Is the Higher Ground-Spotify Deal Breakdown a Harbinger of Change for the Podcast Business Model?

Did they jump or were they pushed? 

The news is that the Obamas, or rather their post-presidency production company, Higher Ground Productions (which doesn’t seem to have any kind of website), isn’t going to renew its podcast contract with audio streamer Spotify.

The alleged $25 million deal was signed in mid 2019 and ends this October.

The Bloomberg article seems to be the Ur-story breaking the news, though some — The Guardian, Pitchfork, CNN, Black Enterprise, among others — add details, including that it was Spotify that said it wasn’t interested in renegotiating or renewing the contract.

The seemingly agreed upon bump in the road is “exclusivity.” Spotify wants the Obamas to themselves, while Higher Ground wants future podcasts to be simultaneously released on multiple platforms for greater exposure. So much for that exclusivity premium.

Moving along, Bloomberg says that Higher Ground is already in negotiations with other podcast outlets, including Amazon (Audible) and iHeartMedia. It adds that the Obamas only want a limited run of episodes featuring them, e.g. eight, in any upcoming deal.

Barack Obama’s Spotify podcast was an eight-show chat series with Bruce Springsteen, “Renegades: Born in the USA,” that debuted episodes February through April 2021. 

Nine shows of “The Michelle Obama Podcast” appeared July through September 2020, while an extra one, a lengthy promo for “Renegades: Born in the USA,” debuted in April 2021. The podcasts were a mix of the former First Lady speaking with friends or celebrities about casual and serious topics. 

Spotify and Higher Ground announced in September 2020 that the “Michelle Obama Podcast” would be available on additional platforms, two months after it debuted. At the time, the press release quoted Spotify Chief Content and Advertising Business Officer Dawn Ostroff as saying: “As a chart-topping smash hit, Spotify could not have asked for a stronger or more distinctive first entry in our multi-year partnership.” She added, “We look forward to growing that audience as we build anticipation for future Higher Ground series.”

Several stories on this hinted that Spotify had expected more, i.e. more Obama episodes, for its $25 million. In total, as of May 2022, Higher Ground had produced four originals, and the last new Obama podcast dropped a year ago, in April 2021. Since then Higher Ground has been pitching its other properties to Spotify, with middling success. Variety has some of those details.

The New York Post takes a harder angle, as it is wont to do.

Vanity Fair had a February story by Joe Pompeo on Joe Rogan and Spotify, which had some relevant details, “informed sources told me the Obamas’ production company, Higher Ground, has been frustrated with Spotify at times, finding it difficult to get additional shows off the ground. I’m told the Obamas are more interested in lifting young new voices than carrying shows themselves, and that this focus hasn’t always aligned with Spotify’s.”

Not surprisingly, Spotify wanted that Obama magic rather than a substitute. Podcasting might be new, different, but, ultimately, it’s not. It’s about attracting ears — the big stars attract those, while the understudies, barring the rare breakout, don’t.

Will future Obama/Higher Ground suitors be willing to let the main attractions make a brief appearance while the “young new voices” take the stage, if millions of dollars are being shelled out and eager audience ears are being sold on the Obama name?

And if the dissatisfaction with the deal was mutual, as alleged, will other celebrities be more likely to not renew similar deals, or perhaps might Spotify be more hesitant to shell out so much cash over unknown quantities of episodes (and untried media moguls)?

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