Obamas to leave Spotify, seek multimillion-dollar deal elsewhere: sources

BARACK and Michelle Obama's time with Spotify Technology is coming to an end.

The former first family's production company, Higher Ground, won't be signing a new deal with the audio platform, according to people familiar with the negotiations. The company is instead talking to other distributors about a deal worth tens of millions of dollars, among the most-lucrative in the podcasting business.

Higher Ground is in the middle of negotiations with several potential partners, including Amazon.com's Audible and iHeartMedia, said the people, who asked not to be identified because the conversations are private. The company wants to pick a new home within the next few weeks. It has talked with multiple big networks, including Spotify, but the Swedish streaming giant declined to make an offer, according to 3 sources familiar with the discussions.

Higher Ground is seeking a deal that will allow it to produce several shows and release them on multiple platforms at the same time. This could explain iHeart's interest given that it hasn't historically relied on an exclusive strategy for its podcasts. This is one reason why some potential bidders, like Spotify, have bowed out - a widely released show will end up on their service anyway. Companies like Spotify and Amazon have pursued exclusive rights to promote their own services.

The Obamas are each willing to commit to appearing in an 8-episode programme, which for some bidders isn't enough of a commitment to justify a deal comparable to those for shows like SmartLess, Call Her Daddy and My Favorite Murder. Those shows appear weekly, or with a frequency to close to that, while Higher Ground's programmes featuring the Obamas have been limited series.

Higher Ground signed a deal with the music streaming giant in 2019 as the Obamas planned their post-presidency media business. The company has produced a few podcasts since then, starting with The Michelle Obama Podcast, which features the former first lady chatting with friends and family on the subject of relationships. Spotify said that show was one of its 5 most popular podcasts in 2020.

Their agreement gave Spotify ownership of Higher Ground's feeds and master recordings produced under the deal, meaning any future agreement won't include that programming.

Higher Ground and Spotify have clashed during the course of their partnership. Both The Michelle Obama Podcast and Renegades: Born in the USA, a show featuring conversations between Barack Obama and musician Bruce Springsteen, debuted exclusively on the platform. They only went live on other services months later. That exclusivity is why Spotify paid Higher Ground, but the production company found that being tied to one service limited the audience for its shows.

The 2 parties also disagreed about how much of the company's output would include the former president and first lady. Spotify wanted more shows featuring 2 of the most famous people in the world, while Higher Ground hoped to use their deal to provide a platform for a range of voices. Higher Ground has pitched Spotify dozens of shows but produced five. The company released The Big Hit Show, one of its only programmes that didn't feature an Obama, in January. Sources familiar with their current deal said more Spotify programming will be released through the fall.

Spotify has spent hundreds of millions of dollars to work exclusively with some of the most popular podcasters, including Joe Rogan, Bill Simmons and Alex Cooper of Call Her Daddy. The company did so hoping to capitalise on their star power to build its app's reach while recouping the costs through ad sales. It has had less success doing deals with mainstream celebrities and Oscar-nominated filmmakers that had no experience making podcasts.

Spotify's investments encouraged Amazon and SiriusXM to spend hundreds of millions of dollars on their own deals, and the Obamas are hoping to capitalise on what has been a frothy market. With Spotify out of the bidding, however, the list of potential homes for the Obamas has shrunk by at least one. BLOOMBERG