Spotify's Podcast Strategy Continues to Unravel
Recent events have highlighted the struggles of Spotify's podcast strategy, with missteps and failed partnerships exposing the challenges of producing successful podcasts. While Spotify's extravagant events at Cannes Lions may have drawn attention, back home, the company is grappling with the fallout of its podcast deals with Joe Rogan, Prince Harry and Meghan Markle, and others. With two rounds of layoffs in 2023 alone, it's clear that Spotify is struggling to find the winning formula for podcast success.
One of the pillars of Spotify's podcast strategy was the acquisition of in-house studios Parcast and Gimlet. Despite coming with their own staff and audiences, Spotify's lack of direction and knowledge within the podcasting space led to the decline of these studios. Difficulty in attracting large audiences and developing hit shows, as well as keeping certain podcasts exclusive to Spotify, contributed to their downfall. Ultimately, the platform laid off over 200 staff members from Gimlet and Parcast earlier this month, absorbing the remaining teams into Spotify Studios.
Last week, Spotify's troubled deal with Prince Harry and Meghan Markle's production company, Archewell Audio, ended unceremoniously. The $20 million deal, which should have produced multiple projects, only resulted in a 12-episode interview podcast and a holiday special. Reports suggest that the couple didn't deliver as expected, leading to the deal's collapse and an incomplete payout. Notably, Spotify has been willing to openly criticize Archewell's lack of output, with Spotify spokesperson Emily Yeomans comparing their performance unfavorably to Higher Ground, Barack, and Michelle Obama's production company.
Alongside Archewell, several other star-driven deals have faltered, including those with Higher Ground, Brené Brown, and Ava DuVernay. Higher Ground chose not to renew its contract, citing a desire to avoid platform exclusivity. DuVernay's multiyear exclusive deal ended without producing a single podcast. A key issue is that none of these high-profile individuals, from former presidents to filmmakers and bestselling authors, were able to guarantee podcast hits. Even a podcast featuring Barack Obama and Bruce Springsteen failed to captivate audiences.
In conclusion, Spotify's podcast strategy is in need of a serious overhaul. The company's investment in in-house studios and high-profile partnerships has not delivered the expected success, and its recent missteps have further damaged its reputation in the industry. As Spotify grapples with these challenges, it must find a new approach to creating and promoting podcasts that can deliver the hits it so desperately seeks.