#BizTok: Spotify's Buzz, Boom and Bust
Have bloated celebrity deals across companies like Netflix and Spotify happened at the expense of employees?
In last week’s Friday Drop, I included news on Spotify’s decision to cancel Meghan Markle’s Archetypes podcast. Well, the joint decision between Spotify Podcasts and Archewell Productions to mutually end the partnership.
Rumors that followed credited the cancellation to a failure to deliver second season episodes, production challenges, and claims that show producers, and not Meghan, were actually the ones doing celebrity interviews, with her voiceovers being added in post-production.
After two tumultuous years of layoffs, losses, and budget cuts, I think its important to take a look at these massive celebrity deals and consider how these big risk bets may have also gambled away jobs.
In 2020, Spotify began boom spending on celebrity development deals and major acquisitions.
Spotify’s $1 billion spend landed the platform exclusive deals with the likes of Joe Rogan and Michelle Obama and propelled its platform into a leading position in the podcast world — but at a very steep cost. The Verge
We are now at the three year mark, where many of these projects — lower-lift ones like podcasts and high-lift ones like film development — should be out to market, deep into their second seasons, and beyond. We should be seeing the return. The growth in viewership/listeners. The boom in earnings. The increase in audience appetite for the projects these companies so urgently, dramatically, and, in my opinion, recklessly invested in.
Instead, we have yet more layoffs.
This month, it’s nearly nearly 200 employees specific to Spotify’s Podcast division. It comes alongside news that the platform has vowed to do some belt-tightening and operate more efficiently this year.
Let’s look at Meghan and Harry’s big boom deals, which are Netflix and Spotify’s riskiest, against the backdrop of the last three years.
But first, Bill Simmons, Spotify’s head of podcasts, who sold his podcast network to Spotify in his own boom deal, had a little bit to say this week. I’ll unpack where he’s right, and where he’s wrong.