Amazon (AMZN.US) Restructures Audio Business: Closes Wondery Podcast Studio, Lays Off Approximately 110 People
According to sources familiar with the plan, Amazon (AMZN.US) is closing its Wondery podcast studio and will be restructuring its audio services. This move is part of a larger business reorganization effort. It's reported that approximately 110 people will be laid off as a result. Additionally, Wondery CEO Jen Sargent will be leaving the company. The existing Wondery series programs will either be integrated into Amazon's Audible or become part of the newly established "Creator Services" team, which will focus on producing content-driven podcasts.
These measures indicate that Amazon's aggressive expansion in the podcasting space has not yielded the expected success. Despite attracting numerous well-known industry figures, the company is adjusting its strategy to better compete with Spotify (SPOT.US) and Alphabet (GOOGL.US) subsidiary YouTube, as podcasts are shifting from pure audio format to video-centric content.
In a memo, Amazon Audio, Twitch, and Games Department Vice President Steve Boom wrote: "The landscape of the podcasting industry has undergone significant changes over the past few years. The rise of video has also blurred the definition of a podcast creator."
The memo states that the Wondery+ team will be merged into Audible. The Wondery production studio (which produces shows like "The Death Doctor" podcast series) will merge with Audible, while Wondery's Chief Content Officer Marshall Lewy will join Audible and take on a new role.
Meanwhile, Wondery's flagship projects led by top talent (such as Dax Shepard) will begin collaborating with the Creator Services team to better promote large-scale sponsorship and integrated services on the Amazon platform. The company has reached an agreement with LeBron James, who hosts a podcast called "Mind the Game" and was previously the face of Amazon's shopping festival, promoting his men's grooming product line.
Wondery's advertising and sponsorship department will establish a new team to handle similar cooperation matters in Amazon Music and creator-driven podcasts. The source noted that Wondery branding will still exist in some shows run by creators, while the Wondery+ app will continue to exist for a certain period of time. Some popular Wondery shows have already been transferred to other platforms.
Boom wrote: "These changes not only enable our team to better collaborate and leverage future strategic opportunities but also ensure we have the right organizational structure, providing the best experience for creators, customers, and advertisers."
In 2020, Amazon acquired Wondery for approximately $300 million when podcasting was at its peak. Amazon allowed Wondery to operate independently and developed a separate subscription app for it.
Recently, the podcast industry has been struggling to adapt to the video-centric model, influenced by YouTube's dominance in this field, which tends to favor those with simple, personally driven formats. This year, radio group Audacy closed its focus on audio podcasts business "Pineapple Street Studios".