Spotify Takes a Sharp Turn With Its $1 Billion Podcast Division
The company is shifting away from exclusives to capture more ad revenue.
Inside Spotify’s “Pod City.”
Photographer: Genaro Molina/Los Angeles Times/Getty Images
Over the past four years, Spotify Technology SA has announced a succession of splashy deals showing off how much money it’s willing to spend to become a dominant player in the burgeoning podcast industry. In 2019 it paid over $400 million for two podcast studios and a company that makes podcast creation software, then spent hundreds of millions more signing the world’s biggest podcasters, most notably Joe Rogan, to exclusive deals. It even built a podcast campus in Los Angeles with 18 studios, a theater and an indoor stage, dubbing it “Pod City.” Altogether, the music streaming service invested more than $1 billion in podcasting.
That strategy has taken a sharp turn as Spotify tries to mollify investors looking for signs it can start earning consistent profits. On June 5 the company announced that it was laying off 2% of its workers, or 200 people, following a previous round of cuts in January, and that the job cuts would primarily be in its talk division. Sahar Elhabashi, vice president for the podcast business, called the latest losses a “difficult but necessary decision” that’ll allow the company to enter its “next chapter” in podcasting.