Spotify Shifts Strategy, Moving Away from Celebrity Signings and Costly Original Content.

Spotify Shifts Strategy,

Moving Away from Celebrity Signings and Costly Original Content When Spotify signed the Duke and Duchess of Sussex with an exclusive deal reportedly worth about $20m (£15.6m) in 2020, the royal couple were venturing into the commercial world, and podcasts were thriving. However, times have changed since then. Prince Harry and Meghan's brand has lost some of its shine, and Spotify is scaling back on big celebrity signings and expensive original content that have affected its financial performance.

Recently, Meghan's podcast became a prominent casualty when Spotify and Archewell Audio, the production company founded by the duke and duchess, announced their mutual decision to part ways. This move followed Spotify's previous deal with Barack and Michelle Obama's production company, which concluded last year. Since then, Spotify has laid off numerous employees, impacting its podcasting division, which had expanded through the acquisition of various podcasting companies costing over $400m.

Daniel Ek, a co-founder of the Swedish streaming company Spotify, played a pivotal role in its establishment in 2006.

During a conference call with financial analysts earlier this year, Spotify CEO Daniel Ek acknowledged the company's mistakes during its more than $1bn spending spree in its pursuit of establishing itself as a key player in the podcasting industry. Ek admitted to overpaying and overinvesting, emphasizing the need for future content deals to be approached diligently. Non-performing deals will not be renewed, while performing ones will be assessed based on their relative value.

Despite the strategic shift, Spotify is still open to expensive partnerships. The company resisted calls to sever ties with controversial host Joe Rogan, who reportedly received $200m in 2020 for exclusive listening rights. Rogan's show garners a substantial audience, with multi-hour episodes attracting an average of 11 million listeners per week. In contrast, Meghan delivered only 12 episodes of her Archewell Audio podcast last year.

The joint statement announcing the split expressed pride in the content created by the Sussexes and Spotify. The podcast, titled "Archetypes," made a significant impact, reaching the top of Spotify's charts in multiple markets, including the US and UK. The show featured interviews with celebrities like Serena Williams, Mariah Carey, and Mindy Kaling and even won a People's Choice Award.

However, crisis communications expert Mark Borkowski suggests that the show may not have garnered a large enough audience when Spotify reviewed the numbers. Borkowski emphasizes that compelling content is crucial, as failing to deliver a substantial audience diminishes the value and potential payout. The Duke and Duchess of Sussex still possess brand value in the media world, although it may not be as significant as before.

According to polling conducted for Newsweek earlier this year, the couple's popularity in the US waned following the extensive publicity surrounding their Netflix documentary series and the publication of Harry's memoir, "Spare." Borkowski believes that Harry and Meghan, who stepped back as working royals in 2020, must carefully consider their next move and what they can offer. The Spotify break-up represents a thread pulled from their brand, and if they want to prevent further unraveling, they need to make thoughtful decisions and learn from this setback.

A spokesperson for the Hollywood talent agency now representing Meghan stated that she is continuing to develop content for the Archetypes audience on another platform. Max Willens, a senior analyst at Insider Intelligence, notes that Spotify is not the only tech giant that made significant investments in talent that failed to live up to their monetary value. The era of extravagant deals ended last year as economic sentiment declined and share prices dropped.

However, despite challenges, Spotify's shares have risen nearly 90% this year as the company continues to attract users and expand its podcast catalog, which now exceeds five million titles. The company's focus on "efficiency" has been well-received by investors. In its recent announcement about the next phase of its podcasting business, Spotify indicated a shift toward