Spotify contract end, blow to Harry and Meghan’s business?

Is this the first entrepreneurial failure of Prince Harry and his wife, Megan Markle, since their separation from the British crown? The couple has just formalized the end of their adventure with global streaming giant Spotify, according to Variety.

The termination of the contract, which was signed three years ago, was estimated by the American press between 20 and 30 million dollars. and hired Harry and Meghan production company Archewell Audio to present exclusive podcasts for the platform.

A first crisis in the winter of 2022

Officially, the separation is by mutual agreement. Off the record, the two don’t seem to be on good terms. These two famous people who would like to end this collaboration. Perhaps they wanted to get out of an exclusive contract and double down on other partners. But above all, there was a disturbing precedent. The Sussexes were not at all pleased that Spotify was able to support Joe Rogan’s podcast who spread misinformation about Covid-19 and conspiratorial comments about vaccines, not to mention his racist outings. In the winter of 2022, they expressed their “concerns”, stating that they could regain their freedom if Spotify did not clean up their content. The storm has finally passed with several problematic episodes pulling out, but that was only a year ago and may have left its mark, as Spotify was slow to respond.

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Just one podcast in three years

For its part, Spotify may have gotten tired of waiting for content that never came. Only one podcast has actually been online since 2020: the 12-episode original series, hosted by Meghan Markle, in which she strives to deconstruct clichés about women with guests like Serena Williams or Paris Hilton. Archetypes was released in August 2022, and became a hit in Australia, the United States, the United Kingdom, Ireland, New Zealand and Canada, ranking on Spotify’s most listened to podcast. Several more seasons were to follow, again likely audience-providers.

But Spotify is currently going through a period of turmoil. After pouring hundreds of millions of dollars into podcast production to grab the leading position in the world, the company abruptly halted its development. Last May, we learned that 200 jobs dedicated to this activity would be cut. Despite more than 500 million monthly active users, Spotify is still chasing profitability and its CEO Daniel Ek has admitted he’s invested a lot in terms of its sales growth. Perhaps the shortening of the contract with the princely couple is part of their rationalization strategy?

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Financial loss for the spouses

However, this reversal of the situation could have many consequences for the couple. The first is financial. It is unlikely that Harry and Meghan received the full amount promised, although we do not know the details of the agreement. Seeing this type of contract is often uncertain. Most of the time, payments are conditional on time, morals, audience clauses and productivity, ”Maxime Bourdelle, co-founder of the family office Pulse, which oversees the fortunes of families and entrepreneurs. In terms of the public, the goal had to be achieved. The question of productivity, not so much.

Thus, the couple could no longer count on all those 20 or 30 million dollars in their budget. Which is more than just annoying. Because if they double down on contracts with Netflix, Apple, or publisher Penguin Random House, it’s because they need the money. Broken by the House of Windsor and exiled to California, they could no longer count on subsidies from the Crown to ensure their lavish lifestyle. Remember, however, that they travel on a private jet and the bodyguards who monitor their safety daily and the safety of their luxury possessions will cost between two and three million dollars a year. So yeah, they’re definitely in the range of a million or two dollars.

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negative impact on their image

Another negative effect of this break with Spotify is the impact it could have on their business. They were already seen as a volatile couple, having negotiated their coming to Charles’ coronation with great difficulty only to end up giving up on going there as a family because the circumstances were not right for them. This time around, their credibility in the business is on the line, because they actually didn’t fully honor their contract by only providing a podcast. This might make other big companies think twice about signing with them. However, they retain notoriety as an asset which allows them to remain bankable. Provided that their image does not deteriorate further.

As a reminder, the Sussex family created the Archewell structure to house their various activities. It is a charitable and informational structure. They are allowed to fund charities but are also used to produce content. Six companies are officially attached to Archewell, including Archewell Audio, which is dedicated to podcast production and was created specifically for the contract with Spotify in July 2021. It is registered in Delaware and pays no taxes on profits. Suitable for earning maximum income.