How Meghan’s Spotify departure signifies the platform’s strategic shift
In late 2020, Prince Harry and Meghan Markle’s Archewell Studios signed a multi-year exclusive podcast deal with Spotify, reportedly worth over $20 million. Now, after one season of Markle’s podcast Archetypes, they are parting ways. While the exact reason for the partnership’s end is under speculation, the lack of more content after three years may be a contributing factor. However, the couple may be looking to expand their podcasting footprint beyond the boundaries of Spotify’s platform. Markle is not the first celebrity to leave Spotify, and as the platform shifts its focus to independent creators, she will likely not be the last.
Spotify and the ex-Royals needed each other
Spotify built its audio service from the ground up, so it needed to invest in both infrastructure and content to launch the vertical. Big celebrity deals, like the one with Harry and Meghan, were part of Spotify’s strategy to establish a foothold in the market. Now, those investments appear to have paid off, as Spotify is the second most-used podcast platform, behind YouTube (MIDiA Consumer Surveys). On Harry and Meghan’s end, the podcast deal was likely part of their strategy to build a new business empire and retain cultural relevance after departing the Royal Family. That appears to have paid off as well, as Archetypes topped Spotify’s charts and won a People’s Choice Award for top pop podcast in 2022, beating Spotify’s other top show, Call Her Daddy. At this point, perhaps both sides have gotten what they wanted out of the deal.
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The cost of exclusivity
Now, Harry and Meghan may be weighing the pros and cons of Spotify’s exclusive strategy, which is a double-edged sword: while exclusivity can help bring audiences to a platform, it limits a show’s potential for audience growth. In fact, Spotify itself is now rolling back its exclusive strategy with some of its Gimlet shows and with Gen Z creator Emma Chamberlain. Especially now that more major platforms, such as YouTube, are growing their podcast divisions, there are more options for creators to host their content and reach a wider audience. For instance, the Obamas took their once exclusive podcast from Spotify to Audible, a decision rumoured to be driven by the desire to reach more ears. In January, author Brené Brown did not renew her exclusive contract with Spotify, either.
Spotify’s CEO, Daniel Ek, has stated that its “overspending” on podcasts is over; signalling a shift to focus on quality over quantity. Joe Rogan has not announced the renewal of his contract with Spotify, which was worth over $200 million and ends later this year. Moreover, Alex Cooper (whose $60 million podcast deal ends in 2024) and Kim Kardashian, (who has yet to announce a second season of her reportedly $100 million series) could potentially cost even more to renew. So, Spotify must decide which contracts are worth the price tag, especially as it shifts its focus to building tools for independent creators.
Spotify is changing its celebrity status
Spotify is aiming to better support independent voices — whose content it does not have to pay for — and relatedly, innovating its platform to aid in content discovery. Podcast discovery is the key to unlocking habitual listenership, which underpins the growth of the podcast market. While podcast discoverability is a challenge that faces all major platforms, Spotify now hosts over five million shows, actively expanding the already-oversaturated market. This makes it harder for any show, even a Spotify original, to become a hit. So, Spotify must ensure it can build independent voices to a level that breaks through its own noise.