I don’t know if anyone reading this knows or cares, but for my day job I work in podcasts. It started as a passion. I would record myself and then comedian friends and then eventually successful comedians. Then I started working for a corporation and now I work for a different one. I love podcasts almost as much as I love writing and I’ve had the opportunity to be involved with some pretty cool shows.
I’ve also learned a ton about the “industry,” which like all things in America, tends to ruin a great art form pretty quickly. Everyone except me at my current job has been laid off in the past few weeks, and I’m just waiting for that call to come. This is at least in part, I believe, because “the industry” thinks that “podcasts aren’t profitable” or something, because that’s what the Spotify CEO said. But really they just don’t understand the medium.
After Spotify laid a bunch of people off and their stock price went soaring, I wrote this article about how Spotify’s podcast demise will actually end up benefiting the podcast “industry” in the long run, because Spotify never understood podcasts and were actively trying to tarnish everything that makes the medium great. I tweeted that I was writing the article and would only settle for publication in the New York Times Op-Ed section.
I sent it there and to a couple other PRESTIGIOUS places but never heard back. It was a timely piece, but I don’t really want it to just sit on my computer either, even though the process of writing it was cathartic enough. So I’m sending it to you, my loyal newsletter subscribers who hopefully don’t hit unsubscribe after reading it.
Like I always say, I’m still trying to figure out what this newsletter is. For my New Year’s resolution, I decided to listen to a new artist who I’ve never listened to before every day. I’ve been listening to Milwaukee rappers this week and jotting down notes as I go. So look out for a newsletter on that next week, and for the foreseeable future, until I get bored or you hate it or I give up on my resolution like everyone else. I also might interview artists or just publish random thoughts like this. Thanks as always for reading and supporting my writing. I really appreciate it.
Without further ado here is my NEW YORK TIMES OP-ED ON HOW SPOTIFY FUCKING SUCKS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! (NOTE: WHEN I SAY “THIS YEAR” IT MEANS 2023… DEAL WITH IT. ALSO I REALIZE THIS ARTICLE IS KINDA BORING AND RAMBLY AND NOT ABOUT MUSIC, JUST WANTED TO POST IT SOMEWHERE, YOU CAN ALWAYS JUST IGNORE IT)
When Spotify acts, the industry takes notice. The company’s heavy investment in podcasts beginning in 2019—when they acquired Gimlet for $230M and Parcast for $56M—coincided with a corporate audio gold rush. Audacy bought Pineapple Street Studios in 2019 for $18M. SiriusXM purchased podcast app Stitcher for $325M in 2020. Later that year, Amazon acquired content studio Wondery for a deal reported to be around $300M. Major corporations like Disney and FOX launched audio series and podcast divisions. Spotify continued its content sweep, paying $250M in 2020 for Bill Simmons’ post-Grantland sports and pop culture network The Ringer. Then, in what proved to be among their most controversial moves, Spotify purchased exclusive licensing rights for the Joe Rogan Experience for a sum reported at the time to be $100M but since rumored to be more than double that massive figure.
Now that CEO Daniel Ek has announced the Swedish tech company is cutting 1,500 jobs—or 17% of its workforce—in its third round of layoffs this year, an easy assumption would be that the podcast boom is over. The industry is on the decline, and never was as lucrative as Spotify predicted it would be.
The doomerism extends beyond just the reduction in labor. Spotify shut down both Gimlet and Parcast this year (2023), consolidating them into their new venture Spotify Studios. Again, the industry has followed suit. At the end of August, SiriusXM shut down Stitcher after 15 years of operation. Malcolm Gladwell’s studio Pushkin Industries laid off 30 percent of its staff in September. New York Public Radio, parent company of WNYC, cut 6 percent of its staff in October. Google Podcasts is ending.
Because of its significant investment in podcasting, Spotify has been held up as the ultimate emblem of the industry’s successes or failures. One person with whom I spoke for a podcast strategy position at a prominent corporation answered my question about the outlook of the department with cautious skepticism, saying something along the lines of, “What’s happening at Spotify certainly isn’t a good sign.” This is a misguided reaction.
In reality, what’s happened at Spotify has no reflection on the podcast industry. The only thing it’s a sign of is the company’s own brazen ineptitude crashing down on them.
Spotify tried to buy an industry without understanding its nature. They thought they could control audiences without stopping to think, or ask, about listener preferences and habits. They thought they could monopolize a medium that demands to be more open and free than its entertainment predecessors. Spotify’s failures do not represent the death of podcasting, but the end of their attempts to kill it. The recent turmoil and upheaval at the company will ultimately have a net positive effect on the industry at large, and restore the core values and attributes of podcasting.
The most obvious misstep in Spotify’s strategy—especially considering the aforementioned similar bad investments of other mimicking companies—was their attempt to make shows which audiences could previously consume via any podcast player of their choosing available only within their platform. In addition to the studio sweep-ups and the purchase of the Joe Rogan Experience, the company also licensed Alex Cooper’s Call Her Daddy on a multi-year deal from Barstool for more than $60M, and signed a deal with Prince Harry and Meghan Markle’s Archewell Audio on a $20M deal.
Cooper has since launched her own Unwell Network, with Call Her Daddy remaining exclusive to Spotify for the terms of the deal but the rest of the slate having widespread distribution. Joe Rogan put out the first two hours of his recent episode with Elon Musk on X, a Tucker Carlson-esque hint at what might happen when his Spotify term is up. Prince Harry and Meghan Markle pulled out of their Spotify deal after producing just one twelve-part series for the platform. Recently, Spotify announced that it would not be renewing the contracts for two Gimlet productions, the eight-season series Heavyweight and the Pulitzer and Peabody-winning Stolen.
For indie creators, the dream of selling out to Spotify or another tech company for a multi-million dollar sum is long over. If the industry is watching what Spotify is doing, major corporations will be much less likely to bid on a smaller studio. They may also be more hesitant to invest in new series. Especially limited run series without consistent ad revenue opportunities.
The dream of selling a show into exclusivity, however, never aligned with the core values of podcasting that make the medium attractive to listeners. The companies who invested in shows because Spotify was doing so might not have thought through how monetization and revenue operates in the space. Particularly, they may not have realized how it differs drastically from traditional forms of media like cable television or even video streaming. Spotify has been misleading competitors who similarly don’t understand the industry, leaving laborers and independent creators worse off in the process.
Spotify bet a large sum of money on the unfounded idea that podcasts could become indistinguishable from other forms of digital content. They attempted to force a 20th century cable TV model onto a 21st century medium that’s fundamentally incompatible with that business model. It may have worked for revolutionizing the television industry, moving digital series behind paywalls at Netflix, Max, Disney+ and other streaming services, but it cannot work in the podcast space.
Podcasts were built on RSS feeds, a technology which may seem antiquated to former users of now-shuddered news services like Feedly, but which persists for anyone who listens to audio series outside of Spotify’s platform. Podcasters upload mp3s—or, now, via Megaphone, Anchor, YouTube, X, or TikTok, video mp4s—to a podcast hosting site. The hosting site creates an RSS feed, a standardized, updatable document that podcast players then reference in order to deliver listeners a download or stream of the podcast file. Aside from the fact that the files need to be hosted in a central location, the nature of RSS is open and non-exclusive. Apple and Spotify require podcasters to submit their RSS feeds directly to their platforms, but there are plenty of podcast players that scrape the web for popular shows and allow users to listen just based on the fact that the RSS feed is out there on the internet.
When a podcast is exclusively available on one platform, it is no longer a podcast. It’s a digital show. Spotify tried to make podcasts digital shows. Given their recent string of layoffs and their admitted strategy shift regarding podcasts, this effort clearly did not have the monetary payoff they anticipated. Podcast fans want to consume anywhere and everywhere. According to a 2020 study, 40% of TikTok users discover podcasts through the platform, a number which has surely grown along with the app since then. According to a 2023 study, 46% of podcast consumers stated they prefer watching podcasts with video. Although Spotify has made efforts to incorporate video on their platform, this also emphasizes the growing importance of YouTube in the space, as well as efforts for platforms like X to distribute podcasts there.
For independent creators, particularly those who never had a chance of seeing a multi-million dollar Spotify deal, having a podcast distributed as widely as possible can only work to their advantage. There are monetization opportunities on both YouTube and X, and increased exposure can lead to heightened ad sales, brand awareness, and merch revenue. When Spotify introduced exclusivity into the medium, they closed off this literally infinite stream of consumption and exposure for their own greedy benefit. It backfired, and now the industry is scrambling to reconcile.
Apple Podcasts—the most popular podcast listening app with 37.4% market share (Spotify is second)—refrained from copying the exclusive distribution model, but did shift strategy in order to compete with Spotify’s growing threat of industry dominance. In June 2021, Apple launched their paid subscription model. This gave creators the option to monetize content through exclusive content uploaded directly to the platform. Like Spotify pushing the podcasts they paid for on their own platform, Apple also unabashedly gives preference to shows that utilize the tools that give Apple the highest returns. Apple’s editorial team is not unbiased. In one meeting, an employee directly mentioned to me that our show would have a better chance of being featured if we opted-in to their subscription services. It’s unsurprising that they named Julia Louis Dreyfus’ podcast Wiser Than Me the top show of 2023, considering that series offers exclusive subscription content via their deal with Lemonada. I’m not a conspiracy theorist, but that ain’t a theory.
Unfortunately, Spotify didn’t limit their cannibalistic efforts to content. They attempted to monopolize everything, including recording and analytics. In 2019 they acquired Anchor, a free hosting platform marketed toward upstart and indie creators. In 2020 they purchased Megaphone, a premium hosting platform that caters to enterprise users. This led to the rebranding of Megaphone’s programmatic ad service as the Spotify Audience Network, giving the tech platform a slice of ad sales in addition to their exclusive deals. Soon after, they bought Australia-based hosting platform Whooshkaa, which gave them ownership over a tool allowing radio companies to turn broadcasts into on-demand podcasts. In 2022 they bought both Podsights and Chartable, two of the leading analytics and attribution companies. They also acquired Podz, a podcast discovery platform, and inked a partnership with popular recording platform Riverside.fm. They didn’t just want to change the way audiences listen. They wanted to control all aspects of the podcast industry.
For independent podcasters, this onslaught of acquisitions was not helpful. All it did was consolidate a wide variety of tools that supported the industry’s open ecosystem under one monopolistic umbrella. Spotify’s layoffs and strategy shift away from exclusive licensing won’t change this consolidation. People who want to make the most of the tools available to them will still be forced to operate under Spotify’s corporate shadow. It will take much more—and require much more unnecessary economic pain for the working class—for that damage to be undone.
If there’s any good to be derived from a 17% reduction of the workforce—aside from the 7% spike in stock value Spotify experienced when Ek announced the news—it’s that exclusive distribution has proven to be a failure for all those except the lucky few who became hundreds of million dollars richer. When podcasts return to RSS feeds, and are more accessible on every platform, listeners will be better off. The vast majority of podcasters seeking multiple monetization channels will also benefit from knowing that they can still be successful even if they’re not a celebrity with an outrageous licensing deal. If major corporations foolishly continue to follow Spotify’s lead and scale back their podcast investments, that could work in podcasting’s favor, too. It might hurt the industry in the short term, but in the long term it will return podcasting to its open and independent roots. Spotify can’t ruin the industry, because it never even knew what a podcast was.