29 June 2023

Is Harry and Meghan’s failure a sign the podcast bubble is bursting?

By Jimmy Nicholls

If the modern Royal Family can be understood as a maker of mass media, few of its products have proved as enticing as the spin-offs focusing on Prince Harry and Meghan Markle. And as with a long-awaited season finale, few payoffs will have felt as deserved as the axing of a $20m deal with Spotify revealed earlier this month.

While the decision was presented as mutual, Spotify’s head of podcast innovation Bill Simmons put it in more lopsided terms. As he told the audience of his own podcast, a more fitting concept for the couple’s podcast would have been ‘The Fucking Grifters’.

Word on the Wall Street Journal is that the couple just didn’t make enough podcasts to justify the price tag. And since signing the deal in December 2020, Harry and Meghan have produced only a baker’s dozen of podcast episodes, including a vacuous reflection on the first lockdown year and the Archetypes series, in which Meghan interviews celebrities to ‘investigate, dissect and subvert the labels that hold women back’.

Although the results are as seditious as the General Synod, they at least show that Markle can put in a shift. After sharing his insightful reflections on 2020, Harry hasn’t uploaded a single episode, the nearest he came to podcasting being a pitch to interview the likes of Vladimir Putin and Donald Trump about their childhood traumas.

If Russia’s president was unlikely to sign up to public psychotherapy with a British Royal, Harry could have offered his services to the Spotify executives that bet on celebrity signings. Having spent $1bn on acquiring studios and enlisting the likes of Barack and Michelle Obama and Kim Kardashian over the past few years, the streaming service is retreating from podcasts.

Early in June, Spotify announced it would lay off 200 staff from its podcast division. These cuts followed the January departure of Dawn Ostroff, the chief content officer who led the company’s adventure into podcasting.

Warning signs that some of the investments weren’t paying off included the Obamas severing ties with Spotify in April 2022. As with the Sussexes, Spotify weren’t satisfied that the former president and first lady had appeared on enough shows, while the Obamas reportedly echoed complaints from other podcasters that platform exclusivity limited the potential audience.

Then there is the rolling imbroglio of The Joe Rogan Experience, which at times has been the world’s most popular podcast. As Spotify’s star podcast signing, the deal with comedian and mixed martial arts pundit Rogan is now thought to have cost the company $200m. And since being revealed in May 2020, it has mired both parties in political rows over transgender rights and vaccine misinformation.

All this has been amid signs that growth in podcast listeners has levelled off since the lockdown boom in home entertainment. About 42% of Americans aged 12 or above listen to podcasts every month, according to Edison Research, only a percentage point above the figure for 2021, which followed years of growth.

Able to leave the house again, enthusiasm among podcast hosts seems to have similarly dwindled. Active shows on Apple Podcasts, defined as having released an episode within the last 90 days, have shrunk from 756,000 in June 2021 to 474,000 in May this year, according to Podcast Industry Insights.

While other metrics suggest podcasting will grow long-term, it’s not growing in a way that supports million-dollar vanity deals for celebrities who lack the necessary skills. And that much has been acknowledged by Spotify chief executive Daniel Ek.

In a recent call with financial analysts he said critics were right to call out ‘the overpaying and overinvesting’ in podcasts, adding that the company would be ‘very diligent in how we invest in future content deals’.

This isn’t to say that podcast producers will entirely forego the odd celebrity host, at least for their profile and contact book. But the experience of Spotify will likely push the industry back towards hosts that already know how to make compelling audio.

Conal Byrne, podcast head at iHeart, was quoted in Semafor criticising ‘quick-turn sales rep deals with large creators’ used by companies ‘to attempt to buy their way into the industry’. He added that several of his peers are now moving away from these strategies.

As for the Sussexes, they’re likely to remain in the content business. For one thing, Netflix is continuing to back the couple, citing the success of the Harry & Meghan series and the upcoming Heart of Invictus, which will follow athletes at the eponymous games. 

And despite doubts over the couple’s podcasting abilities, nobody can doubt their commitment to providing fodder for the British tabloids, Harry being engaged in three lawsuits against newspapers at the last count. The content factory remains fully operational. 

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Jimmy Nicholls is a trade journalist, politics commentator and host of the Right Dishonourable podcast.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.