While both Barack and Michelle Obama hosted individual podcasts on the platform, Spotify executives had hoped that they would play major roles in other podcasts that Higher Ground was producing for Spotify. As Puck reported last year, there was friction between Spotify and Higher Ground, the Obamas’ production studio. A Spotify source disputed this claim, saying that the shows were “successful series in terms of audience size, advertising, and ongoing listenership.” Ostroff, the owner of several NFTs, was also intent on creating an expensive Bored Apes Yacht Club podcast.Īnd not all of the celebrity partnerships were flourishing. People familiar with Spotify’s numbers said Michelle Obama, TikTok star Addison Rae, and Kardashian’s podcasts were initially successful, but churned users quickly after the first few episodes, rather than developing loyal audiences. But others at the company saw her as inexperienced in audio, and focused on big names over quality content. She appeared to deliver on the promise: Spotify signed deals with the Obamas, Kim Kardashian, and Prince Harry and Megan Markle. Ostroff’s biggest editorial bet, however, was on Hollywood talent, and on a podcast industry that has increasingly centered on packages created by talent agencies.The former executive had focused on signing big name celebrity talent, courting A-Listers and making overtures to non-podcasting celebs like Kerry Washington, Gigi Hadid, Bill Maher, and Jennifer Aniston. Its strategy of making most major podcasts exclusive to the platform was internally divisive: Creators felt that it kept shows from reaching the broader audience of people who preferred Apple Podcasts, YouTube, or Stitcher, and it limited advertising revenue. Spotify was still not profitable and had spent a billion dollars building a podcast empire that was increasingly bloated and had focused on acquisition of users over advertising sales. The company said in 2021 that it overtook Apple as the biggest platform in podcasts, and the company is similarly neck-and-neck with SiriusXM as the biggest podcast network, making the company both one of the biggest producers of podcasts and the place where most people listen to them.īut the challenges were growing. The acquisitions set off an arms race among competitors, but quickly took Spotify from an afterthought in the podcast space to the leader. Spotify purchased the Ringer in February 2020, and forked over huge cash for deals with Alex Cooper, the co-host of Parcast’s Call Her Daddy, and Joe Rogan, whose rambling, hours-long podcasts had somewhat confoundingly become the biggest hit in podcasting since Serial. To head up the division, in 2018 it had brought on Ostroff, who was then leading Conde Nast Entertainment. In early 2019, the company eventually settled on what it saw as three complimentary companies: Gimlet, a production studio that churned out popular and critically-acclaimed hits like Reply All and StartUp Anchor, a company that helps amateur and independent podcasters make shows and Parcast, a production studio that made primarily crime, science fiction, and mystery podcasts. Spotify spent a year hiring executives and podcast staff, building a backend to support the new formats, and canvassing for potential acquisition targets. The company saw podcasting as a rapidly growing space without middlemen. But Spotify’s profit margins were narrow, as a handful of record companies dominated the value chain in music. The massive success of Serial in 2014 had set off a gold rush in audio at the same moment that Spotify had emerged as the dominant force in music streaming powered by strong tech and a user-friendly interface. Spotify’s podcast push began in earnest in 2016, when Ek invited audio executives including higher ups at Gimlet to the company’s headquarters in Stockholm, Sweden to explain the emerging American podcast market.
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