Spotify is still in weak hours. The audio streaming company confirmed on Thursday that it has ended its relationship with Prince Harry and his wife Meghan Markle. Archewell, the company of the listed British royal couple, signed a deal with the Swedish company in 2020 for 20 million dollars (around 18.2 million euros). His Archetypes podcast launched in August last year and topped the charts. Although Enrique and Meghan will be looking for a new channel to spread their content like the Obamas did when they switched to Amazon, the split underscores the podcast’s transformational times. After the rage, now play an adjustment to grow more slowly.
Last week, Spotify unleashed lesser-known people. The company announced that it would lay off 200 employees, or 2% of its workforce. Most affected by the cuts were sound engineers who acted as service providers for the extensive podcast offering that the company decided on some time ago. Spotify has invested in this medium like no other, signing exclusive programming deals with personalities like Joe Rogan, the country’s most listened to, or celebrity interviewer Dax Shepard.
Prince Harry and Meghan Markle at an event in New York in 2021. ANGELA WEISS (AFP)
Spotify also bought production companies like Gimlet and Parcast to multiply the offerings in its catalog. In 2021, to demonstrate its strength in the industry, the company opened Pod City, a large building in the Arts District of downtown Los Angeles with capacity for 600 employees, 18 recording studios, an auditorium and a meeting room. Rehearsals for musicians
Paul Vogel, chief financial officer, admitted in April that investors will have to wait as the podcast business isn’t profitable yet, although they expect it will be within the next two years. The company, led by Daniel Ek, has more than 100 million consumers of sound content every month. Analysts at the consulting firm Constellation Research assume that the offer is oversaturated with too many programs that do not find an audience. Ek themselves have stated that they will adopt a more “prudent” policy as they grow with the medium. That means less money for star contracts and more business acumen. They have appointed an executive with experience building products that need to whet advertisers’ appetites and acquire new subscribers.
This is not a problem exclusive to the European company. This happened throughout the year at Vox Media, Amazon, SiriusXM and Pushkin Media, journalist Malcolm Gladwell’s audio company. Public radio in the United States, NPR, one of the country’s most popular media brands, is experiencing a similar situation. In late February, the company publicly announced that it was shedding 100 employees, or 10% of its workforce, in its worst financial situation since the 2008 crisis. The argument now is the lack of advertising revenue. The industry received around $1.5 billion from advertisers in 2022, a tiny fraction compared to the large share that television takes ($70,000 million). Spending in this area is forecast to be even more conservative.
The hardest hit area within NPR was the podcast division. The channel canceled three acclaimed shows: Invisibilia, for popular science; Louder Than a Riot, on hip-hop history and rough translation, where foreign correspondent Gregory Warner shared stories from around the world. The comic “Everyone & Their Mom”, which was published in 2022, also came to an end. Last year, the company, which receives less than 10% of its budget from public funds, laid off 40 employees and canceled 11 programs.
NPR recently reported that weekly listening to some of its star shows, such as Up First, a start-of-the-day news program, and Fresh Air, a talk show, rose from 10.6 million downloads in 2020 to 8 million in 2023 on Apple save on computer.
Megan Lazovick, vice president of Edison Research, says consumer trends have returned to their normal pattern after the pandemic boom. He notes that the podcast will stick with American consumers. Last year 25 million episodes were released. “The growth of online audio and the record numbers of podcasts are an interesting aspect,” says the CEO. An annual report prepared by the company confirms the maturity of the market. 64% of the country’s population has heard a broadcast, up 2% from the previous year. Three out of ten have heard one in the last week. The average consumption of fans is nine programs per week.
Even though the podcast is enjoying a big moment, the media is taking the hit of the economic recovery. Social media is teeming with journalists who have lost their jobs due to changes in their companies and are looking for new opportunities. This week’s turn was LAist, a local independent and community-funded radio station. About twenty employees, 10% of the workforce, were made redundant. “These are wild times for those of us who work with audio and we want to do things that are good and have an impact,” wrote Sophia Paliza-Carre, one of those affected by the cut, on Twitter.
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