The announcement that the podcaster Joe Rogan will make his popular podcast exclusive to Spotify is interesting from the point of view of open formats, data ownership, and audience as the new capital, all themes we have explored before. This is about owning your audience.
Several good pieces have discussed the commercial aspects of this deal, which we won’t go into other than this: This Wall Street Journal article summarises the news of the deal. This blog post from September 2019 does a good job estimating how much money Joe Rogan already made from his widely listened-to podcast, which, like most, has sponsorship announcements. The writer’s answer is anywhere between USD 60 and 240 million, which is also a ballpark estimate of what the minimum size of the deal is, assuming it is an all-cash licensing deal. Speaking of, a notes that the rise in Spotify’s stock price following the announcement alone was many times that figure.
I’m thinking most about Joe Rogan (JR) agreeing to insert an intermediary between him and his audience. It’s Spotify that wants JR’s audience:
This is less about scale because Rogan already has scale. This would seem to be about leveraging his scale in a few interesting ways.
The first is undoubtedly as a funnel to new Spotify users.⁴ While Spotify goes out of their way to note that the podcast will remain free, this just means that you don’t need to be a Spotify premium user. You will still need a Spotify account. Some percent of users that sign up for Rogan will undoubtedly convert to paid Spotify users, and that’s great. But even if they don’t, they’re now using Spotify as a podcasting app. Which means they’ll most likely be using it to listen to other podcasts as well.
David Hanson of Basecamp also says on Twitter:
Re: Rogan, the difference between $20m/yr and $100m/yr is negligible in terms of lifestyle. The difference between literally RUNNING YOUR OWN SHOW vs being content bait on someone else’s hook is immense.
We have discussed this before in the post Audience → Product. Having direct access to your own audience is a big competitive advantage for companies that make products, and it is equally – if not more – important for individual performers. The deal with Spotify limits, or at the very least brings some uncertainty to how JR can otherwise make money from his audience JR has less leverage now than earlier. We do not know what the contract says about merchandising independent of Spotify, or whether some content (“bonus episodes/extended content/video”) can be offered as a paid or separately ad-supported stream, again independent of Spotify. Whatever it is now, the option of whether to do/not do any of this is no longer solely JR’s. Plus it isn’t about what is possible now, but also what the parties’ relative bargaining positions are when the contract is up for renegotiation.
Finally, when I read about the deal, I contrasted this with Matt Taibbi’s move from being a writer at Rolling Stone to running his own paid newsletter hosted on the platform Substack. Even if the Substack email platform is technically an intermediary, you own your subscriber list. You can move your newsletter by simply exporting your audience from one platform and importing it into another. JR’s move is the opposite of that:
The magic of podcasting is that it’s free, open, and decentralized. Like email, when you have an audience (subscribers), you can reach them directly at any time, without any middle-man or algorithm (Facebook, Google, etc) getting in the way.
His existing podcast feed will likely die as most people eventually unsubscribe due to inactivity.