The Spotify Story: What I’ve Learned and What I Don’t Know About the Music Industry Overhire During the Spotify Pandemic
Despite its popularity, the company has struggled to turn consistent profits. A bad year began in January, when the company cut its workforce by 6 percent, followed by 2 percent in June. Even as the world’s most recognizable music streaming service, Spotify is plagued by an unreliable business model, one in which record companies sit back and rake in royalty payments while artists can struggle to bring in enough cash.
Ek believes thatSpotify is taking steps to rightsize as a result of overhiring during the pandemic. But Spotify’s high cost to license music adds to its financial strain. “The cost of doing business is huge for streaming companies,” Bird says.
The safety of our community, including our DJs and creators, is a priority for us. “Brand safety at Spotify has always been a team effort and will continue to be overseen by leaders across our product and policy orgs.”
There was no executive dedicated specifically to brand safety at the company. The VP of product Per Sandell and the Director of monetization product marketing were cited as key executives in this space when I asked Styles about this.
Spotify is not done with acquisitions — it’s just too late to start making podcasts, right? An executive note from Styles
The note I read was that after so many mergers, the company is not done with acquisitions.
He writes that this leaner structure will allow them to invest their profits back into the business. Every investment and initiative becomes more significant and offers more opportunities for success with a more targeted approach.
When I asked Styles if “investments” meant more mergers and acquisitions, he said they would allocate capital towards the highest return opportunities for the business.
The advertising side is experiencing steep cuts, despite CFO Paul Vogel pointing to ad revenue growth as a bright spot in last quarter’s earnings. Among the executives let go is Dave Byrne, who joined Spotify last year as the director of global advertising platform integrity after leading brand safety at TikTok. The point of brand safety is to make sure that a company’s ads don’t end up on podcasts or playlists with which they don’t want to be affiliated.
In his letter to employees, Ek said that “we still have too many people dedicated to supporting work and even doing work around the work rather than contributing to opportunities with real impact.” The impact in question doesn’t mean awards or an audience. It means margin. No matter how much money is put into the show, no matter how much time is put into it, it’s not worth it.
The answer, at least within Spotify, is to make a high-margin show — something that is straightforward to make, always on, and has broad appeal. You can see that in the company’s support of interview shows like anything goes with emma chamberlain and Call Her Daddy. To make the Sopranos of podcasting, you need time and resources, neither of which are on offer right now.
If Spotify was ever serious about making in-depth narrative podcasts, it certainly isn’t now. Among its many cuts, the company has decided to cancel Heavyweight after it wraps up its current season. It is one of Gimlet’s flagship podcasts and a beloved show among people in the industry. It is also cutting investigative podcast Stolen, which Gimlet launched in 2021 and went on to earn the Pulitzer Prize in Audio Reporting and a Peabody Award for it this year.
I have hope that this is not the end for both shows, as they can be shopped elsewhere. These are the kinds of shows every podcast studio wishes they had and the kind of content Spotify wanted when it got into podcasting in the first place. The reaction on podcast X / Twitter / whatever has been unforgiving.
Source: Spotify’s not going for Pulitzers anymore
Can We Rethink Our Avatars? CEO Daniel Ek Explains the Decision to Reconsider the Future of the Company Costs and Operating Results?
The recent positive earnings report and our performance will make a reduction of this size feel large for many. In a letter to employees, CEO Daniel Ek said that the company debated making reductions in the future. “Yet, considering the gap between our financial goal state and our current operational costs, I decided that a substantial action to rightsize our costs was the best option to accomplish our objectives.”