\n<\/p>\n
It seems like the writing is on the soundproofed wall: The podcast boom is over, and this week\u2019s news is evidence. Spotify laid off 17% of the company<\/a> \u2013 its third round of layoffs this year \u2013 and canceled two highly acclaimed shows, including a winner of the Pulitzer Prize for audio reporting. But as a whole, the podcast industry didn\u2019t fail. It\u2019s just that Spotify took a billion dollar swing and whiffed, and now, podcasters themselves have to navigate the fallout.<\/p>\n \u201cSpotify has kind of set the terms of the quote-unquote \u2018health\u2019 of the podcasting industry based on their actions as a tech company,\u201d said Eric Silver, co-founder and head of creative at Multitude<\/a>, an independent podcast collective. \u201cBut Spotify\u2019s choices don\u2019t have anything to do with me. It\u2019s just that they keep failing so publicly, and now everyone thinks podcasting is dead, which really frustrates me.\u201d<\/p>\n When outsiders think of podcasting, they may imagine mega-viral hits like \u201cSerial\u201d or long-standing institutions like \u201cThis American Life.\u201d But for the long tail of podcast creators \u2013 those who make podcasts for a living, but aren\u2019t getting multi-million dollar deals from Amazon, Apple or Spotify \u2013 the industry isn\u2019t as imperiled as it seems. And yet, Spotify\u2019s shadow looms so large over the podcasting industry that it\u2019s impossible for its failures not to reverberate.<\/p>\n In 2021, a year that saw venture capital flowing like champagne at a Gatsby party, Spotify CEO Daniel Ek told Forbes<\/a> that he wanted his company to be like the Instagram or TikTok of audio.<\/p>\n \u201cEveryone underestimates audio. It should be a multi-hundred-billion-dollar industry,\u201d Ek said at the time. \u201cAudio is ours to win.\u201d<\/p>\n In the last handful of years, we watched as Spotify acquired too many podcasting companies to count \u2013 Gimlet, The Ringer, Anchor, Parcast, Megaphone \u2013 and then courted big names from Joe Rogan, to Alex Cooper, to Prince Harry with eight- and nine-figure deals. The company dumped over a billion dollars into its efforts to corner podcasting, but now has canceled over a dozen<\/a> shows<\/a> from the studios it spent so many hundreds of millions to acquire, like Parcast and Gimlet, which have since been combined<\/a> into one entity and decimated.<\/p>\n \u201cIn hindsight, I was too ambitious in investing ahead of our revenue growth,\u201d Ek said after Spotify laid off 600 people<\/a> in January.<\/p>\n After acquiring Gimlet and Parcast, Spotify made most of the networks\u2019 shows exclusive to the Spotify platform. In theory, this decision would force the listeners of these popular shows to download Spotify in order to keep listening every week \u2013 and, hopefully, some of those listeners would convert to paid subscribers. But, according to the Gimlet and Parcast unions, this strategy backfired. Some shows lost more than three quarters<\/a> of their audiences after being converted to Spotify exclusives.<\/p>\n \u201cSpotify told show teams that their podcasts were being canceled because of low numbers,\u201d said a joint statement<\/a> by the Gimlet and Parcast unions, posted after a round of layoffs in October 2022. \u201cBut decisions Spotify leadership made directly contributed to these low numbers.\u201d<\/p>\n Across the whole creator economy, which includes podcasting, there\u2019s a growing disconnect between the reality of the industry and the stakeholders that invest in it. Last year, the amount of money invested in creator economy companies dropped around 68%<\/a> from the first to third quarter. But this statistic doesn\u2019t actually say anything about the viability of creators\u2019 careers. It means, quite literally, that fewer startups are raising money.<\/p>\n This isn\u2019t necessarily a bad thing. During the funding boom of 2021, my inbox was flooded with pitches from creator economy startups seeking press about their latest funding rounds. Some of these companies were exciting, but many of them confused me \u2013 as a creator myself, I couldn\u2019t imagine myself or my friends in the industry using many of these products. As SignalFire partner Josh Constine told me<\/a> earlier this year, \u201cCreators aren\u2019t sophisticated enterprise software buyers, nor do they have software integration teams.\u201d In other words, VCs had thrown money at companies that didn\u2019t actually solve any problems for creators\u2019 businesses. So, I wasn\u2019t surprised that when market conditions tightened, the companies that seemed to only want to capitalize on the creator economy hype were no longer being funded.<\/p>\n \u201cA media company needs to have the goal of making enough money for it to survive,\u201d Silver told TechCrunch. This might seem intuitive \u2013 surely, a business should try to turn a profit. But that\u2019s not how the world of venture-funded startups works. Spotify, for example, has only reported quarterly profits a handful of times, because its business has prioritized continual growth over returns. The company is not at all unique in that way.<\/p>\n \u201cIt\u2019s critical for companies to \u2018read the market,\u2019 and right now, the market values efficient growth and doing more with less instead of maximum growth with easy capital,\u201d Creative Juice founder Sima Gandhi told TechCrunch<\/a> this summer.<\/p>\n This \u201cmaximum growth\u201d mindset has poisoned venture-backed digital media companies like Buzzfeed, which descended<\/a> from a shining star to an IPO embarrassment<\/a>. The \u201cmiddle class\u201d of podcasters can\u2019t rely on Spotify, and other media workers can\u2019t rely on failing media conglomerates like G\/O Media<\/a> and Vice<\/a> anymore. Over the last few years, worker-owned media outlets like Defector, Aftermath and 404 Media have begun cropping up, often founded and staffed by journalists who had been repeatedly laid off from mismanaged media companies. Now, the podcasting industry is facing the same reckoning as Spotify\u2019s losses prove that growth can\u2019t take priority over sustainability. Already, podcast studio Maximum Fun<\/a> has adopted a worker-ownership co-op model, and as podcasters continue to lose trust in big corporations like Spotify, we\u2019ll see this trend continue.<\/p>\n \u201cSpotify is not all of podcasting, although they act as if they are, and make choices as if they\u2019re the only one in the room,\u201d Silver said. \u201cPodcasting is not dead.\u201d<\/p>\n<\/p><\/div>\n