|Chances are you probably already know the details, but let’s quickly recap so we’re all on the same page.
Last Tuesday, it was announced that Spotify has struck a multi-year licensing agreement with The Joe Rogan Experience, widely understood to be one of the biggest podcasts in the business, that will see the show become exclusive to the Swedish audio streaming platform. The podcast, which previously was not available on the platform, will start appearing on Spotify on September 1, and the exclusivity will kick off at some point later in the year. It will remain free to consume, regardless of whether the listener has a premium subscription or not — they just have to be listening on Spotify.
Some key details to clock. First, the exclusivity will apply to both the audio and video versions of the podcast. This is notable, because video recordings of The Joe Rogan Experience tapings drive significant viewership on YouTube, and it ties in with previous reports about Spotify’s initiative to dip its toes back into the category by focusing on video experiences that primarily complement podcasts. (As opposed to investing in “premium video content,” which was the initial strategy grounding the company’s first video push back in 2016.) I generally think the Spotify vs. YouTube angle is slightly oversold, though I highly recommend checking out Julia Alexander’s excellent piece over at The Verge on what this means for video podcasting on YouTube more broadly.
Second, it’s important to reiterate that the Rogan deal is a licensing agreement, not an acquisition, which means The Joe Rogan Experience retains ownership of the show and full creative control over its output. There’s been some discussion about whether the concept of “full creative control” applies when there’s a possibility Spotify may someday implement its podcast advertising technology, Streaming Ad Insertion (SAI), on the show. Might be a while before those discussions can be fully borne out; as I reported in the initial news drop last week, the show will maintain its current advertising sales relationship with PMM at this time, and further, it remains to be seen what kind of control publishers distributing over the platform will ultimately have over the SAI-enabled ad experience.
Third, and finally, the Wall Street Journal reported that the deal was worth more than $100 million, in part based on milestone and performance metrics. There’s been some discussion about what motivated Rogan to take the deal, and whether or not it was a smart move for someone who was clearly already making a substantial amount of revenue in his current position, so on and so forth. I don’t particularly care one way or another about these questions, but I suppose I feel compelled to say: the pandemic probably had almost nothing to do with this deal. This kind of thing gets cooked up over a much longer time period. Also: a high level of money guaranteed now probably always looks better than theoretically higher level of money realized over time, particularly if you’re able to keep as many things the same as possible, which I sense is the case here.
Okay, with all that laid out, let’s think through some things.
First up, a slight correction: when I initially wrote up the news last Tuesday, I characterized The Joe Rogan Experience as being the “last big holdout” for Spotify, as far as the distribution of major third-party podcasts are concerned. This isn’t exactly true, given that Serial is still absent from the platform… though, curiously, you can find S-Town, Serial Productions’ other hit series, up on there. So Serial remains a property to watch, but don’t forget: Serial Productions is said to be in acquisition talks with the New York Times. Possibly relevant: the Rogan deal was announced shortly after This American Life, another industry heavyweight and sister company to Serial Productions, was finally made available on Spotify after a long absence due to a prior streaming exclusivity deal with Pandora.
But Spotify’s addition of The Joe Rogan Experience can be argued to be significantly more consequential, in part because of the exclusivity, but also because the massive show is unique in its massiveness. You could probably attribute the size to several different factors, including: a general longevity, stemming from an early adoption of the space (it launched back in 2009, and it was one of the few podcasts at the time hosted by someone with exposure in other platforms); its copious publishing volume (with a catalogue of over 1400 episodes); its commitment to free speech at all costs that has fueled head-turning controversies (see: past comments that have been condemned as sexist, racist, and/or transphobic as well as the appearances of Alex Jones, the opportunistically vile misinformation-spewing conspiracy theorist); its undeniable currency of political influence, which falls from a politically-activated following likely fueled by Rogan’s “I’m just asking questions” radical free speech disposition that feeds into a distinctly modern interpretation of authenticity (Bernie Sanders, Andrew Yang, and Tulsi Gabbard have all appeared on the show, and Rogan’s endorsement of Sanders was significant enough to drive its own cycle of controversy); it has some interesting overlaps with life-hacking media, which is a consistently potent genre (see: mushroom coffee); and Rogan’s genuine talent behind the mic (regardless of the politics, you really can’t deny that consistently holding formidable three hour-plus interviews is a tremendous skill).
The Joe Rogan Experience is a very specific kind of show that can cultivate supremely sticky followings. Further, it has been constantly described to me as a strong gateway podcast; that is, the kind of show that can bring more listeners into the category. It has also been to said to cut across demographics in vast and unexpected ways. Apologies for using an anecdote instead of actual data (which I can’t find publicly available), but that squares with my own experiences: there are a lot — and I mean a lot — of people in my life whose primary exposure to podcasts is The Joe Rogan Experience, along with This American Life and Radiolab. And they really do run the demographic gamut. It’s frankly wild.
All of which is to underscore: there isn’t any other podcast quite as big, wide-ranging, engaged, and consequential as The Joe Rogan Experience, and this deal shouldn’t be read as anything other than a coup by Spotify. There simply isn’t any other major podcast piece left on the board, I think, not of this scale. I wouldn’t be surprised if the company starts big-game hunting in other territories. (I hear Howard Stern is “open to ideas” regarding his SiriusXM contract, which expires in December.)
But let’s not get ahead of ourselves here: the move comes with risks. The biggest thing to watch is how Spotify will respond when — not if — the show runs into another dust-up over speech, particularly as it relates to hate speech and misinformation. It might come in the form of another Alex Jones appearance, it might come in the form of something else entirely. But it will come.
Keep in mind, Spotify has already had some experiences with such dust-ups. Back in the summer of 2018, during a moment that saw a flurry of platforms — including YouTube, Facebook, Apple Podcasts, and Stitcher — completely remove content from Alex Jones’ Infowars media operation from their services, Spotify opted to remove only a select number of episodes, citing violations of its Hateful Content policy. The company received pushback for only pulling a few episodes, with critics asking whether Spotify did enough.
Around the same time, Spotify also ran into some trouble on the music side over a new policy around hateful content and conduct. That policy, which was initially expressed in the de-listing — but not removal — of music by R. Kelly and XXXTentacion from the platform, drew pushback from the music industry, with critics characterizing the policy as “ill-defined” and effectively a form of censorship. It would eventually be abandoned. (Here’s a good New York Times write-up about the whole affair.)
It’s interesting to look back and get a sense of how Spotify approached those two incidents. Both episodes suggested a sort of tentativeness and fumbling nature to the company’s management of the controversies. The select removals of Infowars episodes were, at best, a half-measure that wasn’t fully responsive to the moment, while its handling of the music side tussle had the feel of being caught unawares. “While we believe our intentions were good, the language was too vague, we created confusion and concern, and didn’t spend enough time getting input from our own team and key partners before sharing new guidelines,” wrote Spotify CEO Daniel Ek in the June 2018 corporate blog post, when the company initially sought to update the hate content and conduct policy in response to the pushback. “We don’t aim to play judge and jury,” he wrote later in the post.
I reckon that Spotify has developed scar tissue from those experiences, and that it’s made at least some preparations for the next time. Further, I have to believe that it knows what it’s getting itself into — how it’s leaning deeper into questions of judge and jury — by securing a multi-year exclusive licensing deal with The Joe Rogan Experience, in effect directly tying itself and some substantial proportion of its non-music content fortunes to the show. So I’m intensely curious to see how Spotify will respond to that first speech-related dust-up. Not to be over-dramatic, but I really do think the response will define Spotify for the years to come. It will have bearing on its identity. Will that take the form of a more involved, substantial, and comprehensive approach to hateful content and conduct? Or will it manifest as a harder lean into hands-off distance and not aiming to play judge and jury?
If I were to be cynical about the whole thing, I’d wager that the approach will be somewhere along the lines of “whatever works to preserve the relationship.” Because I don’t know about you, but I see this as a situation where Spotify needs Rogan more than the other way around. Everything thus far — from the acquisitions of Gimlet Media, Parcast, The Ringer, and Anchor, plus its myriad exclusive programming deals, including the one with the Obamas’ production company, Higher Ground, and whatever else they have in the deal making pipeline — strikes me as the accumulation of mid-to-long term assets. “Win later” moves, in sports GM parlance (sorry). Signing Rogan is a “win now” move, a development meant to immediately accelerate a web of interconnected value-creating effects: attracting more podcast listeners onto the platform, luring more advertisers into considering SAI (even as Rogan maintains his existing podcast ad arrangements), and fueling more interest among podcast talent to cut deals and distribute with them. There will almost certainly be more major Spotify announcements to come over the next few weeks — we’ve still yet to hear details about projects from Higher Ground, and you can bet they’re eager to keep the narrative momentum going — but the Rogan deal is one that grinds everything together into corporeality, shifting the theoretical into the real.
Of course, there is always the possibility that the deal might not work as well as Spotify thinks it will. I’ve seen some argumentation that platform exclusivity could very well result in listenership declines, as the increased friction of making some listeners switch over to a non-preferred app might be too great to overcome. We’ll see, but I doubt it. As discussed, Rogan’s listenership seems uniquely sticky, and a critical mass will almost certainly move over. It’s already off in some respects, between the considerable jump in stock price following the deal’s announcement and the fact that Spotify has completely dominated the podcast narrative. In any case, the risk-reward balance generally tips in favor of Rogan: he’s that much richer right now, and he could always revert back to the open ecosystem when the deal is over. That is, if it continues to be as strong as it is today, which is an open question.
Is Spotify’s complete dominance over the podcast space a fait accompli? Maybe, I don’t know. It sure does seem like they absolutely have all the pieces to maximize their chances of doing so. But after living through the past few years, I’ve become one of those people who doesn’t really believe in the certainty of an outcome until it actually happens. Regardless of whether they do or not, though, one thing’s for sure: they have radically reshaped the power dynamic of the entire podcast ecosystem.
So, in an earlier draft of this newsletter, I started working on a complementary column about the implications of this deal for the wider ecosystem: what it means with respect to Apple, to the open podcast ecosystem, to the way podcast publishers are able to generally go about building their businesses. I decided to move that over to next week, for a few reasons: (1) there’s already been way too much writing about those specific questions over the past seven days; (2) these questions will be relevant for a very long time, so we’re in no rush; and (3) eh, because I could.
Issue 260, published May 26, 2020