When the Duke and Duchess of Sussex signed an exclusive deal with Spotify in 2020, it was said to be worth about $20 million (£15.6 million). At the same time, podcasts were absolutely thriving.
What a shift in the times.
Some people don’t like Prince Harry and Meghan anymore, and Spotify is cutting back on big celebrity signings and expensive original content that have hurt its bottom line.
When Spotify and Archewell Audio, owned by the Duke and Duchess of Sussex, announced that they would be parting ways as a result of a mutual decision, Meghan’s podcast became one of the most prominent casualties this week.
It came after Spotify’s partnership with the production company owned by Barack and Michelle Obama expired last year.
Since then, Spotify has laid off hundreds of employees, focusing on its extensive podcasting division, which includes a slew of podcasting companies it acquired for more than $400 million just a few years ago.
Daniel Ek, Spotify’s chief executive, admitted during a conference call with financial analysts earlier this year that the company had made some mistakes during the more than $1 billion spending spree that followed its 2019 push to become a key player in the industry.
He stated, “You’re correct in pointing out the overpaying and overinvesting.”
“We will be extremely tenacious by they way we put resources into future substance bargains,” he added. ” We obviously won’t renew those that aren’t working.
“And the ones that are performing, we will obviously look at those on a case-by-case basis in terms of the relative value,” the statement reads.
It is evident that Spotify still has the stomach for costly partnerships. Last year, it opposed calls to cut attaches with its questionable star Joe Rogan, who apparently got $200m in 2020 for giving the decoration elite listening privileges.
However, Mr. Rogan’s show airs several episodes that last more than an hour each week and are said to have an average audience of 11 million viewers.
In contrast, Meghan only released 12 episodes of her Archetypes podcast this past year.
The Sussexes and Spotify said in a joint statement that they were “proud” of the work they had done together.
And a slew of awards demonstrated why.
In six markets, including the United States and the United Kingdom, Archetypes’ debut reached the top of Spotify’s charts. A People’s Choice Award was also given to the show, which featured Meghan interviewing other famous people like Mariah Carey, Mindy Kaling, and Serena Williams.
However, crisis communications expert Mark Borkowski suggests that Spotify might not have found the show compelling enough when they looked at the numbers.
According to him, “It’s always about the content… clearly there hasn’t been a large enough audience for it.” No one will pay your fee if you are unable to deliver it.
According to Mr. Borkowski, there is no doubt that the duke and duchess are still valuable as media brands. However, it might not be as it once was.
According to a poll conducted earlier this year for Newsweek, the couple’s popularity in the United States decreased as a result of the media frenzy surrounding their Netflix documentary series and the release of Harry’s memoir Spare. The headline in Newsweek read, “The more Prince Harry and Meghan speak, the less Americans like them.”
Mr Borkowski says the pair, who ventured back as working royals in 2020, should “consider every option” about what they can propose in anything that they do straightaway.
He describes Spotify’s split as “a thread that’s been pulled out of the brand.” They really need to think hard if they want to stop it from unraveling. The most important question is whether they will learn from this setback or treat it as a passing blip.
This week, the Wall Street Journal was informed by a spokesperson for the Hollywood talent agency that is currently representing the duchess: On a different platform, Meghan is making additional content for the Archetypes audience.”
According to Max Willens, a senior analyst at Insider Intelligence, Spotify isn’t the only tech company that has spent a lot of money in recent years to sign talent who didn’t live up to the promises they made.
Those exhilarating times came to an end last year when shares fell and economic sentiment turned negative.
However, investors are appreciative of Mr. Ek’s promises to remain focused on “efficiency,” and Spotify shares are up nearly 90% this year as the company continues to add users and expand its podcast library to more than five million.
This month, the company announced the “next phase” of its podcasting business, indicating that it would encourage lower-cost third-party creators and increase investment in “always-on” programming.
According to Mr. Willens, “the platforms that have gotten into [podcasting] had to take some time to figure out what constituted a good investment.” He describes the duke and duchess’s and Spotify’s decision to part ways as an “understandable and natural part of that that process.”
“They achieved their goal of creating buzz and making headlines with those huge deals. The question of whether they were financially sound in the long run is a different one.
