Is Spotify in Trouble? New CEOs Face Double Threat from YouTube and Netflix

Welcome back to the rundown interview edition today. We are talking to Ashley Carman, a reporter at Bloomberg that covers the podcasts and music industry. In today's conversation, we discussed everything from Spotify and why their stock is down 30%, the new CEOs coming in, and how much longer Spotify can keep raising prices. We also discussed Netflix's jump into the podcasting space, and if we finally reached peak podcasts. This was a really fun conversation for me, I think you guys will enjoy it as well. All right, let's get into it. Ashley Carman, thank you so much for coming on the rundown today. Thanks for having me. Of course, I'm really excited to talk to you because you report on podcasting for a living, which is fantastic. I love podcasts. I listen to podcasts all the time, and I host a podcast as well. So I wanted to start this off by asking you, what does podcast, what does a podcast mean in 2026? Because I feel like the definition is always changing. I have no idea what a podcast is anymore. Oh my God. I mean, you went for basically the spiciest question. You can ask anyone in podcasting because literally right now, as we speak, the podcast industry is really going through kind of an existential crisis, or no one can define what a podcast is anymore. It was a battle when people started calling podcasts on YouTube podcasts, because they technically don't have RSS feeds on YouTube. But then the industry started to kind of accept that now podcasts on Netflix, where maybe they're called a video podcast, but literally don't exist anywhere but Netflix. This is where I think people are now really struggling. For me, personally, if a show has an existence on Apple podcasts, because it's audio only, and that is RSS feeds, for me personally, then I will call it a podcast. Pete Davidson, exclusive show on Netflix, or exclusive podcasts on Netflix. Is it really a podcast per your definition? It's just like a Netflix exclusive show, right? That's for me personally how I see it. But again, these are really shifting definitions because everyone's claiming that we're podcasts now, and they're like the hottest thing in media. So the big shift happened. I feel like probably what maybe two or three years ago, where it went from audio only, you know, most of the podcasts that I used to listen to were audio only, and then everything shifted to video right after post-COVID. And I think that's when the change started happening, where podcasts essentially started becoming like, I don't know, like talk shows, people just put them on the background on YouTube, especially, and just would listen to them during the day while they're working, while they're working out. And so I feel like that's when the definition started getting a little murky, because they went from just being audio only to being like a full-on production with graphics and everything. But we do that here too. We started when from audio only to video about a year, six, seven months ago. So it's starting to happen to everyone now. Absolutely. Yes. YouTube has become a huge giant in the space. It has become the most popular place for people to consume podcasts, according to Edison Research. So very quickly, YouTube, of course, video platform, the industry started to reorganize around this reality. So I want to, before we get into the YouTube stuff, I want to talk about Spotify because I feel like they're, you know, they started, they tried to make a big splash into podcasting. They had those, you know, nine-figure deals with Call Her Daddy back in the day, then there was the Joe Rogan exclusive deals, and they tried to really kind of corner the podcast space. I don't think it really worked out. So I want to get your take on where is Spotify right now as a podcasting platform. So yes, to your point, Spotify really leaned in when they first entered the space into exclusives. So Joe Rogan was available exclusively on Spotify. They ended up switching up that strategy. He is now available on YouTube and audio platforms all over, and they've now really leaned into this idea of flexibility for their creators. So they kind of want to be available everywhere. Now that said, Spotify did sign a deal with Netflix, Bill Simmons, and some other ringer shows around Netflix now. So the video is exclusively to Netflix. Audio lives everywhere. I don't know. I mean, it's really tricky because they spent over a billion dollars on podcasting, so you could argue what did they really get for that investment, especially given that YouTube is the number one podcasting platform in the US right now. But at the same time, here they are. They still have video creators and podcasters putting more shows on the service. People seem generally happy with Spotify as far as payouts go. They have the deal with Netflix and a show like Amy Polers, which launched this past year, just won the Golden Globe for the first time for the best podcast category. So it's a kind of a mixed bag on how the results have been for their podcast investment. You know, I wonder how like the approach it as like a business category, right? Because I think Spotify is kind of going through like a weird, not a weird, like a transition right now with leadership as well. Daniel Eck announced that he was stepping down as CEO. He's the founder of the company. He stepped out. He stepped down as CEO. I think he's already stepped down now. And as far as it started the new year, starting in the new year right. And so then now they have two co CEOs and you wrote a fantastic, fantastic piece on them. A very long but very detailed one. You flew out to Sweden. So I wanted to kind of ask you, where do you see, what was your first reaction when you heard that Daniel Eck was stepping down? And how do you see this transition to the new CEOs? Because my biggest takeaway as an investor is that their stock has dropped 30% since Daniel Eck announced that he was stepping down. So I feel like Spotify was riding high and then now they're kind of hit a speed bump. What is your takeaway from all of this? So I'll start with my, you know, I have to be honest. Daniel was really kind of a retrospective mood prior to this announcement. He was talking a lot, even on earnings calls, I believe it was where he would say, oh, we're almost at 20 years. And he did a podcast interview where he really reflected on his career. So the kind of signs were there and I was shocked. I got to be honest, I actually wasn't that shocked, but Alex and Gustav were co-presidents. They're now the co CEOs, but they were the co-presidents. And I got the sense that they really were being primed to kind of take over the company eventually. They're also Swedish. They've been at the company for many, many years, practically since the inception. And so them being named co CEOs also made a lot of sense. Now that said, the stock has been down to your point. I'm sorry to get the sense that maybe just a little bit of investors skepticism, they're like, what's going to happen here? But also the investment, the investors really want to see Spotify raise prices significantly around the world, especially in the US. Now, Spotify did recently announce that they're going to raise prices in the US to $13 for a single subscription. But the stock actually dropped that day. So I'm getting the sense that people legitimately want to see some real price hikes, not just a dollar here and there. Yeah, I was surprised to see the stock drop after the price hike. And I wonder what kind of pricing power Spotify has right now because of the increased competition. Obviously, they're like the big player in the music space. But with all this additional stuff like podcasting and audio book and stuff, they have a lot of competition with other players like Netflix getting into the game and YouTube just being a juggernaut. So I wonder what kind of pricing power they actually have to just keep raising prices or is the lock in just so strong and like the things like Spotify wrap, they're so strong that maybe they do have a decent amount of pricing power to keep raising prices over the next few years. This is the big question. One thing that I'm watching pretty closely is YouTube premiums price versus Spotify's with this new price hike. I believe they're about a dollar off from each other for a single plan and YouTube premium gives you ad free videos on YouTube plus YouTube music. Now, I don't just say YouTube premium. They're not paying me to say this, but the best money that I spend every month is absolutely worth the subscription price. Again, they're not, it must sponsored, but like I just have to throw it out there. It's totally worth it. People love YouTube premium and people also do love Spotify. But I think at a certain point, especially depending on how the economy shakes out and just how much people are really watching their budgets, you could see, especially if they're the same price. Maybe you sacrifice some of that Spotify wrapped magic for the YouTube music, YouTube premium bundle. Now, I don't know if that's what's going to happen, but it is something I'm watching very closely because they really are at this point quite close in price. Exactly. And I want to talk more about the new CEOs taking over. So, they went with the co-CEO route. And I wonder if they did that because they saw the success over at Netflix. Netflix has Ted Sarandas and Greg Peters. Do you think they're trying to copy that similar model that Netflix was able to successfully do after re-hasting step down? How long has that been? Probably, you know, what, a few years now at this point? Yeah. So, another interesting tip is that Ted is actually on the board of Spotify. Oh, that's right. So, it would make sense to me that when they were going through this transition, they would probably ask for their advice from the Netflix crew and how that went. There's a lot of overlap between Netflix and Spotify just in their cultures, from what I can tell. So, I would imagine that that played some role, but like I said, they kind of had this co-presidents role already happening, which I would imagine was the training wheels to determine, okay, can you two vibe and actually run a company as two heads versus just one? Yeah, that's true. And I they have a lot of challenges ahead of them because, you know, not being founders, they don't have as much of a leash. I feel like the board isn't going to be able to just, the board's going to have a smaller leash than if Daniel Eck was making the call. They might not be able to make big splashy acquisitions or exclusive billion-dollar deals with podcasters and audio books. So, I'm really curious to see what direction they do and what their first year looks like. You know, it's already off to a bit of a bumpy start because, you know, love it or hate it, people look at the stock price and they judge, you know, they judge the stock price. And so, things are already off to a bit of a bumpy start. Yeah, and for what it's worth, Daniel is still executive chairman and, of course, he picked these guys as his successors. So, he's on their side, he's there, he's not leaving, he's still involved. So, I can imagine that if they were to take some really big swings, they would need Daniel's buy-in, but if Daniel's bought in, then probably the board would be too. That's a good point. I, you know, I have to, we'll go back to YouTube here. Like I said, YouTube is like, YouTube is not just competing with Spotify, they're competing with Netflix, and you brought up in the, in earlier in the interview that they are, like, well, what was the exact set? They're the most watched platform. It's the number one podcast destination. I believe in the US, according to Edison research. And that's more than Apple, that's more than Spotify. And so, like, that's shocking. And I think the big stat to me is that people watch these podcasts now, like on their living room TVs, right? People are turning them on while they're making dinner or whatever the case may be. Spotify doesn't have that relationship with the audience, with their users, I mean, when it comes to, like, consuming stuff on TVs. So, that's a huge challenge for Spotify. Do you see them trying to kind of work their way into that, into, like, a TV platform, or is it just more doing partnerships with Netflix, which is what they've done recently? Oh, they are absolutely trying to take on the living room device market as well. So they revamped their Apple TV app, which, you know, is a thing you have to do to make sure the experience is actually quality. But also, they've been pitching video creators, so YouTubers and video podcasters on putting their shows on Spotify. They launched this whole new partner program that compensates in a different way. It's not ad rev share. It's actually out of a compensation pool based on consumption. And then they've also made some deals for music videos on the service. So they're really trying to build up that video library and compete with YouTube. Now, that said, YouTube has been around for many years as well, and has been building their, its video library for as many of those years that it's been around. So they're really competing against this entirely massive back catalog of rare DJ sets, B sides, random one-off, people's home videos, and then they're starting from scratch. So we'll see how much they can compete on that level. But from a new content perspective, they want to be a funnel for people to make sure they're uploading there. Look, we're big fans of Spotify here. I like Spotify a lot, and I don't know if I'll ever digit this because I have my entire catalog and everything on there. And so I'm excited to see what changes they do to kind of compete better in the podcasting space. But now, I'm going to talk about Netflix because they're the ones making the big splash right now. Obviously, they did that deal with the ringer for a lot of their shows. I'm a big watcher of Bill Simmons. I've been watching, you know, listening to his podcast for a decade plus now. So I turn on Netflix this week and I'm like, oh, there's Bill Simmons. What would you make of it? I'm curious. I just, I don't know. I just don't see, I just don't see myself turning on Netflix in the middle of the day and watching it. With YouTube, it was easy because if I'm working on my desk, I open up a tab, and I'm not usually watching it, but it's in the background and I just have it playing on my computer or my laptop. I just personally don't see myself watching Netflix to consume podcasts. So I'm really curious to see where this is going to take off. If this is going to take off for Netflix. But then, again, like, I think it's a relatively risk free, risk free bet for Netflix, right? Because the content is much cheaper than like paying for stranger things or another, you know, really expensive show with an expensive celebrity. Totally. Yes. I think I agree with you. When I put it on, I was a little taken aback by a Zoom setup on Netflix, for example, where it was podcasting, not even in the studio with each other, but talking to each other remotely, which for a podcast that we're doing it right now, it's totally fine. I think the audience, this is what you probably expect. However, when you're watching on your big screen at home and there's something about that Netflix prestige, you sort of expect even just like an actor studio vibe, where you're like, oh, you know, this is a little bit more premium than just, oh, people are talking remotely. So that's something that I'm also keeping an eye on. That said, like platforms like HBO, for example, sometimes for their shows, they'll do stay tuned after the show for, you know, a chat with the directors or the cast. I stick around for those, and I find them to be really additive. So I could see how if Netflix got into something like that, where it's commentary or behind the scenes on a program that they're launching, people might be interested, even if it's marketed more as like a podcast. Right. Like they have like the ringer has like the rewatchables podcast, which is fantastic. And obviously, I'm sure a lot of those movies are on Netflix. So like you finish watching a movie and there's a rewatchables episode. Like, hey, go listen to this episode about the rewatchables and and you can kind of like, you know, talk about, you know, like digest more stuff about the movie. So it makes sense there, but you're right. It is a little off putting where I'm just like seeing Bill Simmons and cousin Sal, like on their zoom setup and they're just like, you know, talking about the weekend games. And I'm just like, this doesn't feel like Netflix. It just feels like I'm watching a YouTube video. And maybe that isn't matter. And maybe Netflix is okay with that, but it is, it is a little bit off putting. Yeah. I just don't know how many people are watching Netflix on their phones. Like it might feel a little different if I was watching on my phone versus, you know, my big screen at home, because that's where you're like, whoa, this is a lot in my face all once. Yeah. Yeah. And but then again, like it's relatively cheap to try. And I wonder if a lot of these podcasts are they're going to take the Netflix money. And then after, I don't know, I don't know how long these exclusive deals are. But if it's a year or two, they're just going to go back to YouTube after they cash in on the Netflix checks. So I wouldn't be surprised that I've reported a little bit on how the money for the biggest podcast stars hasn't been enough to sway them to leave YouTube. Because again, you have to keep in mind YouTube is the giant and YouTube pays a lot of money just from an ad rev share perspective. And it's just where all their audiences. I've seen in the past and podcasting. So it wasn't at the video era. This was back in the audio era. There was a company that really made a run for exclusive podcasts. And I know people who put their shows there exclusively. And it was really hard when those exclusives ended to rebuild their audience outside of that paywall. So that was luminary. Luminary. That's right. Okay. Yeah. So that's kind of the other shoe to drop, I guess, is if these deals don't get renewed or if just people decide this actually wasn't really for me or whatever happens. What happens when they return to YouTube and have to rebuild an audience there or start from scratch again. So that's why I'm sitting back and watching in China report on this as we speak. And the other concern, obviously, and this is the thing that concerns me is like, have we hit peak podcasts? Right? Like there's a new podcast popping up all the time. And before like it was cool, right? It was just like, you know, just a couple people in their in their garage or whatever the case may be just chopping it up. Now you have Amy Poler making these like highly produced podcasts. And it's like podcasts are getting too Hollywood right now. You know what I'm saying? And so I just wonder if we've kind of hit peak podcasts. And if the audience might just not show up anymore, you actually wrote about this recently where you talked about how like, like people are just consuming the clips now, right? People consume the clips. And that's all they do because these podcasts are like two, three, you know, maybe maybe not four hours, but two or three hours long. And I just don't know if that's like, there's enough appetite for that kind of content, you know, as attention spans get shorter and shorter. It's funny because if you would ask me this question a year or two ago, I probably would have been like, no, we're not at peak podcasts. Everybody go on, start a podcast, have fun. But I've seen some signs recently that are kind of giving me pause. So I actually just wrote about this this week. There is kind of the subsect of podcast super users who are like, there's more information than ever in podcasts. There's so much I can get from a podcast investment and by self help, just ways to improve my life. But they're finding that they can only have so many shows in their rotation because like, I don't have unlimited hours in the week to consume these shows. So now people aren't even listening. They're using transcription tools and AI to parse podcast episodes and get the summaries spat back out at them really quickly. They could even ask the AI a question about the episode. So there's this new kind of need in the marketplace and a startup is working on something related to this. So I'm starting to be like, oh man, I thought the threat to podcasting was maybe the video clips, like people clipping their own shows and people just don't click through. But now it's like, oh no, they might not just consume it all and totally disaggregate the podcast from the learnings of that podcast. And it's really wild. So do you, you know, one of the reasons why we keep our shows, our show is 10 minutes during the week, 10 minutes every day because we didn't we wanted to kind of go the opposite direction because like every single podcast is an hour or two. We want to kind of go shorter, you know, I know the daily and some of these daily news ones have like 20 minute ones. We want to go 10 minutes and that's been pretty successful so far. So I wonder if we kind of see that we're like, we're just going to see a shorter version of some of these longer podcasts. And I think I've started to see that as well. We're like some of these like three hour podcasts that I'm like just chopped up into like a 15, 20 minute episode. And then that gets, you know, posted on YouTube and a separate podcast feed. Yes. Andrew Hubertman is a good example of this. His podcast can run hours and he does have a new series called The Essentials. They're still 45 minute episodes, which is kind of funny because it's still probably too long for most people. But you can see that the marketplace is adjusting to this. And yeah, I think we're probably going to see these alternatives. I guess the big existential question is for me at least podcasts used to be a fun activity. It was something you put on to enjoy while you were cooking or you were on a road trip. And it feels like now we're just optimizing and losing the fundamentals of what actually made podcasting so fun and critical. I have to get through all these episodes because I don't want to miss like a nugget of knowledge that I could apply to my life and make my productivity 2% better. You're right. I know what you I know what you mean by that. That's why I've started to like personally. I've started like trim back some of my podcasts and something because I was like, I don't want this to be a chore. I want to have fun. Right. And so it does feel like a chore sometimes. But I still think though and I want to get your take here with the transition that we're seeing happening in media in general, right? Especially with like the death of cable TV, you know, advertising dollars are moving away from cable TV into other mediums. I'm hoping that podcasting is one of them. Do you see that trend continuing? And do you think that because of like the more advertising dollars coming in, that's going to kind of keep the podcasting gravy train going for a while longer? Yeah. So podcasting's ad revenue has increased. I don't have the stats off hand. But the IAB does a research study every year where they release what the ad revenue is for podcasting that said my concern on this is to your point as the money that once went to linear TV starts to diffuse and go throughout the entire media ecosystem as podcasting becomes more like the creator economy and digital video. I worry that the budgets that maybe would have been spread out to podcasting start to instead go into creator or video content and it gets lumped into that bucket. So then podcasting itself, which I guess in probably ad buyers minds is seen as audio sort of stagnates and sticks where it's been and never gets to go to that larger growth point. Yeah. That's going to be interesting to watch. We can't have a conversation these days without talking about AI. And you briefly mentioned it about how these AI tools are popping up and summarizing these podcasts, these long podcasts. Do you see what other role do you see AI playing and disrupting the space besides just summaries and clips? Do you see like AI generated podcasts of two, you know, fake people having a conversation? Because that was a big thing when like Notebook LM was kind of taken off a year or so ago. And I'm like, oh, we're going to just have customized podcasts. I never bought into that. I feel like a big reason people listen to podcasts is because they develop like someone of a relationship between the podcast host. And so I don't see that happening. But then again, like who knows like with AI just they're just just getting so real these days. Yeah, I mean, I think AI will be used and ads for sure. So that actually could be an upside for the industry because if more companies are able to make a really well sounding audio ad, that that's cool. They can get into the space faster on the creation front and on. I mean, for creators who are making podcasts, AI will probably be additive to their workflow. And then for the hosts themselves and users who are like, how am I consuming like my consuming an AI podcast? I too am a little skeptical that your go-to listens are going to be AI hosted. But at the same time, this market exists for these AI summarized shows. So I'm a little less bearish on it now and a little bit more like maybe there's just different use cases throughout the entire podcast medium. I mean, as it's growing, it's becoming more sophisticated. It's not one size fits all. So I really have to view it in different buckets. Yeah, you're I mean, I I hope that we're both wrong here. I hope it's or I hope we're both right here like that's not going to happen. But yeah, it does it does keep me you know, it does concern me a little bit. I mean, I still don't know how to respond. Actually, I'll ask this. This is the last question I have for you. Do you think there's ever going to be a moment where like podcasting is truly going to become cool and mainstream because I still don't I still get weird looks whenever I tell my daughters, friends, parents that I'm a podcaster and they're like, yeah, what do you actually do for a living? I just I still get those looks and questions. So is that ever going to like not happen or or is that just going to be how podcasting is viewed in the mainstream just going forward? Well, to be fair, I feel like if you told them you were a YouTuber or a Tik Toker, they'd probably also give you weird looks like I think just the idea that people can make a living doing media on the internet is still sort of a foreign concept to some people. Podcasting is mainstream. So many people listen to podcasts and love them, but it does still have this historic baggage of being kind of nerdy or mostly nerdy, just like, oh podcast, but I'm hopeful I really want us to move past a cringe state and into a like acceptance of wait a second, we all are listening to these things and we all like them. It's okay to admit that. I know exactly. The thing is with YouTube. I think YouTube has hit that spot now where if you tell someone you're a YouTuber, people get interested like, oh, okay, you're a YouTuber. You probably like, you know, there's like this perception of like Mr. Beast and all these YouTubers being very wealthy and all that stuff. I feel like with podcasts, though, it's kind of like, okay, so like you just like post on Apple podcasts and like you talk, you you and your buddies talk. And so I feel like it hasn't gotten there. Maybe it needs a couple more years for it to become fully mainstream like YouTube has gotten, but yeah, I still get those weird looks. And that's okay. I mean, it's fine, but it does make for an interesting conversation. Star Trek. Hold your head high. I know. Ashley, thank you so much for coming on. You know, you wrote a fantastic newsletter on Bloomberg called Sound Bites. Is there anywhere else people can find your work? Yeah, Ashley are Carmen on X and I believe threads or maybe Ashley Carmen on threads. And on Instagram, I post videos. I'm on LinkedIn. So please do find me. Yeah, no, you write some fantastic stuff. I read almost all your new letters that pop up. And again, highly recommend people check out your piece that you did on the Spotify CEO. It's a long one, but it's very detailed. It's very good. And please put the time in. I know we all are attention spans or trash at this point, but we could do it. Yes, do it. You will walk away, very impressed. And especially if you're an investor in Spotify, highly recommend checking out that piece. Ashley, thank you so much for having on. Well, all right. Guys, hope you enjoyed that conversation with Ashley Carmen. You know, after talking to Ashley, I think I'm still bullish on the podcast space and also kind of bullish on Spotify. I know they're facing a ton of competition and also going through a leadership change, but they are improving the experience for listeners and podcasters. You know, I love that they have a comment section now and occasionally our podcasts will get recommended to a new audience as well. So despite Spotify's not going through a bumpy period right now, I still think they'll figure things out long term. I mean, it's going to be interesting to see how the podcast space evolves over the next few years. Let me know in the comments on Spotify and YouTube, what you guys think about the podcast space and who you think will ultimately end up dominating the space. And while you're at it, consider giving us a five star rating on Spotify and a thumbs up on YouTube that engagement really does help us out. And it helps other people find the show. Thank you guys so much for listening, watching and commenting. Shout out to Mike and Connor for all the work behind scenes. I don't see you guys back here next week.