Spotify, the audio streaming platform, said on Tuesday that it would not renew its contracts for two critically acclaimed podcasts, “Heavyweight” and “Stolen,” the latest sign of the company curbing its podcasting ambitions as it struggles to become consistently profitable.
The shows, which are produced by Gimlet Media, the podcast studio Spotify acquired in 2019, will conclude their seasons and then have the option to shop their shows elsewhere.
“We are extremely proud of the teams who have supported these talented storytellers across each of the incredible episodes of ‘Heavyweight’ and ‘Stolen,’” a Spotify spokeswoman said, adding that the company will “work with the show creators to ensure a smooth transition for wherever these series go next.”
“Heavyweight” was hosted by Jonathan Goldstein and for seven seasons delved into the stories that shape people’s lives, seeking to help them create better endings. The show’s creators said on social media, “We’re so proud of everything we’ve made, and we’re hoping the show finds a new home in the future.”
“Stolen,” which received the Pulitzer Prize for audio reporting this year, was created by Connie Walker, a journalist who investigated her late father’s life and his experience and that of hundreds of other Indigenous children in Canada’s residential school system.
The decision came a day after Spotify announced that it would cut nearly a fifth of its work force, its third round of layoffs so far this year, as it seeks consistent profitability. The layoffs and curtailing of podcast content come as the technology industry reckons with the end of a decade of rock-bottom interest rates that propelled its growth.
Media companies have also suffered from a shortfall of advertising revenue, partly fueled by leaner advertising budgets and economic anxieties about a possible recession that never quite happened.
Those forces have led some large technology and media companies to maintain their investments in so-called “always on” shows that publish daily or weekly, and reduce their investments in limited run or seasonal series, which are harder to make profitable, said Nick Quah, the writer of HotPod, a popular newsletter about podcasts.
“All of this is happening, this economic instability, but the fact of the matter is, there’s still tons of podcast audiences,” Mr. Quah said. “There’s an existential way in which we’re talking about the podcast industry at this point, but audiences have continued to grow.”
A 2023 report from Edison research about podcast consumers found that podcasts have more mainstream listeners than ever who are receptive to podcast ads.
About 64 percent of the U.S. population older than 12 years old have listened to a podcast, and roughly 120 million people in the same demographic had recently listened to a podcast, the report found.
Spotify, like other tech companies, was principally driven during the pandemic by the pursuit of potential growth, Mr. Quah said.
The company paid $230 million for Gimlet Media in 2019 and around $200 million more for The Ringer, Bill Simmons’s sports media company, in 2020. Later that year, as consumers spent even more time listening to podcasts during the pandemic, Amazon bought the popular podcast studio Wondery for $300 million, while SiriusXM paid $325 million for the platform and publisher Stitcher.
But then the boom, or at least the apparent potential to capitalize on that boom, faded, and Spotify was left with hundreds of millions of dollars worth of product.
Eric Nuzum, a podcast strategist and co-founder of the independent studio Magnificent Noise, said that “you have to separate Spotify away from the rest of the podcast industry” because the company has a different business model with two main revenue streams: subscriptions and advertising. And for years, the company was trying to figure out which one podcasting was supposed to serve, Mr. Nuzum added.
Spotify made those big investments and became “the 800-pound gorilla,” Mr. Nuzum said.
It quickly became clear that while much of the tech industry likes to “fail fast” and “move quickly,” that doesn’t work with journalism that can take months or years to create, and needs to build an audience or brand, Mr. Nuzum said.
Spotify’s past decision to keep some podcasts exclusive on the platform — rather than openly available on the internet and general podcasting apps — also killed much of the potential for reaching and growing audiences, Mr. Nuzum said.
Now, Spotify appears to be honing in on a strategy that they believe will make a podcast successful: bringing in celebrities with built-in fan bases, such as Bruce Springsteen, Barack Obama, Meghan Markle and Joe Rogan, whose deal was said to be worth more than $200 million.
“The problem is you pay all the money to acquire the talent and put no investment into making the product good,” Mr. Nuzum said. “And I think that they got burned by that time and time and time again.”
Adam Satariano contributed reporting.
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