COMP NEWS – By all accounts, podcasting continues to grow as a popular industry garnering more listeners each year. But you wouldn’t know it just by looking at one of the industry’s top companies, Sppotify, which is laying off workers and canceling critically acclaimed shows that have won journalistic accolades.

It was just a few short years ago that Spotify decided to conquer the podcasting world.

Having yanked the mercurial music business from the iTunes era into the epoch of subscription streaming, Spotify recentered its ambitions around audio—meaning, anything you can listen to. It poured $1 billion into this vision. And podcasts were the first stop en route to aural domination.

The Swedish streaming giant bought three media and podcasting companies—Bill Simmons’ podcast-heavy outfit the Ringer, along with the podcast studios Gimlet and Parcast. But it also doled out megacontracts to high-profile podcasters like Joe Rogan ($200 million) and Call Her Daddy’s Alex Cooper ($60 million) as well as with foolishly steep deals to podcast-curious celebrities such as royals Harry and Meghan ($20 million), ex–White House occupants Barack and Michelle Obama ($25 million), and the ubiquitous Kim Kardashian (still-unknown millions).

Despite this maybe-reckless spending, Spotify is doing just fine, thank you very much. The company turned its first-ever profit in this year’s third fiscal quarter, and its stock has risen 137 percent since the start of the year.

But Spotify’s lurch into podcasting left casualties along the way. Spotify laid off 600 people in January, before its “strategic alignment” in June that claimed 200 podcast-specific roles, in the process consolidating its two studios into one. And just this week, the bloodbath continued: Spotify said on Monday it’s slashing another 1,500 jobs across divisions and ending two popular and critically acclaimed podcasts, Heavyweight and Stolen, the latter of which won a Pulitzer Prize in May. Lydia Polgreen, Gimlet’s former managing director, wrote on Threads, “If you can’t make a go of it with these incredible shows you are simply bad at podcasting.” Somewhat cruelly, Spotify stock rose 7 percent on the news.

The lurch in the podcast industry seems almost contrary to data on revenue and popularity, which shows that podcasts are still highly popular with listeners.

By just about every metric, podcasts are still gaining popularity with listeners. One hundred and thirty million Americans will have listened to a podcast each month of this year, according to Insider Intelligence, which expects that figure to jump to 150 million by 2027. Meanwhile, in the decade since podcasting’s Serial moment, casuals have become die-hards: In 2015, weekly podcast listeners spent about four and a half hours listening to podcasts, according to Edison Research. Now that figure is north of nine hours a week.

Melissa Kiesche, senior vice president of research at Edison, continues to see growth both in the share of Americans listening to podcasts and how much time they’re dedicating to podcasts. “Both monthly and weekly listenership reached their highest levels this year,” she says.

Ad revenue is growing too. In 2022, podcasts generated $1.8 billion in ad revenue in the U.S., up 26 percent from the year prior, says the industry body Interactive Advertising Bureau. That’s drastically outpacing the 11 percent growth for the rest of the online ad sector. Furthermore, the IAB expects that revenue to double to about $4 billion by 2025.

Advertisers have reduced spending this year amid rising prices, rising interest rates, and still-unrealized fears of an economic recession, but it seems to be more of a pullback from runaway COVID-era spending rather than a full stoppage.

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