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Spotify Shows ‘The Harder I Work, The Behinder I Get’

“One of our statements at Emmis is we ought to take $20 million and short Spotify.”

Andy Bloom



The “Harvard Business Review” recently reported that Spotify developed a framework for exploring the relationship between data and uncertainty they call DIBB (Data, Insights, Beliefs, and Bets). They use it to explicitly identify success metrics for new ideas and opportunities and create a common language around judging performance. You could say it worked. Spotify, the Swiss audio streaming service, reported its Q3 – 22 results and announced that it has 456 million total users worldwide, up 20% year-over-year, surpassing expectations.

Spotify also announced it has 195 million paid subscribers, up seven million, which is one million more than prior guidance or 13% year-over-year.

Total revenue followed suit up 21% to €3.04 billion. Premium revenue was up 19%, and ad revenue grew to €385 million. Each beat Spotify’s earlier guidance. That seems to be a healthy quarterly report card.

If seeing the Euro sign (€) confuses you, the Dollar ($) and Euro are now worth equal amounts for the first time since 2002.

Wall Street usually rewards such good news with jubilation, but Spotify’s stock plunged 13% after releasing its earnings on a day when the Dow Jones Industrial Average was up over 337 points (1.1%). No longer a Wall Street darling, Spotify stock has slipped over 60% in 2022. At around $80 per share, it has lost about 45% of its value since opening at $148 in 2018.

So, what gives?

It turns out that more subscribers and revenue don’t equate to more profit.

Spotify reported a third-quarter net loss of €194 million or €0.99 per share. According to Bloomberg Business, the loss per share exceeded expectations of €0.82 per share.

Spotify exemplifies the old saying, “the harder I work, the behinder I get.”

Spotify’s answer? On its earnings call, CEO Daniel Ek told analysts that the company is considering raising subscription rates in the U.S. because Apple Music and YouTube’s Premium service did. In these challenging economic times, it’s hard to predict how effective that will prove.

The company’s Q3 – 22 earnings report also reminded me of a lengthy conversation with Emmis Communications CEO Jeff Smulyan and Rick Cummings, President of Radio Programming Emmis Communications.

We spoke during the middle of Summer when Spotify was trading over $100 a share. Smulyan said: “One of our statements at Emmis is we ought to take $20 million and short Spotify.” Jokingly, he qualified the statement, “We said with our luck, the minute we shorted Spotify, Alibaba or Tencent would buy it for $100 billion, and we’d be wiped out.”

Smulyan understands the economics of broadcasting, streaming, and podcasting, probably, as well as anybody on the planet.

Remembering formatics 101, here’s a pre-sell for what’s coming up.

#1: Jeff Smulyan’s book, “Never Ride a Rollercoaster Upside Down: The Ups, Downs, and Reinvention of an Entrepreneur,” is out December 6th.

The book includes a breakdown of the businesses Emmis has managed over the years. “I hope, I think, it provides an easily distillable analysis of the economics of sports, radio, TV, streaming, and podcasting that somebody could say, I never knew that,” Smulyan told me.

As I listened to Spotify’s earnings call, what Jeff Smulyan told me last summer rang in my head. “The reality is if you are iHeart or you are Spotify, and you rely on the economics of streaming, the math is impossible. And Apple being Apple has made it more impossible because they basically went to the music business and said, we’ll pay you $0.73 on the dollar. So, Spotify at $0.65 on the dollar isn’t going to get much lower rates. The problem with that is you show me a business where 73% goes to music licensing besides all the other costs, and you make no money.”

Spotify lost €194 million in Q3 – 22. Spotify is projecting a loss of €300 million for Q4 – 22.

Smulyan knew.

In the previous quote, did you notice iHeart is in the same sentence as Spotify? Do you think that was random? Think again about Emmis’ decision to exit radio. “It Was Hard To Be Gone, But Harder To Stay For Emmis Communications.”

# 2: I promise that the interview with Smulyan (and Cummings) is one of the most fascinating with a CEO ever. Barrett Media will post the transcript of the entire conversation the week before and after Thanksgiving.

Here’s why it’s so terrific:

  • It’s a two-hour conversation. Getting a big-time CEO to stay in one place for that long would usually be impossible. However, although he said he felt fine (and sounded his usual upbeat, optimistic self), Smulyan was isolating with Covid. I think the interview kept him occupied over a holiday weekend when he couldn’t do much else. Rick Cummings was dragged into it, which may have ruined his weekend, but he never complained. Apologies to him.
  • Rick Cummings – He interjects and plays a foil to Smulyan. Having Cummings there adds comfort and depth. If you need a morning show, I can recommend the team of Smulyan and Cummings – or is it Cummings and Smulyan? The only issue is you’re not sure who the straight man is much of the time.
  • A little Indy knowledge: Betcha didn’t know I lived in Indianapolis when Smulyan started his legendary broadcast career. Therefore, I have Jeff Smulyan trivia information. Included are topics I’m sure he has never been asked about, at least outside of Indy. For example, this interview has a remarkable story about him winning a radio contest on another station, not to mention his (and Cummings) favorite David Letterman tales.

There is a ton more in this interview about Spotify, including why the company went into podcasting and audiobooks  – and he nails it.

#3 The Barrett Sports Media Summit includes the Jeff Smulyan Award presented to the top Sports Radio Executive. Smulyan will be at the Summit.

Remember, Jeff imagined the Sports Radio format and was the principal owner of the Seattle Mariners. He talks about the experience at length in our conversation. Which do you think are smarter: MLB owners or the heads of major radio broadcast groups? Smulyan’s answer surprised me. His combination of experiences running a media empire and owning an MLB team gives him a unique perspective.

I hope I’m not giving away his topic at the Summit, but when he talks about ESPN’s challenges…you don’t want to miss it.

Spotify also has challenges. As Smulyan discusses in our conversation, music royalty fees may doom the music streaming service.

As Jacobs Media President, Fred Jacobs, tweeted not long ago, this is the company that hired and then couldn’t figure out how to utilize Kevin Weatherly and Tom Calderone for successful music programming. There aren’t smarter, better, more imaginative programmers in the world. What does that suggest about Spotify?

Competition from Apple, Alphabet’s YouTube, Amazon’s Audible, and music service, among others, are only the beginning of the challenges. Exchange rates favor U.S. companies. The economy is souring worldwide. Losing just €300 million in Q4 – 22 isn’t looking any easier.

 If only I’d invested that spare 20-mil shorting Spotify.

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The Only Path Forward For News Radio is Strong Personalities

Radio’s competitive advantage remains its people. And when it comes to personality, no format owns that right now more so than News/Talk




If radio wants to keep up, personality has to be the way. The format of choice is irrelevant, but personality has to be the biggest asset for the format and station.

It’s something I’ve written about before in this column, but when it gets reinforced by iHeart CEO Bob Pittman, it’s worth mentioning again.

In a great conversation with Talkers’ Michael Harrison, Pittman pointed out that “25% of iHeart’s stations do not play music”, and that more and more shows on the company’s music stations are “actually talk shows that play little or no music at all.”

Then came the best line of the conversation, when Pittman said, “Even on our music stations, you find us moving much more towards heavier personalities, because as we begin to say, If somebody just wanted music, they’ve got a lot of places to go. We’re probably not their best option, if they just want to dig through music. If they want somebody to keep them company, and hang out with them, and be their friend, and be an informed friend, and connect with them, there’s no better place. So we’re very committed to it.”

That’s it right there. 

Radio’s competitive advantage is being a friend (ideally local), while using personality-driven content to develop that relationship with the listener to then drive listening occasions. 

As has been discussed and addressed for years, music radio simply can’t compete with Spotify, Amazon Music, etc. if your goal is to listen to your music at the exact time that you want it.

Radio’s competitive advantage remains its people. And when it comes to personality, no format owns that right now more so than news/talk, where the strongest opinions and deepest connections often exist. That’s backed up by the Time Spent Listening for the format, which leads the way in many markets.

In many ways, news/talk is the best — and most exciting — place to be right now in the business, and none of that has to do with what is shaping up to be a fascinating 2024 election cycle. But rather because the industry’s biggest advantage to maintaining and growing its audience is its personalities, so if you’re already in the talk format, you’re ahead of the game. And then if you’re good, you’re a highly valuable asset. 

As Pittman also noted in his conversation with Harrison, “For the first time ever, the radio business is bigger than the TV business, in terms of audience from 18 to 49 [year olds].”

National coastal media won’t write about that, because too many of them aren’t everyday American consumers. However, the data doesn’t lie. Radio is beating TV in a key demo and the leaders in the industry know that personality-driven content is their key to future success. That’s a great combination for those of us working in the business.

Granted, as we all know, it’s not all roses and sunshine. These are still tough times with continuing competition in the ad space and a soft 2023 shaping up. 

However, the show must go on. 

And as radio strategically prepares itself for not just the rest of this year, but the next five to ten years, there are plenty of goals that need to be achieved, but if growing and developing personalities is at the top of the list, that’s a win for the industry and an even bigger win for the news/talk format.

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If CNN is For Sale, Here Are 5 Potential Buyers

CNN can’t survive as a “both sides” network, as a Fox News lite, or as a leftist network. It needs to be the network that upholds the truth. These companies would align with that method of thinking.

Jessie Karangu



(Photo: Getty Images)

It’s hard to run a cable news network like CNN these days. Just look at NewsNation. It was founded on the principle of being the first centrist cable news network to come into existence in years. But over the past couple of months, the network has peddled by coming from a slightly right-of-center angle with headlines. They’ve tried to steal left-of-center viewers from CNN with the hiring of Chris Cuomo. And now they’re literally going wall-to-wall with coverage of UFOs. I’m not even making that up.

In a world where a big chunk of its denizens believes the truth is a maybe while the other half doesn’t pay attention to the news unless it is bite-sized, does it still make sense to own a cable news network? Given the turmoil Warner Bros. Discovery CEO David Zazlav has faced lately with CNN it may not be for him. 

The company was forced to let go of CNN CEO Chris Licht this week after a scathing profile from The Atlantic that went behind the scenes into how Licht operated the network post-Jeff Zucker. It was a circus, to say the least. After reading the profile though, you still come away feeling bad for Licht while considering the fact that there is a hand that might have been puppeteering him along the way that was used to having control over everyone.

Zazlav comes from a part of cable where it is necessary to operate like a dictatorship because the formula has proven to work with Discovery Channel, HGTV, Food Network, etc…and because the shows that air on these networks create their own warped reality to spit out for thirsty reality consumers who want it the way it is served.

It’s impossible to have this kind of culture in cable news where the personalities aren’t really the star of the network — the news and facts are and they can’t be warped to fit all interested parties. They just have to be true whether it benefits one side or the other. The truth is the truth. 

There are new ways to tell stories and there’s new technology you can use to tell those stories but at the end of the day, telling stories also has the same formula as it always has and can’t be changed.

Remarkably, Don Lemon comes away from Licht’s profile looking the most intelligent when he says that many critics of CNN like Zazlav are committed to Monday morning quarterbacking. CNN went a little too hard on various things happening in the Trump administration too many times, but at the end of the day, it was the job of journalists to hold politicians accountable to the truth just like it has been since the founding of television news. 

This lack of realization on Zazlav’s part shows that CNN probably doesn’t belong in the same company as Warner Bros. Discovery. The cultures of Discovery and CNN clearly don’t align. Axios has already reported that because of the low ad market, cord-cutting, slumping ratings, and the run-up to the election having not started yet, WBD doesn’t plan on selling CNN any time soon. It also should be noted that CNN still makes almost $800 million a year for WBD so it is not the big loss of an asset that many in the media would make you think it is. 

At the same time, unless Zazlav decides to change his mindset, he needs to sell before this situation becomes unmanageable. CNN can’t survive as a “both sides” network, as a Fox News lite, or as a leftist network. It needs to be the network that upholds democracy and the truth. These companies would align with that method of thinking.


The Mickey Mouse Club owns the news organization that already has the most trust among conservatives on television besides Fox News (ABC News), so they would help legitimize CNN’s mission of garnering more conservatives.

CNN’s library of content would bolster its digital platforms and provide an avenue to create new documentaries and films. ABC News’ own extracurricular projects would be on a platform that has consistent reach with the audience they’re seeking and wouldn’t get lost in the clouds like it currently does on Hulu.

National Geographic could move its content to CNN and HLN and help Disney get rid of one less cable network (NatGeo Channel) that doesn’t generate revenue.


CNN already has the largest news organization in the world. Their addition would bring NBC over the top. NBC’s ability to promote news offerings on Peacock would get some much-needed help as well since CNN has the number one digital news website in the United States.

Peacock would also be able to add CNN’s library to its app giving viewers who crave live news and sports another reason to subscribe to the app.

Regulatory issues may prevail due to past rulings by the federal government but this may have a chance to go through if the government believes the internet and streaming and the fragmentation of television has created enough competition for a CNN/MSNBC combo to not be too powerful.

The Emerson Collective

In a stroke of sheer awkwardness, could the owners of The Atlantic be contenders? Laurene Powell Jobs has constantly spoken about how much she believes journalism affects the balance of our society.

CNN, despite its ratings drag, still plays a vital role in shaping what we talk about as a society. Jobs’ causes like social justice reform, immigration reform, and the environment might get more attention from the general populous on a platform like CNN

The Washington Post or New York Times

Both entities were hand-in-hand with CNN reporting on the latest developments involving the Trump administration and both also faced public backlash about what they deemed as important with a Trump admin vs. a regular administration.

They all share the same mission and journalism ethos and, in the case of WaPo, have a very wealthy backer who could fund a potential deal.

Byron Allen

The media mogul has become more deeply involved with the industry than he ever was before. He has a stake in the sports RSNs that are currently failing, he owns The Weather Channel — the most trusted name in news right now which is a remarkable feat to achieve in an era where so many deny climate change and he’s in the market to buy more.

CNN being black-owned could quell the accusations of the network becoming white-washed. A partnership with The Weather Channel bolsters coverage of climate change for the cable network.

And for Byron Allen, CNN gives him a seat on the table when it comes to power and influence in the worlds of Wall Street and Congress.

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What Chris Licht Got Right, and Wrong, During His CNN Tenure

Chris Licht faced an impossible mission of improving ratings without Donald Trump and with a staff he alienated.




The departure of Chris Licht from CNN was abrupt but expected after a string of missteps. His criticism of his predecessor Jeff Zucker spilled into criticisms of the network’s coverage of Donald Trump and the Covid pandemic, which undercut his staff. Journalists who stood up to conspiracy theories and election falsehoods from the very top felt betrayed.

I’ve known Chris for 30 years, when he served as an associate producer at a KNBC/CNBC for a daily half-hour program centered on the O.J. Simpson trial. Later, we were colleagues at NBC and kept in touch while he was at CBS and I was at ABC. He is whip-smart, congenial, worked well with big talents like Joe Scarborough, Charlie Rose, and Gayle King, and, until now, had a stellar track record.

And in his latest and biggest post — despite being put in an impossible position — did some things right, which I will highlight in a moment.

But first that impossible position. His new bosses at Warner Bros. Discovery wanted a restructuring and high ratings. They insisted on less calling out of misinformation and more “both sidesism”. So Licht had to derail the CNN train and then try to lift it back on the ratings track. No small job. Especially in a news climate that is in decline.

All the cable networks — who depended upon Donald Trump’s unpredictable, often treasonous and dangerous style — have suffered ratings decline. Fox numbers are down and so is MSNBC. The viewing public no longer has to tune in every minute of the day to see what the President is going to do or say. Life has largely returned to normal for most people.

So CNN, which could once depend upon airing and then fact-checking Trump’s latest absurdity, had to find new content.

Licht’s decision to emphasize down-the-middle news gathering seemed like a solid response to life without a bombastic — some say irrational — President.

Just cover the news, at which CNN is great. It’s the first place to turn during a mass shooting, a war, or natural disaster. But those are inconsistent events and cannot be depended upon for steady ratings. That’s the environment Licht stepped into.

He reacted with some good moves. His midday CNN News Central program, 3 hours of straight news, positions itself well to cover breaking news. It’s followed by Jake Tapper and Wolf Blitzer, also emphasizing news coverage.

However, unfortunately, the list of mistakes is a lot longer. Starting with Don Lemon. His “whole thing” in primetime was to be provocative and with a strong progressive bent. Licht attempted to turn Lemon into what he is not, an easy-to-watch, not opinionated host in the morning. A broadcast that was supposed to keynote the Licht agenda blew up in months. Lemon had an opinion on everything and could not get along with his co-hosts, which in morning TV is critical. The all-important chemistry was not there.

His meeting with Republican politicians on Capitol Hill to invite them back to CNN sent a message that they would no longer be challenged for disinformation. And Licht balanced the commentary panels on CNN with GOP election deniers who shouted over questions they could not answer, in turn sticking to talking points. A move that did little to attract viewers from Fox, and instead drove away legacy CNN viewers accustomed to progressive analysis and Republicans who respected opposite opinions.

Next, his attempt to normalize Donald Trump with a CNN Town Hall, somehow expecting the old rules of decorum would work became a disaster. Trump has to be covered. 30% of the electorate supports him, as do nearly 50% of Republicans. But a live Trump supporter audience overwhelmed Kaitlan Collins who was drenched by a firehouse of lies and deception.

And finally, there was Licht’s decision to make his criticisms of staff and their former coverage public in The Atlantic. A profile that made his gym trainer appear to be his top adviser.

To sum up: Chris Licht faced an impossible mission of improving ratings without Donald Trump and with a staff he alienated.

It was an opportunity wasted and a good man self-defeated.

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