Spotify loses out on £34m after podcasting 'write offs' with high-profile contracts including Harry and Meghan
25 July 2023, 22:39
The streaming giant has taken a multi-million dollar hit from its podcasts after scrapping a number of high-profile contracts, including with Harry and Meghan.
Spotify revealed its major £34m (€39m) write down in the second quarter of the year, but attributed the fall to “write offs and contract termination” costs “in connection with rationalising our podcast content portfolio”.
It comes after it was announced in June that the Swedish company planned to cut around 200 jobs, equivalent to approximately 2% of its workforce, as part of a major restructuring effort within its podcast division.
The loss from podcasting was part of a wider €302m fall for the music platform, as reports suggest the company is working to reduce office space while it slashes jobs, The Telegraph reported.
Earlier this year, CEO Daniel Ek admitted that he may have gone overboard with spending, as the company suffered a staggering €430 million loss in the previous year.
Over the past few years, Spotify has pumped billions of euros into the podcasting realm, securing deals with big-name stars like the Sussexes and Joe Rogan.
Harry and Meghan initially signed a three-year deal to produce content for Spotify, with Meghan hosting the first series called Archetypes.
However, the Duchess of Sussexes’ podcast series failed to make waves, while the Joe Rogan deal, rumoured to be worth $200 million, was mired in controversies as the host spread Covid vaccine misinformation and used a racial slur.
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A joint statement from Spotify and Archewell Audio, which is Meghan and Prince Harry's production firm, said the two were "proud of the series we made together" but they had "mutually agreed to part ways".
The Sussexes had reportedly signed a $20m deal with the streaming giant in 2020, and the show featured Mariah Carey and Serena Williams.
After they "parted ways" with the streaming giant, Bill Simmons, who is Head of Podcast Innovation and Monetisation, was quick to hit out at Prince Harry and Meghan Markle.
"The f***ing grifters. That's the podcast we should have launched with them,” he said in one of his own podcast episodes.
Daniel Ek, Spotify’s chief executive, said the streaming giant was “stepping out of some deals and relationships that haven’t worked out”, and even admitted “we overpaid relative to what we should have done”.
It comes after the music company announced plans to raise the price of monthly subscription fees across 50 countries on Tuesday.
