The former members of the royal family had inked a lucrative deal worth $20 million with a streaming platform to produce podcasts. However, the agreement was terminated prematurely after only 12 episodes. In a joint statement, it was stated that the decision to part ways was mutual and that both parties took pride in the Archetypes podcast, which featured notable personalities like Mariah Carey and Serena Williams. Nevertheless, according to the Wall Street Journal, the former royals failed to meet the productivity standards set by the platform.
One Spotify executive went a step further and branded Harry and Meghan as “grifters.” Spotify has made significant investments in the podcasting realm, acquiring talented individuals such as Joe Rogan, Harry and Meghan, and even the Obamas. Additionally, they have purchased podcast publishers like Gimlet and Anchor, invested in technology companies like Chartable and Podsights, acquired audiobook companies like Findaway, and obtained ad platforms like Megaphone. Spotify’s CEO, Daniel Ek, admitted to making errors in their $1 billion podcasting investments earlier this year.
So, does Spotify’s acknowledgment of overpayment indicate the need for smarter investments and acquisitions? Or does it reflect a larger issue in the digital audio ecosystem? The recent Digital News Report 2023 released by the Reuters Institute on Journalism sheds some light on this matter. The report highlights that podcasting is not yet a mainstream medium but attracts an intriguing audience. It states, “Listeners tend to be richer, better educated – and, crucially, much younger.” Across the 20 markets surveyed in the report, podcast penetration is steadily increasing, although gradually.
Over the past five years, the percentage of individuals listening to at least one podcast in the last 30 days has risen from just over 25% to 34%. Interesting international dynamics come into play as well, with English-speaking markets and Nordic countries producing more original podcasts. In contrast, other countries see less investment in native podcast content, with repackaged radio content dominating. The niche nature of podcasting also makes it less susceptible to the control and monetization efforts of big tech players. It remains a fragmented landscape without a standardized framework.
Furthermore, a recent report from the Pew Research Centre exemplifies this fragmentation. Among the top-ranked podcasts in the US, 451 were categorized. True crime podcasts accounted for 24% of the rankings, followed by politics and government at 10%, and entertainment, pop culture, and the arts at 9%. Self-help and relationship podcasts made up 8% of the list. Talk shows, covering a wide range of topics, constituted 20% of the most popular podcasts.
The monetization of podcasts also shows diverse methods. The report found that 47% of the top-ranked podcasts rely on audience support through options like subscriptions, donations, or merchandise sales. This paints a picture of a medium that is steadily growing but at a slower pace. Furthermore, podcasting has been relatively slow in attracting advertisers, generating only around $1.5 billion in advertising revenue last year. While only a select few podcasters can earn a living solely from their audio content, podcasting remains resistant to the winner-takes-all model prevalent in other aspects of the internet.
Consequently, businesses that heavily invested in podcasting, such as Spotify, NPR, Vox Media, Amazon, Pushkin Media, and SiriusXM, are downsizing. The Netflix approach of greenlighting numerous shows in the hope of finding success does not guarantee positive outcomes in the podcasting industry. Spotify’s split from Meghan and Harry serves as evidence of this. Nonetheless, Spotify remains undeterred and continues to onboard new podcasters. However, they are proceeding with more caution when it comes to talent selection, contract terms, and distribution.
Just a day after severing ties with Meghan and Harry, Spotify announced a new show featuring former Daily Show host Trevor Noah. Although it will be a “Spotify original,” the podcast will not be exclusive to the platform and will be available on other podcast providers. Interestingly, this announcement was made at the Cannes Lions Festival, a prestigious event in the advertising industry.
One can create their own punchline about “grifters” in light of these developments.
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