Suppose you’re fortunate that you’re in the South of France this week to attend Cannes Lions (basically the less stylish, brand-focused, and advertiser-focused alternative to the festival of the film). In that case, You might be drawn to check out Spotify. Spotify has put together a dazzling four-day program of sound baths, beachside mixers, masterclasses in podcasting, and panel discussions with Spotify top executives and well-known podcast hosts such as Emma Chamberlain and Alex Cooper. The audience on Tuesday evening was treated to a performance of “Spotify Beach” by Florence and the Machine, William, and Jack Harlow.
If you’re in another country, there is a risk of being too close to the streaming audio service. This week, Joe Rogan — the person responsible for providing an enormous part of the company’s podcast advertising revenue — hosted an anti-vaxxer presidential contender in his program. On the same day, the 20 million deal for a podcast with a royal couple broke down and was immediately followed by a high-ranking executive saying the two as “fucking grifters” on his podcast. This all comes after the announcement of two layoffs within 2023, which focused primarily on the company’s podcast division.
Spotify realizes there is something wrong with its approach to podcasts. The last few weeks have demonstrated that. Its mistakes show how distinct the recipe for success is in podcasts from video games, film books, or even music. The franchise, IP, and name popularity can splash across different media. However, in audiobooks, a show featuring an award-winning writer, best-selling filmmaker, and even former President may barely be a hit on the charts. Amid years of the success formula, it appears to be going downhill.
One of the pillars of Spotify’s podcast strategy was that it would be exclusives produced by its studios. Spotify has spent a significant amount to purchase two of the most popular: Parcast and Gimlet, the latter of which received the Pulitzer for its journalism earlier in the year. Gimlet and Parcast also created the type of narrative, high-end podcasts Hollywood studios adored to pick up to use as IP.
However, despite having excellent staff and a built-in audience, their lack of leadership and understanding of the field of podcasting resulted in an end-of-the-line to Gimlet along with Parcast. They failed to reach large audiences or create popular new series. The shows weren’t getting the proper promotion or backing from Spotify. Making specific podcasts exclusive to Spotify resulted in a decline in listeners.
The culmination was eliminating over 200 positions across Gimlet and Parcast in the last month and taking what was left over to become Spotify Studios.
The second pillar of Spotify’s plan for podcasts was flashy, mostly famous-driven originals. Some have panned out, such as The Batman Unburied podcast by David S. Goyer or the Case 63 scripted drama featuring Julianne Moore and Oscar Isaac. But many haven’t.
The week before this week, the tensest celebrity partnership — which included Prince Harry and Meghan Markle’s production company, Archewell Audio — ended in an unsatisfying conclusion. The terms of the deal stipulate that Archewell was supposed to have produced several projects. However, it appears that the couple couldn’t (or would not) complete the project with their promised output, and the deal resulted in a 12-episode podcast of interviews and a special Christmas episode. The inability to produce resulted in the deal’s failure at $20 million, and the couple did not get the entire amount.
In response to Hot Pod last week on Spotify’s decision not to renew the contract, Spotify spokesperson Emily Yeomans noted the lack of Archewell’s production. “We cannot speak to the specifics of how the deal was drafted, but as a reference, Higher Ground has continued to create new series after launching their collaboration with Audible. Over 2.5 years that they have been in operation, Archewell only released only one episode that was Archetypes,” Yeomans said.
See Bill Simmons’ comments on the studio’s work to show how tangled Spotify’s relations with the Duke and Duchess of Sussex were. Simmons, Spotify’s director of monetization and innovation for podcasts, proceeded to criticize both on his talk show, describing them as “grifters.” Simmons also teased a drunken recreation of the disastrous Zoom meeting to discuss ideas with Prince Harry.
I (and many others) would gladly pay big bucks to hear Simmons recount that tale. But the story he tells is precisely the same way to Spotify as it did with the Duke and the Duchess, which suggests that Spotify agreed to sign the royals on an agreement for a multiyear, multimillion-dollar contract but didn’t know if they’d be able to create podcasts, or what the podcasts could be about. Spotify was reportedly required to persuade them to ensure nothing was released out the door.
Before the Archewell conflict, Spotify’s contracts with other high-profile stars-driven creators and studios ended, which included Higher Ground, Brene Brown, and Ava DuVernay. Barack, as well as Michelle Obama’s company for production Higher Ground, opted not to renew its contract with Spotify in the past year, citing the desire not to have its shows tied to one platform. A multiyear exclusive agreement with DuVernay did not result in the release of only one show — the two parties ended their relations last year.
The problem lies in the fact that none of these folks from former presidents, filmmakers, and bestsellers in the field — were able to create sure-fire podcasts that would be a huge success. Even a podcast that Barack Obama and Bruce Springsteen hosted was able to put people to bed.
The ensuing sequence of events says much about the flimsy nature of the podcast business on Spotify.
All of them were aimed at eventually bringing more listeners to Spotify. However, there was one celebrity deal that could be an effective pillar in its own right: Joe Rogan, who hosts the most listened-to podcast in the United States.
Rogan has frequently caused a headache for Spotify since the platform signed the singer to a deal worth 200 million in 2020. artists like Neil Young threatened to leave the service, while employees and advertisers raised concerns. However, he’s been from the spotlight for a few months until the last week. This week, Rogan published a three-hour discussion with anti-vaxxer candidate for President Robert F. Kennedy Jr. The latter said that vaccines could create autism, while 5G causes cancer, as Motherboard published. Videos from the program quickly gained new relevance on anti-vax social networks and became the main topic.
The situation boiled over as Rogan started responding to criticisms on Twitter and accusing the host of propagating misinformation. When Dr. Peter Hotez, a well-known pediatric physician, tweeted the Motherboard article, Rogan began challenging him to demonstrate his assertions. Rogan tweeted at Hotez repeatedly and asked the vaccine expert to take on Kennedy during his talk show, offering a donation of $100,000 in exchange.
Hotez finally conceded. She tweeted, “Joe, You have my cell phone and email address. I’m always ready to talk about anything with you.”
However, Rogan did not like Hotez’s response to the quote being tweeted and declared it to be a “non” response. “I have publicly challenged you for quoting tweets that you have publicly shared and agreed with that dog-pile vice article. If you’re serious about the values you hold, you’re now in the position of having the chance to have a huge debate that could be the most popular debate of this kind has ever seen,” the author wrote.
Wealthy entrepreneurs appear to have plenty of time to spend on Twitter. Elon Musk joined the debate while Mark Cuban leaped to Hotez’s defense. The two Rogan and Musk supporters lash at Hotez, who was subjected to hours of harassment online and triggered an unwelcome appearance by anti-vaxxers at the house he lives in. Spotify hasn’t yet replied to Verge’s request for clarification on the events. Rogan recently increased his price for Hotez to $600,000.
The ensuing series of events says something about the sluggish nature of the podcast business on Spotify, which is dominated predominantly by former hosts of the show Fear Factor. It’s not even a collection video of Rogan saying the “n-word” nearly twice that got him removed from the platform. It’s a lot of force for one person to give up.
As the foundations of Spotify’s podcast strategy remain in decline, Spotify seems to be turning its attention to a major — and more lucrative remaining aspect: it’s capacity to market advertisements.
This month, Spotify’s chief of its podcasts department, Sahar Elhabashi, wrote a memo regarding the company’s “next stage” in podcasting. It will focus on “delivering additional value” to creators and listeners and include updating its ad tools and the business model for those who podcast. We began to learn what that could mean during Cannes next week.
First, we know that Spotify has partnered with the former Daily Show host Trevor Noah to start the regular Spotify Original podcast.
“I believe that what I like the most about [… podcasts and, unlike other media, is the fact that they are flexible and flexible. You can play around with what you’re looking for. You can design worlds wherever you’d like to. You can design it however you want. And I’m sure there are a few areas in media that can still do the same qualities,” Noah said onstage.
However, this “flexibility” in podcasting is where Spotify’s problems lie. Spotify doesn’t offer anything distinctive in the field of podcasting. That could be one reason Spotify’s approach to content has changed. Although the Trevor Noah podcast is scheduled to air later in the year and is the first Spotify Original, it will not be exclusively available on the Spotify platform. This is a win for Noah’s podcast and will get more recognition. It’s also a turning point for Spotify, which has re-purposed some episodes of its original programming within its garden walled-off.
“Spotify is in a unique position in figuring ways to help the platform function in a manner that benefits them. But they’re not there until now,” podcast strategist Eric Nuzum explained to Hot Pod.
According to Nuzum, the moment Spotify discovers what it is, that makes its platform distinct from its competitors such as Apple, Stitcher, SiriusXM, and more, no matter where they sign up with. Spotify is far from being the most well-known streaming platform. The distinction goes to YouTube and Apple Podcasts, which is the most popular with the highest number of downloads (thanks primarily to its automated downloads feature), which accounts for 71 % of all downloads, in comparison to Spotify’s 9 percent according to Podtrac data from March.
“Spotify likes to release numerous numbers regarding the size of their growth, and I think they’re worthy of some recognition for their efforts,” Nuzum said. However, he said that if you talk to most creators, they’ll say approximately 50-60 percent of the downloads they receive are from Apple Podcasts, and Spotify could be responsible for a fraction less than 25.
It’s a reminder that Spotify hasn’t yet taken over the world of podcasts despite its massive investment. “Someone laughed at me recently that Spotify invested one billion dollars to transform into Acast,” said Nuzum about another Swedish audio-streaming firm.
Spotify’s Ad Analytics, a new tool unveiled in March, highlights its growing concentration on advertising dollars and its requirement to provide benefits to creators. It isn’t easy to find talented creators, and ad-based businesses are the primary source of revenue for any success. Pixel is the most notable of Ad Analytics’ offerings, a brand-new tool for tracking ads that help advertisers monitor leads and determine which podcasts triggered the highest purchases. Spotify is also believed to launch the premium audio level, which will feature high-quality audio, more audiobook options, and other benefits that could be more attractive for those who listen.
In the meantime, Joe Rogan is still the primary reason Spotify’s podcast business differs from Apple, Amazon, iHeartPodcasts, SiriusXM, Stitcher, and the rest. Despite all Spotify has accomplished and the sums it’s invested — the plethora of deals with content, acquisitions of technology, and awards, Rogan, the original Fear Factor host, remains the most popular podcast choice. However, the relationship between Spotify and podcasts isn’t healthy due to mutual dependency.
“Who knows what the future will be like for Joe Rogan and Spotify? I don’t believe Joe Rogan needs Spotify. But I think that Spotify’s ad business could be hurt without Joe Rogan,” said Nuzum.
“[…Rogan’s program is the only thing they’ve got. It’s way more important than everything else.”
“Unfortunately, the moment that Spotify is making big changes and makes big changes, it creates a massive impact on the entire business.”
Rogan can travel the world with his show, bringing most of Spotify’s profits. This implies that the most lucrative deal also has its most significant vulnerability, with the potential of collapse at any time. Whatever happens to Spotify can ripple effect on the entire audio industry.
“You expect companies to risk their business and test the limits of their imagination because that’s where the best ideas are discovered. However, when Spotify makes big moves and makes big moves, it creates a huge impact on the entire podcasting business,” Nuzum said.