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If nobody listens to an AI podcast, does it still make a sound? Does it matter that it’s in a foreign language?
Spotify is testing a new AI feature for its podcasts that would translate them into different languages while imitating the hosts’ voices. Episodes of some of the streaming service’s most popular English-language podcasts will be translated into Spanish, French, and German while theoretically keeping the host’s voice, intonations, and cadence similar to the original versions—emulating what Spotify called the “speaker’s distinctive speech characteristics.”
Some of the podcasts included in this early test include Armchair Expert, hosted by Dax Shepard and Monica Padman; Steven Bartlett’s The Diary of a CEO; and the hit pop culture podcast The Rewatchables, hosted by renowned podcaster Bill Simmons, whose podcast network was acquired by Spotify in 2020 for at least $200 million. The first batch of AI-translated podcasts will be past episodes of Armchair Expert, The Lex Friedman Podcast, and The Diary of a CEO. In the future Spotify will expand to include more of Simmons’s podcasts, an additional show from Shepard, and a new original podcast from former Daily Show host Trevor Noah, according to a press release. Noah speaks six languages, including German, according to an interview he gave in April 2022, but he will not be enlisted to use those skills and will instead be dubbed by AI.
Spotify did not respond to a request for comment.
Spotify, whose core business is music streaming, has tried to establish a foothold in the podcasting industry, which has exploded in popularity in the last few years. The Wall Street Journal reported that Spotify has spent around $1 billion to try and cement itself as a podcasting juggernaut. The efforts came under the belief that the market for podcast advertising—currently $2.3 billion—would end up being a bigger portion of the overall $200 billion digital-ad market, according to the Wall Street Journal.
Podcasting, like all of Spotify’s business, isn’t profitable. During its investor day in June 2022, Spotify said it expected its podcasting push to be profitable in “one to two years.”
A mixed bag of big-money podcast deals
Spotify’s podcasting efforts consisted of big-money deals with high-profile talent, which yielded mixed results.
Meghan Markle and Prince Harry signed a $20 million deal for a podcast that ended prematurely when it didn’t yield the expected results, as the royal couple struggled to attract a big enough audience. Spotify also paid $200 million over a reported three and a half years to Joe Rogan, and $60 million for Alex Cooper’s Call Her Daddy, the raunchy relationship podcast. While details on Cooper’s deal are scant, she has expanded to create her own podcast network that won’t be exclusive to Spotify.
The Rogan deal was among the first nine-figure podcasting deals, which raised some industry eyebrows as to whether it would pay off.
Even Spotify CEO Daniel Ek acknowledged that the company had overspent on its way to kick-starting its podcasting efforts. It’s unclear whether the Rogan deal was among those that broke the bank.
Spotify CEO Daniel Ek was clear that the company would be more diligent in choosing who it would offer big contracts to. “You’re right in calling out the overpaying and overinvesting, and I can start off by saying that we’re not going to do that,” Ek said during an earnings call in April.
Spotify’s overeagerness to break into the podcasting market forced it to slash some of its operations in June when it laid off about 200 employees in its podcast department. Those layoffs cost the company about $12 million in severance, the company said.
But Spotify has succeeded in growing its overall monthly average users, which crossed the 500 million mark in the first quarter of this year, partly thanks to its expensive podcasting investing. The press release announcing its AI voice translation efforts says Spotify has 100 million users “regularly listening” to podcasts. That scale, the company says, gives it added leverage in negotiating renewals for the talent it has signed over the last few years. Because Spotify is the largest podcasting platform, it is able to spread the cost of its talent contracts over a greater number of users who can bring in more ad revenue, Ek said on the same earnings call when asked about renewing talent deals.
Spotify’s ad sales from its podcasts increased by €22 million ($23.3 million) in the first six months of this year, according to financial filings. In other company documents Sportify said its second quarter podcasting ad revenue was up 30% year over year.
Results from the deal with Markle and Prince Harry have been more lackluster. Simmons, who is also a Spotify executive for podcasts, referred to the couple as “grifters.” On a podcast episode in June, he recounted a Zoom call with Prince Harry intended for coming up with podcast ideas, but Simmons said it was unproductive and criticized Prince Harry for his complaints against the British royal family. “Shoot this guy to the sun. I’m so tired of this guy,” Simmons said about the call. “What does he bring to the table? He just whines about sh*t and keeps giving interviews. Who gives a sh*t? Who cares about your life? You weren’t even the favorite son.”
Simmons added of Harry: “You live in f*cking Montecito and you just sell documentaries and podcasts and nobody cares what you have to say about anything unless you talk about the royal family and you just complain about them.”
In addition to the $12 million spent on layoffs, Spotify’s efforts to stop its bleeding on podcasts have cost it another $41 million in write-offs for the podcast contracts it has canceled.
