Why you won’t see any new TV rewatch podcasts during the Hollywood strike

This is Hot Pod, The Verge’s newsletter about podcasting and the audio industry. Sign up here for more.

Today, I’ll dive into Spotify’s second quarter earnings call this morning. Despite layoffs and the shutdown of a number of podcasts, it’ll be a while until we see the benefits from a thriftier company. I also have an update on actor-hosted rewatch podcasts — and news of a new podcast coming to public radio.

Gossip Queens and Pod Meets World aren’t going anywhere during the Hollywood strike. After a number of TV rewatch podcasts halted their programming due to confusion over whether they break the Hollywood strike’s rules, the SAG-AFTRA union clarified its rules to Hot Pod. As first reported in NYT, the union still considers existing TV rewatch podcasts under a contract to be a form of promoting struck work — they can continue to publish new episodes during the strike. 

But don’t expect out-of-work actors to launch any new podcasts — the union says both signing new contracts for rewatch podcasts and rewatch podcasts not under a SAG-AFTRA contract are off-limits. 

“Rewatch Podcasts are considered promotional. Hosts should honor any pre-existing contracts but, if a contract is not involved, they should not promote struck work, past or current. Guests appearing on podcasts should not promote struck work under any circumstances,” the union’s national director of contract initiatives and podcasts, Sue-Anne Morrow, wrote in an email to Hot Pod. 

Given the timing of when the contracts were signed, this guidance very likely gives the green light for new rewatch podcasts on Full House and Bones to launch their first episodes. But the union is giving a lot less leeway to any future projects. 

The union posted a new FAQ on how the strike impacts podcasts, with additional guidelines for rewatch and companion podcasts. It instructs members who are approached by a producer to appear in a companion, rewatch, or other entertainment-focused podcast to steer clear of such work. “Members should not accept any new contract to host a show that promotes struck work while the union is on strike,” says the FAQ. 

Listeners may also see their favorite rewatch podcasts make some programming changes. According to the FAQ, the union is asking hosts of such podcasts to consider changing up their content during the strike’s duration: “You are free to continue hosting your podcast that is signed to one of our agreements, but if you are able to pivot your show away from the promotion of struck work, we strongly encourage you to do so. We are all in this fight together.” 

There’s good news and bad news for the Swedish audio giant. Spotify posted second quarter earnings this morning, showing that both premium users (220 million) and podcast ad revenue (30 percent increase) are up from last year. But a net loss of €302 million this quarter suggests it will be some time until we see a positive effect from the company’s efforts to streamline operations. 

In its quest to reduce losses, the company this year took some drastic steps: it laid off around 800 workers (including 200 employees from its podcast operations), merged the Gimlet and Parcast podcast studios, and made several high-profile programming cuts — including not renewing its deal with Prince Harry and Meghan Markle’s production company, Archewell Audio. It also announced plans to sublease its Manhattan offices at 4 World Trade Center by the end of the year. 

Interestingly enough, net charges of €44 million linked mostly to the shutting down of podcasts, severance for layoffs, and excess real estate put a slight dent in its gross profit margins this quarter. Margins are 24.1 percent this quarter, compared to 25.2 percent last quarter (and 24.6 percent YoY). The company is shooting for profit margins of anywhere from 30 to 35 percent in the long term. And average revenue per user dipped as well, to €4.27 (around $4.72), a 6 percent decline from last year and a decrease from last quarter’s €4.32 (around $4.79). 

But company leaders told investors at today’s earnings call that they’re optimistic about the rest of the year due to an expected gain in users and revenue due to price increases. The company recently announced a $1 hike in the price of its Premium subscription in the US and has increased subscription prices in more than 50 markets worldwide. 

Spotify CEO Daniel Ek said that the price increase was one of the ways the company was planning to grow its revenue in the future. But he also added that growing the number of ad-supported and Premium users was the platform’s preferred route for revenue growth. 

“There are three ways to drive our revenue growth. We can grow our users, we can create new business with new revenue streams, and we can increase revenue per user. Our preference among them is to focus on growing the overall number of consumers on our platform, as this gives us scale advantages and retains optionality for the future. However, we’ve also been clear that there will come a time when price increases become a more important tool in the toolbox,” Ek said. 

Spotify is in the early stages of its experiments with AI, and the company is looking at bringing more AI features to the platform. Chief financial officer Paul Vogel bought up AI in podcast discovery as an example. 

“So if you think about podcasting today, it’s really high-quality content, but it requires quite a lot for you to get into new podcasting. So one very easy thing we can do with these new AI developments is of course summarize what these podcasts are about, and by doing so, you can imagine it becoming a lot easier to merchandise new podcasts for consumers, which drives in higher engagement and more growth for creators — which is a really positive thing,” Vogel said. 

Another podcast is coming to public radio. The Ezra Klein Show will come to public radio stations in November as part of a new partnership between PRX and The New York Times. The podcast version of the one-hour weekly show will still be distributed by the Times, but PRX will serve as the distributor of the public radio program, according to a press release viewed by Hot Pod. PRX will announce a full list of stations that will air the program later this year. 

The popular podcast hosted by the founder of Vox is only the latest to make the transition to public airwaves. (Disclosure: The Verge and Vox are both part of Vox Media.) PRX is also the public radio distributor for The Moth Radio Hour, The Center for Investigative Reporting’s Reveal, Futuro Media’s Latino USA, and others. 

“Our goal is to bring stations in the U.S. programming that delivers listeners clarity on the world around them and enrichment to their lives. The Ezra Klein Show is a great example of a show that will do both,” PRX’s chief of business development and content, Jason Saldanha, said in a statement to Hot Pod.