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For all the modifications Spotify has gone by over the previous yr, there may be nonetheless extra to come back. These three-year podcast offers the corporate struck are arising for renewal, and what Spotify decides to do with them may have reverberations throughout the business. The Joe Rogan Expertise — the primary, the most important, and essentially the most consequential — will expire in 2024. At the moment, after talking with podcasters, producers, analysts, brokers, and executives (totally on background, although just a few courageous souls went on the file), I check out how the Spotify / Rogan relationship may play out.
Let me be clear: that is purely a thought train. I didn’t hear again from Rogan’s administration, and Spotify declined to touch upon negotiations. However what is evident from my conversations is that, regardless of his points, Rogan is seen as an important a part of Spotify’s podcast enterprise. If he walks or (much less probably) if Spotify selected to not renew, it will be one other huge blow to the corporate’s podcasting editorial operation. In the event that they minimize a deal, Spotify is in a greater place to rebuild, or at the least preserve, its podcast arm. If Rogan goes to a different platform, he may primarily be a kingmaker. And if he determined to launch his personal community, he would don’t have any bother attracting listeners, advertisers, and expertise.
As you may see, there are loads of ifs! However that’s the enjoyable of it.
Spotify actually must discover a method to make it work
The one factor everybody appears to agree on is that it’s in Spotify’s greatest curiosity to maintain Rogan on board. In any case the cash the corporate has sunk into offers that went nowhere (Harry and Meghan) and acquisitions that have been ultimately dismantled (Gimlet), Rogan remains to be the very best wager the corporate has ever made. He stays the highest podcaster on the earth, and it’s not shut.
With Rogan, Spotify will get his very huge and really loyal viewers (although whether or not they have been capable of translate these listeners into paying subscribers is up for debate). He’s additionally an enormous draw for advertisers, and there may be an understanding within the business that his presence on Spotify has a halo impact for advert gross sales on its different exhibits. And for all of the hoopla over his scandalous feedback on vaccines, race, and gender, he didn’t lose any earshare and Spotify didn’t lose subscribers.
However, and it is a huge however, this isn’t 2020. Cash is lots tighter than it was a number of years in the past — buyers are pissed that Spotify’s podcast wager nonetheless will not be worthwhile, and CEO Daniel Ek has pledged to focus on efficiency. Rogan’s present deal is reported to be value as a lot as $200 million over three(ish) years. So then the query turns into whether or not Spotify can discover the precise worth to maintain him glad and mollify buyers.
“It’s a state of affairs the place you might be damned in case you do, and you might be damned in case you don’t,” says Arete Analysis founder Richard Kramer. “For those who do maintain him, Spotify will probably be locked into paying Rogan as a lot or greater than earlier than, at a time when they should comprise prices. For those who don’t maintain him, then it’s actually powerful as a result of your largest property and supply of gross sales inside the advert enterprise — walks.”
It is usually value retaining in thoughts that he is not going to be negotiating with the identical staff as final time. Daybreak Ostroff, the previous head of podcasting, is gone. So is Courtney Holt, who landed the deal within the first place. Spotify’s new head of podcasting, Sahar Elhabashi, labored intently with Ostroff, however not like Ostroff, she experiences as much as chief enterprise officer Alex Norstrom. Norstrom, who comes from the music aspect, is there as a examine on wild podcast spending and has been unsparing in his cuts. How a lot Spotify will probably be keen to spend in the end comes all the way down to him. If competitors from different platforms drives the worth sky excessive, he could not have the tolerance for it.
One other factor agreed upon by the folks I spoke with is that Rogan has the higher hand on this state of affairs. He has loads of energy proper now. No person has managed to knock him from his pedestal prior to now a number of years, and it appears unlikely anybody will within the close to future.
Rogan initially gained mainstream discover due to his means to enchantment throughout the ideological spectrum. I don’t assume that’s fairly as true anymore, given his controversial statements and name to listeners to vote Republican in 2022. (Although it appears he could have discovered his weirdo unbiased of selection with RFK Jr.). However he does fill a spot within the media panorama. In keeping with YouGov, Rogan’s listeners are overwhelmingly younger males, a lot of whom say they reject politically right stances, don’t belief conventional media, and actually, actually like to work out.
That is to say, he has a loyal viewers who will observe him wherever he goes and are unlikely to have model loyalty to Spotify. Rogan is the model, and if he needs to develop that model right into a community, he has the cash and affect to take action. He can develop new exhibits, promote them on his personal, and sure switch at the least a few of his viewers. And with one other presidential election arising, there could also be no higher time to take action.
There may be additionally the matter of exclusivity. Whilst Spotify has loosened its grip on different exhibits, Rogan remains to be unique to the platform, minus promotional YouTube clips. And whereas Spotify has turn into one of many largest gamers out there (in no small half because of Rogan), it’s nonetheless the podcast app of selection for under 17 p.c of podcast listeners, based on a study from Cumulus, and continues to lose share to YouTube. His attain will probably be better if he goes unbiased once more, and he’s a man who likes to be all over the place.
If he isn’t all that focused on being unbiased, we may additionally see different platforms attempt to swoop in with extra money than Spotify can afford. YouTube is lastly making a giant push into podcasting. It doesn’t have any main licensing offers but, however that doesn’t imply it couldn’t. Amazon may sneak in with some loopy cash and fewer restrictions, because it has with exhibits like My Favourite Homicide and SmartLess. Hell, Elon Musk may make a play for Rogan as he tries to make Twitter / X a creator platform. The 2 even reunited yesterday for an episode that was specifically licensed to X.
This can be overly easy, however cash is good. Having a minimal assure throughout a interval of turmoil is actually good. When that minimal assure is value 9 figures, it could be not possible to show down, even for somebody who already has extra money than he is aware of what to do with.
For all of Rogan’s maverick cache, there may be an ease to staying — all he has to do is present up and speak. Spotify has additionally made it clear that they will not place limits on something he has to say. If they’ll provide you with the money to chase away competitors and make it value his whereas, it’s a candy deal.
Rogan additionally values loyalty, based on those that have handled him. After his controversies in 2022, he was supplied $100 million to change to conservative streamer Rumble. He turned it down, saying that “Spotify has hung in with me, inexplicably.” That is also a canopy for not desirous to go to a dinkier platform / get sued, however there does appear to be a grain of reality to that.
I went into this considering that, given all of the choices obtainable to him, he couldn’t presumably follow the identical unique deal. Who wants one other $100 million or two when you may bankroll your personal factor and nonetheless make a boatload of money? However Dan Granger, CEO of Oxford Highway, made a degree to me that made it appear shockingly easy.
“Rush Limbaugh stayed with Premiere Networks. Howard Stern has stayed with Sirius XM. And also you higher consider they’d loads of, you recognize, alternatives to depart,” he mentioned. “However the home discovered how one can maintain them.”
A part of that would imply Spotify deciding to drop Rogan’s exclusivity with a renewal. The corporate has backed off exclusivity for many of its different exhibits and will determine there may be extra worth (and definitely extra advert income) in letting JRE distribute large.
That mannequin may very well be tweaked even additional. With yesterday’s Musk episode, the licensing entailed making the primary two hours obtainable on X, with the final 45 minutes unique to Spotify. That’s one thing that would simply be replicated on different platforms. It’s not essentially the most elegant answer, however it does maintain dedicated Rogan-heads coming again to Spotify.
If I needed to place cash on it (not $200 million, however you recognize, $50), I might say Rogan and Spotify handle to strike a deal. It might not look the identical — in actual fact, it appears probably that will probably be extra versatile than the present deal construction. However bumps apart, it has been a remarkably profitable relationship. Wanting YouTube or Musk swooping in with $500 million, I believe it should keep intact.
Hope you loved this little experiment with predicting the longer term. I’m positive I will probably be embarrassed by a few of this when the choice does lastly come down. (Be sort, future me!) Let me know what you assume at ariel.shapiro@theverge.com