Spotify bet more than $1 billion on podcasting, including at least $2o million on a podcast hosted by former President Barack Obama.

The company bet big on Obama, and it lost, according to a bombshell report by the Wall Street Journal.

Speaking to Spotify insiders, the paper reported —

Dawn Ostroff, formerly in charge of building Spotify’s podcast business, had talked about needing a “House of Cards,” the critically acclaimed program that established Netflix as a producer of hit shows, former employees said.

Ostroff signed celebrities to pricey podcasting deals—$20 million or more each for the Obamas’ production company, Higher Ground… The Obamas’ production company, which made five podcasts at Spotify, signed a new deal with Amazon’s Audible last year.

The Obamas created five podcasts with their $20 million advance. They made such shows as Born in the U.S.A., The Michelle Obama Podcast, and the ironically named Big Hit Show.

Higher Ground Productions signed a new deal with Audible, an Amazon service. Plus, Obama is still cashing his checks from book sales and speaking tours. In other words, Obama himself hardly took a hit from the podcast’s failures.

However, Spotify is struggling.

After all, the company repeated the mistake elsewhere. It reportedly signed another $20 deal with Meghan Markle, former duchess of Sussex.

Markle hosted only one podcast, Archetypes, and it faded after an explosive debut. The podcast ran for only 12 episodes, and it reportedly wasn’t even renewed for a second season.

At this point, most of Spotify’s podcasts are unprofitable, insiders told the Journal.

Now, the company is demanding more from its signees after conceding too much to the Obamas.

The Journal reported —

The company recently agreed to pay comedian Trevor Noah $4 million in a deal that allows the company to collect revenue from the podcast to cover its investment, according to people familiar with the matter. After that, both sides share the take. Spotify intends to pursue similar deals, executives said.

 

Flashback! Michelle Obama admits to ‘uncontrollable sobbing’ on her podcast

 

The Horn editorial team