a significant one) shouldn't be a rash decision. But if they don't change? Screw 'em."

On top of that, Luminary is missing some of the biggest podcasts — stuff like "The Daily" from the New York Times and "The Joe Rogan Experience."

Even before Luminary's soft launch upset podcasters this week, a variety of major podcasts were notably missing from Luminary's library: "The Daily" from The New York Times and "Reply All" from Gimlet Media are both standouts, and "The Joe Rogan Experience" requested to be pulled from Luminary on Wednesday.

Some of those could head to Luminary in the future, but the app is facing a serious uphill battle with podcasts like "Reply All" — and that's because Gimlet Media is owned by Spotify.

What does Spotify offer? Its own paid subscription service, including a section dedicated to podcasts.

For $10 per month, you could pay for a Spotify subscription that provides access to a huge library of music and a huge library of podcasts — including exclusive ones that Spotify produces itself. Or, you could pay $8 per month for Luminary.

What happens next?

That's the big question.

For its part, Luminary responded swiftly to complaints from major podcasters, saying it heard their concerns, and that it used the system it did to make the experience better for users. Luminary said it would be making changes to its iOS and Android apps and web player to address the issues.

Luminary did not immediately respond to Business Insider's request for additional comment.

Whether the company is able to bring back any podcasters it might've alienated in the last week remains to be seen. It's even less certain that Luminary will be able to attract paying users in a medium that's cost nothing for its entire existence.

But with $100 million in capital, it's clear that Luminary has room to give it a shot.

We heard your concerns this morning and would like to share some information with you about #Luminary. pic.twitter.com/XOPwmJGmb4

— Luminary (@hearluminary) April 25, 2019