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After last week’s big deal announcements, Spotify reported its fourth quarter earnings. The company is still operating at a loss, but the margins on podcasting do seem to actually be improving. I have more on that below, plus what it cost for the company to get there. Oh, and still no HiFi.

Plus, I’ve got some more Hot Pod Summit programming announcements.

On a call today, Daniel Ek told investors what they have wanted to hear about podcasting for a long time. “I’m pleased to say in Q4, we were very close to breakeven on that business, which gives me a lot of confidence that as we get into 2024, we will achieve the full year profitability target on podcasting.”

Spotify’s leaders have been insisting that its podcasting arm had a path to profit for a long time. The difference now, it seems, is that investors believe them. After utterly transforming its podcast business with cuts that have improved margins and shaken the industry, the company’s stock is trading above $230 for the first time in more than two years. 

It has been a year of drastic changes, and Spotify’s podcast business is almost unrecognizable. Nearly every executive who pioneered the vertical is gone, including top podcasting chief Dawn Ostroff. Its CFO, Paul Vogel, is on his way out. It collapsed Gimlet and Parcast, two pillars of its content strategy. Through three rounds of layoffs, it cut staffers brought in during its M&A spree not only in content but also in advertising and product as well. It killed off its Clubhouse competitor, Spotify Live. And just last week, it abandoned exclusivity even for its top podcast stars, Alex Cooper and Joe Rogan.

Ek said that the exclusivity model served its purpose. “What we’ve been able to see here, as we’ve been learning over these past few years, is that while some of these exclusivity deals worked, generally, it wasn’t aligned with what the creator wanted,” he said. “Exclusivity makes sense when you’re the smaller player trying to gain scale. When you’re the bigger player, the additional value of the exclusivity is far smaller than it is about being aligned.”

He also downplayed the magnitude of Spotify’s former exclusivity strategy, noting that not all podcasts were exclusive to the platform. That is true in the case of The Ringer. But according to a report from Semafor, in 2021, Ostroff tried to limit those shows to the platform as well. Based on what happened at Gimlet and Parcast, it’s very good that she didn’t.

The Ringer has proven the most resilient studio within Spotify, and it seems that its strategy is being applied more broadly: be in as many places as possible and get as much ad money as possible. It’s not revolutionary — it’s the default for podcasting. But according to a note from Wells Fargo analyst Steven Cahall, that new cash flow (paired with lower minimum guarantees, as is reportedly the case with Rogan’s $250 million deal), should have significant upside for the streamer.

It’s not there yet. Spotify is still operating at a loss (though a smaller one than investors were expecting). The audiobook vertical has still not quite found its footing and may not unless Spotify gets the upper hand over Apple and its App Store policies. Plus, Ek said that the company is still looking for “efficiencies,” so you know what that means. 

But the company offered stronger guidance than expected for the first quarter of 2024, and investors are thrilled. As for the podcasting industry, that’s another story.

In a difficult year for podcasting and the media industry at large, we’ve seen a growing interest in the possibilities afforded by new business models. Among those are worker-owned cooperatives, in which employees own a share of the company and have some control over its decisions. Supporters hope that such co-ops will play an important role in podcasting’s future and give the medium a viable path to sustainability.

That’s why I’m excited to announce the next set of guests coming to Hot Pod Summit to help explore the future of the podcast workforce: Jasper Wang, Defector Media’s VP of revenue and operations; Eric Silver, creative lead at Multitude Productions; and Yooree Losordo, Radiotopia’s director of network operations. Hosted by The Verge’s Amrita Khalid, the panel will discuss what it takes to break free of traditional business models and the challenges to expect along the way.

And we’ve got one more to announce today: we’ll also be taking time at Hot Pod Summit to look at how transformative — and deceptive — AI might become in the podcast space. This is going to be a fun one. We’ll be looking at AI recordings of podcasts to try to see if they’re good enough to fool a room of experts. Here’s hoping we all still feel secure in our jobs by the end.

Also, an update: unfortunately, due to a programming conflict, we will not be able to move forward with our planned panel featuring Throughline and Israel Story. I was excited to bring Hot Pod Summit attendees a thoughtful conversation on how podcasts can provide space for critical storytelling on conflicts. With misinformation rampant, especially on social media, I really believe shows like Israel Story and Throughline demonstrate podcasting’s value to the wider media landscape. I look forward to publishing a story on that very topic soon. In the meantime, we will have additional programming announcements in the coming weeks.

Hot Pod Summit, our invite-only event for leaders in the podcast industry, is happening on Wednesday, February 28th. The summit will kick off On Air Fest Brooklyn 2024 and is hosted in conjunction with our friends at work x work. You can see the lineup for On Air Fest, including Malcolm Gladwell, Stephen Dubner, Norah Jones, Laurie Anderson, Seth Meyers, Nick Quah, Avery Trufelman, and talent from Audible, Netflix, iHeart, WBUR, Vox Media Podcast Network, and more. Buy tickets right here.

Thank you to our official lead sponsors for Hot Pod Summit 2024: AdsWizz and Simplecast. AdsWizz runs a self-serve advertising platform for creating and running audio ads. Simplecast offers podcast hosting, distribution, and analytics.

That’s all for now. I’ll be back on Thursday for Insiders. As for the rest of you, see you next week.