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If you happened to miss the news, SXM Media recently cut 8% of its workforce, with about 475 people let go in a single day. This news comes with the backdrop of mass layoffs starting the year at Vox Media (7% of workforce - 130 people), Spotify (6% of workforce - 600 people), and NPR (10% of workforce - 100 people). As an 11-year alumni of SiriusXM, it has been particularly unnerving watching as many of my friends and former colleagues post messages about their sudden layoffs.
Beyond the fact that I know and empathize with many of the talented people who have been let go, these recent layoffs have been distressing to many of us in the podcast industry, because these are all companies who had previously made major investments in the future of podcasting and now they are cutting many of those same resources.
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First, let’s look at the media companies that have made the biggest headlines with their layoffs. It is well documented that Spotify has admitted to overpaying for major podcast companies and celebrity influencer-driven content, while a similar argument can be made for SXM Media, who spent a lot of money on deals with Crooked Media, Conan O’Brien’s Team Coco, and Quentin Tarantino, while also recently announcing the 2023 opening of what I can only assume is an expensive new “state-of-the-art broadcast center” in Miami. Sticking with SXM, we must also factor in the fact that over the last few years they’ve acquired multiple media companies including Pandora, Stitcher, Simplecast and Adswizz, meaning that staff consolidation was bound to happen at some point.
When you couple Spotify’s major podcast technology, network and show acquisitions (totaling over $1 billion in the past 4 years) with the strategy of making a lot of that content exclusive to their app, it was inevitable that those audience sizes would shrink and the advertising dollars along with it. But Spotify’s strategy is to get you onto their app and to stay there as long as possible. So they had no incentive to change that strategy until they realized how much money they were hemorrhaging, which led to them dropping ‘underperforming shows’ and staff, even though it was the Spotify Exclusive strategy that made them underperform in the first place.
NPR, a public media company whose revenue is largely driven by donations, has seen that revenue take a major hit due to the pandemic and economic fluctuations. And similar to Vox Media, SXM & Spotify, these companies have overheads that cover more than just the space of podcasting.
So we shouldn’t look at these massive layoffs as an indicator that podcasting has failed, just that these major media companies have had to do some consolidation and course correction to satisfy some of the other decisions they’ve made. But I also caution you not to just look at this as a media issue either – even though it’s frustrating that we don’t see as many similar headlines about the TV and radio industry who have been facing bigger advertising issues than the podcasting industry. Ultimately, we’re just facing a rough period in overall employment from anything tech-related as there’s been recent news of layoffs from companies like Meta, Google, Microsoft, Yahoo, Disney, Zoom and Dell.
Podcasting is still comparatively young when put up against its media counterparts, which means there is already apprehension about its longevity and economic viability for investors. So, these kinds of headlines create an echo chamber that keeps many of the small to medium size companies from being able to bring in investment money that can continue to allow us to take podcasting further into the mainstream.
There are many companies and independent podcasters that are doing just fine, especially when you factor in Triton Digital’s US Year-End Podcast Report showing that podcast downloads increased by 20% in 2022, and the Interactive Advertising Bureau (IAB) projecting an 8.1% increase in ad spending on podcasts in 2023.
I dare say the future is bright for podcasting! But we need more articles letting everyone know the opportunities that are ahead of us.
I agree with you! The future is bright. I think we see this every time there's something new and big networks and companies jump in and throw lots of money at it in order to get a quick, high return. I'm just sad and sorry that it's the employees who suffer the most through layoffs or worrying about their job security.
Thank you Chris (& Corey) for this needed article!!
I agree with you! The future is bright. I think we see this every time there's something new and big networks and companies jump in and throw lots of money at it in order to get a quick, high return. I'm just sad and sorry that it's the employees who suffer the most through layoffs or worrying about their job security.