Last week, The Wall Street Journal became the latest to report how Spotify’s billion-dollar bet on podcasts is not going well because “most of its shows aren’t profitable.”

I’ve said repeatedly over the last decade that in a market with something like three million podcasts, only a tiny fraction is making money. Advertisers are still not pouring dollars into the medium, so an even smaller number of hosts and producers are able to attract enough sponsor money to pay the bills.

For everyone else cranking out episode after episode despite not generating much income, podcasting is just a hobby. There’s nothing wrong with that, but Spotify threw enormous amounts of cash down the drain trying to exploit demand that doesn’t exist. It made deals with celebrities who have no idea how to create compelling content (e.g. Harry and Meghan, Alicia Silverstone, Lena Dunham, Lindsay Lohan, even the combination of Barack Obama and Bruce Springsteen).

Spotify — which the Journal says spent $286 million on new studios and more than $250,000 per episode — isn’t alone in making this mistake. Amazon, Sirius, and NPR all lit millions of dollars on fire before realizing what they had done.

No restaurant would try to attract customers by hiring, at an exorbitant salary, a new chef with no kitchen experience and no prior success in any food-related business. But I bet if the chef were a celebrity, Spotify would have given them a big check to host their own podcast.

Previously on Harris Online…