“People are willing to do almost anything other than read at length. It requires patience: an atrophied muscle in the smartphone age. At the same time, no one relishes being ignorant or incurious. The desire for self-improvement out there is real. The podcast boom shows that we want erudition without effort: the palm without the dust.
Financial Times.
Podcasts are seemingly a quick fix for those who don’t want to read books. That is why we have so many authors on the podcast circuit. It is a virtuous cycle of self-promotion and self-improvement. Like most pandemic trends that saw us embrace new technologies and behaviors, podcasting has entered the “digestion” phase. It is time to absorb the excessive growth of the pandemic years. And be as it might be, it seems that the go-go days for podcasting might be behind the sector, which is getting a sanity check thanks to Spotify reigning in its ambitions.
To give you a quick overview of the state of podcasting, there are about 465 million podcast listeners, a number that will increase to 505 million by the end of 2024 — a clear sign that the market is hitting a maturation, at least in the United States, which has about 100 million active listeners. At the end of January 2023, there were five million podcasts with 70 million episodes.
Spotify’s podcasting ambitions started with a desire to escape the record companies’ stranglehold on the company. It had to figure out how to increase the time spent on the platform without forking over all the money to the record labels. It bought Gimlet, Anchor, and Parcast. It bought Bill Simmons’ The Ringer for $200 million. It signed Joe Rogan to a $100 million exclusive. It signed up the Obamas, Prince Harry, and Megan Markle. It went from nothing to becoming bigger than Apple in podcasting. It was an expensive expansion for the company.
Some in the media believe that “Spotify was a one-company podcast bubble.” The company got a reality check, thanks to a slowing economy, and since then, it has lowered its ambitions. The company spent a billion dollars on podcasts by stars and now has advertising revenue of $1.5 billion, though how much podcast-related advertising brought in 2022 is unclear. In 2021 it was estimated that advertising brought in only $200 million.
Spotify financial chief Paul Vogel told the Financial Times that the “[Podcasting] was a big drag on our business in 2022.”
“Spotify CEO Daniel Ek acknowledged his error and told investors: “
“In hindsight, I probably got a little carried away and overinvested relative to the uncertainty we saw shaping up in the market. So we are shifting to focus on tightening our spend and becoming more efficient.”
Spotify made the classic mistake all leaders make: they brought in big-ticket experts who know how to spend big bucks to attract talent—going Hollywood results in headlines but not enough listeners and dollars. In reality, Spotify, like many media companies with the right ideas but with the wrong executives, forget their core value proposition — their audience and the ability platform to turn anyone into a star.
This push into podcasting has ruined the Spotify experience. Even though I had been on Spotify from day one, I got sick and tried getting Joe Rogans, and the Harry-Megan pushed into my feed. Instead, I no longer use Spotify and prefer a combination of Qobuz (for HiFi) and YouTube Music for algorithmic discovery.
As for podcasts, I find small and unique podcasts through friends. If I find something Spotify exclusive, I ignore it — podcasting started an open movement not to be owned by a single company. We had radio for that kind of exclusive nonsense. I enjoy specific podcasts recommended to me by friends on Overcast.
February 12, 2023. San Francisco