Podcasts are in decline, Spotify is changing strategy: create great series

NY – Podcasts are no longer a goldmine as they were in 2018. Everyone has podcasts, and advertisers aren’t thrilled anymore. Or at least not enough to recoup the investment. Spotify – this is the paradigm of the whole phenomenon: the corporation has spent more than a billion dollars to build an empire, broke millions of agreements with Kim Kardashian, Obamaprince Harry AND Meghan Markle, spent $286 million building two recording studios and spent an average of $250,000 per episode. But bet like Wall Street Journaldidn’t pay.

There is always a “but” in American capitalism: things don’t always go well, say the gurus of the system, “but” we need to reverse course. And: we lost a lot of money, “but” now we have to return it. And that’s what Spotify decided to do, and do it quickly. The 527 million euros lost in the first six months of June, compared to revenues of 6.2 billion, should be a turning point. In the US, the podcast sector is expected to reach $2.3 billion in revenue this year, up 25 percent from 2022, but that’s a very small part of the $200 billion digital ad market pie. Analysts are “misled.”

Podcast audiences are technically growing, but Spotify has found that investing millions of dollars in a podcast doesn’t alienate listeners from other shows and doesn’t seem to attract advertisers. There are more than 100 million listeners on the company’s platform, which is ten times more than in 2019, but this is not enough. The profitability of the sector will begin in 2024, they said. But will it be so? Meanwhile, they sent home two hundred employees in June, which is two percent of the workforce. Spotify has decided to change its strategy on the show as well and offer a new product: create great podcast series, limit investment to exclusive content, and share business risk with entertainment big names.

With a TV presenter Trevor Noah A $4 million deal was signed that allows the company to share the show’s advertising revenue with him. Spotify’s goal is to become the global giant for everything from books to sports to news, and reach 100 billion in revenue by 2030. Last year they amounted to 11.7 billion. “We are concentrated,” Al explained. WSJ Sugar Elkhabashi, the head of the company’s business – to produce shows that attract a loyal audience and also attract advertisers. Now we have a portfolio that can do it.”

Spotify offers over five million feature, non-fiction and star-studded shows: Stolen To Heavy weighttelling about the repentance of people, serial killers, which needs no explanation. Now the focus is on creating audio series, audio dramas and audio documentaries, the dream is to do something similar to podcasts. House of cardsthe cult TV series about the Washington intrigues in which he starred Kevin Spacey. Big series, big names, big stories to completely capture the market, become Netflix audio, connect subscribers and attract advertisers. Indeed, if possible, Spotify is looking to increase revenue, especially from advertisers. Managers say you’ll have to follow the YouTube model of selling copyrighted ads and then sharing the revenue. Something needs to be done, and soon: investors believed in the future of audio entertainment, but now they want to see dollars on the table for themselves.