Much like Ariana and Sandoval, Spotify’s podcasting strategy is headed in a new direction

If you’re one of the more than 100 million people who listen to podcasts on Spotify, listen up: change is probably coming, if it hasn’t hit already. Because after going on a three-comma spending spree over the past few years, the audio platform has been working to shift its podcast strategy.

🎧📈 Background: Spotify’s podcast push began in earnest in 2016, Semafor reports. Over the next few years, the company spent north of $1 billion on podcasting, acquiring exclusive shows (ex: $200 million for The Joe Rogan Experience) and podcasting-related platforms like Anchor.

Some of these moves paid off, and some are yet to be seen. But regardless, the company’s strategy has started to shift.

• Last fall, Spotify laid off dozens of Gimlet and Parcast workers and pulled 11 original shows from production.
• It then began 2023 by axing a number of ad and business jobs under Podsights and Chartable, two podcast-focused ad-tech firms it had acquired the year before.
• High-profile execs, like content chief Dawn Ostroff (who steered Spotify’s podcast operations), have departed. So have many prominent podcast creators/hosts, including Barack and Michelle Obama, Brené Brown, and Esther Perel, who all exited deals with the platform.

And much like a hemophiliac with a paper cut, the bleeding doesn’t stop there. Just last week, the company sent a memo to employees announcing an upcoming layoff of 200 people, or 2% of its workforce, as part of a “strategic realignment” of its podcast division.

👀 Looking ahead… Spotify’s focus is moving away from paying for exclusive content to drive subscriptions (à la HBO), and towards fostering user-generated content and then monetizing it with ads (similar to YouTube). Reportedly central to this strategy is Megaphone, the ad-tech platform Spotify acquired for $235 million in 2020.