The head of Spotify accepted that he got a “little carried away” and “over-invested” after a series of expensive podcast offers led the streaming service to a loss of £187million ($230m). On Thursday, the CEO of the podcast firm, Daniel Ek said “with hindsight… I over-invested” after he shared that the firm’s profitability had been hit by large investments in new content in addition to a major hiring spree.
In the last few years, the Swedish company has spent a huge amount of money on podcasts.
The expense includes an estimated £15million ($18million) three-year deal with Prince Harry and Meghan Markle.
Meghan Markle’s podcast Archetypes aired last year, with Prince Harry appearing in a “holiday special”.
However, its biggest deal was with US podcast star Joe Rogan, who was paid an estimated £162million ($200m) as part of an exclusive multi-year deal in 2020.
Mr Ek said: “’In hindsight, I probably got a little carried away and over-invested relative to the uncertainty we saw shaping up in the market.”
Spotify invested heavily in building up its podcast and audiobooks business in 2022, with operating expenses growing at twice the speed of its revenue.
However, the music entertainment giant soon hit a roadblock and struggled with finances.
Last week, it laid off about 600 staffers amid a shuffle at the top that saw Dawn Ostroff exit as chief content officer and advertising business officer.
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“And that is a sign of maturing. You go for growth first and then you seek efficiency.
“But, generally, you will see us focus on efficiency…not just growth at all costs.”