Spotify experienced a financial hit of €39 million linked to its podcast ventures and the termination of several high-profile contracts, according to the company’s Q2 financials.
The Swedish streamer has been scaling back its podcast division lately after allocating millions to its expansion. The company and Archewell Audio, the podcast production company of Prince Harry and Meghan Markle, mutually decided to end their $20m deal in June.
The solitary podcast that the Sussexes created for Spotify, Archetypes, was discontinued after its first season. Performance targets set for the full payout of the deal were reportedly unmet by the Duke and Duchess. The specifics of the commercial arrangements remain undisclosed.
Of the losses, Spotify CEO Daniel Ek told investors, “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.” The podcasting losses contributed to Spotify’s growing €302m loss, which also included charges for reducing its office space amid job cuts.
Despite the bad news, Spotify reported 10 million new paying users in Q2, reaching a total of 220 million subscribers. With ad-supported users included, the app is now used by 550 million people monthly. Revenue increased by 11% to €3.2bn, though its losses broadened from €125m to €302m. Spotify noted its adjusted operating loss, excluding one-off events, declined to €112m.
To address these challenges, Spotify announced a $1 per month increase to its primary monthly subscription plans this week, the first increase in the company’s history.
