Under pressure from investors to meet that profitability goal, the company in June laid off 200 employees, about 2% of its workforce, and culled shows to focus on a more limited stable of original and exclusive content. Spotify said it is on track to make its podcast business profitable in 2024. The company, which had 220 million paid subscribers to its premium service in June, said it has more than 100 million podcast listeners on its platform, 10 times what it had in 2019. Podcast costs at the company rose €29 million in the first half of this year. Facing competition across genres and formats, Spotify found that exclusive podcasts generally don’t draw subscribers away from its rivals. The pool of podcast listeners is growing, but the flood of shows on various streaming platforms makes it tough to break new hits. “The size of the bet up against the size of the market just seems irrational in retrospect," Evan Shapiro, a media consultant and producer, said of Spotify’s podcast investment. Spotify spent its way to the top of an industry that turned out to be less lucrative than it appeared when it began its podcast quest in 2018. That represents a tiny slice of the $200 billion digital-ad market. is expected to reach $2.3 billion this year, a 25% increase from 2022, according to the Interactive Advertising Bureau, an industry group, and is expected to more than double by 2025. Spotify’s competitors, including Amazon, Apple and Google, tech behemoths with their own audio streaming services, have other, more profitable businesses. No one in the business is making much money on podcasts, but Spotify, which has spent far more on the medium than its rivals, has more to lose than most. The company, which has struggled to report consistent profits, lost €527 million, equivalent to about $565 million, in the six months ending in June, on €6.2 billion in revenue. Most of its shows aren’t profitable, according to people familiar with the matter, and the company has recently cut staff and programming to slow its losses.
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