Writedown follows the loss of 200 jobs in the streaming platform’s podcasting division
The Duchess of Sussex’ Archetypes podcast ended after just one season
Spotify has taken a €39m (£34m) hit on podcasts after ditching a string of deals including its high-profile tie-up with the Duke and Duchess of Sussex.
The music streaming service revealed that it had taken the writedown in the second quarter of the year as a result of “write offs and contract termination” costs “in connection with rationalising our podcast content portfolio”.
Spotify has recently been making heavy cutbacks in its podcasting division after spending millions expanding into the market.
Last month Spotify and Archewell Audio, Prince Harry and Meghan Markle’s podcast production company, agreed to mutually terminate a $20m (£16m) deal they signed in 2020.
The Duke and Duchess reportedly failed to meet performance targets to secure the full payout. The commercial arrangements have not been disclosed.
Archetypes, the only podcast that the Sussexes made for Spotify, was cancelled after one season. The partnership was later broken up and Bill Simmons, an executive and podcast host at Spotify, has called the pair “f-----g grifters”.
Speaking to investors, Daniel Ek, Spotify’s chief executive, said the company was “stepping out of some deals and relationships that haven’t worked out” and admitted that in some cases “we overpaid relative to what we should have done”.
Spotify made a series of large investments in podcasting to draw celebrity hosts like Joe Rogan onto the platformCREDIT: SYFY/Getty Images Contributor
The podcasting write down contributed to a widening €302m loss for the music streaming service, with the company also taking charges on reducing its office space as it makes job cuts.
Spotify invested heavily in podcasts as part of an expansion beyond music, signing up the Sussexes as well as stars such as US host Joe Rogan.
However, the expansion has failed to yield the hoped-for increase in advertising revenue and Spotify laid off 200 staff in its podcast division last month as well as cancelling six true crime podcasts.
It has struggled to make a profit from the operation.
Spotify signed up 10m new paying users in the second quarter of the year, hitting 220m subscribers. Including advertising supported users, it now has 550m people using the app every month.
Revenue grew by 11pc to €3.2bn. Its losses widened from €125m to €302m. Spotify said its adjusted operating loss, which strips out one-offs, fell to €112m.
The streaming service raised the price of its main monthly subscription by £1 a month to £10.99 earlier this week, the first such rise in its history.
It is under pressure from record labels to increase payouts to the industry.
Spotify shares were down 6pc in pre-market trading in the US.