Last week’s layoffs at Spotify were a jolt for the audio industry. Eleven shows were axed, and employees were blindsided by the news. The company framed it as a small change, with Spotify spokesperson Grey Munford saying that less than five percent of original podcast staffers were cut or reassigned. But the pain is being felt acutely at Gimlet and Parcast — nearly one-third of the members of each studio’s union were cut.
The layoffs come at a precarious time. After years of growth in audio, some companies that took a step (or leap) into podcasting are scaling back in the face of worsening economic conditions. In September, CNN laid off some of its podcast employees. Last week, Axios reported that radio giant Audacy is looking at selling off hitmaker Cadence13 for quick cash. Companies are starting to make choices, and they are sticking with the things that work.
Gimlet and Parcast were among Spotify’s earliest podcast acquisitions, and once provided the foundation of its programming. But as Spotify brought on headline talent like Joe Rogan and Alex Cooper, Gimlet lost its top show and failed to regain ground. Parcast continued to churn out hits like Serial Killers and Conspiracy Theories, but its structure left employees in a vulnerable position. Parcast’s writers and producers work across shows so that no one program is team-dependent. It’s why last week Spotify could lay off some of Parcast’s most senior employees who contributed to the network’s top shows. Morale is, understandably, low.
“I would say nobody trusts their job security anymore,” one laid-off Parcast employee, who asked for anonymity because of potential retribution, told Hot Pod. “I think it feels like because we’re all interchangeable, it doesn’t matter what show you’re on. It doesn’t matter what you’re doing. Everybody is dispensable.”
As Spotify gets deeper into the podcast space, it is figuring out what works for its structure: Meghan Markle, Bill Simmons, and Batman. I don’t anticipate Spotify will invest less in podcasting — it needs podcasting to succeed in order to escape the expensive clutch of the music industry. But I do expect it to double down on the personality-driven shows that have come to dominate the charts. Where, then, does that leave traditional studios like Gimlet and Parcast?
Today, I take a look at one issue that has become particularly divisive in all of this: Spotify’s practice of making its podcasts exclusive.
What’s exclusivity got to do with it?
The day after the layoffs came down, Gimlet and Parcast’s unions laid the blame firmly on decisions made by Spotify higher-ups. “Their decision to make most of Gimlet’s and Parcast’s shows exclusive caused a steep drop in listeners — as high as three-quarters of the audience for some shows. Yet the company did little or nothing to staunch the bleeding,” the unions said in a statement on Friday. “Shows languished without marketing support, and teams were not given clear audience goals to meet. The strongest indication these employees received that their shows were not meeting Spotify’s goals was when they were laid off yesterday.”
That sentiment was echoed by Dr. Ayana Elizabeth Johnson, co-creator and former co-host of Gimlet’s How To Save a Planet, perhaps the highest-profile show to be canceled last week. “Spotify invested zero in building the show’s audience, then forced us to go exclusive to Spotify, and then canceled it b/c it didn’t build a big enough audience…” she tweeted on Saturday.
Munford pushed back on the notion that exclusivity can harm a show’s performance, pointing to the hits on Spotify’s charts. “The four top shows on Spotify and eight of the top thirty podcasts in the US are exclusives,” he said in an email, “the exclusive model is clearly working well.”
He has a point — Joe Rogan, Meghan Markle, and Alex Cooper are just a few of the podcast hosts who have thrived while being exclusive to Spotify. But with their massive fanbases, which predate their Spotify shows, people would seek them out no matter where they are. If they are on Spotify, their listeners will stream them on Spotify. If they ever jump ship to another platform, their audience will follow them. Those shows fall under Spotify Studios, which saw no layoffs last week.
Those personality-driven shows are fundamentally different than the kind of topic-specific shows that were cut last week. How To Save a Planet and Medical Murders don’t drive headlines with spicy gossip or celebrity guests. Even if those shows have loyal listeners, they are the kind of podcasts people might discover while browsing for some insight about climate change or a new gruesome tale. Spotify is one of the two biggest podcast platforms (YouTube being the other), but it still only has about a quarter of the market. For podcast listeners who don’t use Spotify, those shows might as well not exist.
Notably, The Ringer did not see any layoffs. And though it is owned by Spotify, its shows are not exclusive to the platform. Its hit sports and pop culture shows like The Bill Simmons Podcast and The Ringer-Verse can be accessed on Spotify rivals like Apple Podcasts and Google Podcasts. The Ringer’s exclusion from last week’s cuts are likely multifold — it has managed to grow a stable of hits beyond its flagship podcast, unlike Gimlet, and it has a number of known commentators people actively seek out, unlike Parcast. Plus, Spotify CEO Daniel Ek has not been shy about his love for sports content; he has tasked Ringer founder Bill Simmons with expanding the company’s global sports offerings. But The Ringer has an inherent advantage over Parcast and Gimlet in being able to pull in listeners (and ad dollars) across platforms. You wouldn’t cut a show that meaningfully contributes to ad sales. You might cut a show that isn’t driving listeners to the platform.
The pressure is on for Parcast and Gimlet to make it work within Spotify’s walled garden. Parcast already has five shows in Spotify’s top 100, but clearly that is not enough – further shows considered to be weak links could result in a further reduction in staff, which reverberates across its programs. Gimlet has shown it can still make great shows (How To Save a Planet is proof of that), but it has to find a way to generate buzz without actually having access to podcasting’s full audience. But the burden should not lie entirely with the studios. If Spotify wants Parcast and Gimlet to succeed within its structure, it has to find ways to promote and drive listeners to shows that many people can’t access.
Spotify is not going to back off exclusivity – being the home of hit shows like The Joe Rogan Experience and Batman: Unburied has undoubtedly contributed to its rise as the most important podcast company in the world. Amazon Music has taken note, signing hit shows like SmartLess and My Favorite Murder with week-long excusivity windows, and taking recent smash MrBallen completely exclusive. But, to the concerns of those at Gimlet and Parcast, it may not be the right tool for every type of show.
That’s all for today, I’ll be back next week.