Spotify wants Joe Rogan and every musician. That’s proving impossible

By Frank Pallotta, CNN Business

Spotify wants to be the everything-for-everyone audio company. But it’s 2022, and that’s proving impossible.

Neil Young and Joni Mitchell asked Spotify last week to pull their music from the platform because of Joe Rogan, who has made frequent false and inaccurate claims about Covid-19 and vaccines on his very popular Spotify podcast “The Joe Rogan Experience.”

Spotify finds itself in between a rock and a hard place — it built a streaming music empire of 172 million subscribers in 180 countries on music from artists like Young and Mitchell, and it’s focused on becoming a hub for exclusive podcasts like Rogan’s.

They’re serving very different audiences, and Spotify is learning it may not be able to have everything it wants.

“They can have Rogan or Young. Not both,” Young said last week.

How Spotify got here

After Young pulled his music, Mitchell did the same and it snowballed. Harry and Meghan then expressed ‘”concerns” to Spotify over misinformation and the hash-tag “#DeleteSpotify” went viral.

Spotify’s situation mirrors Netflix’s controversy from late last year.

The streaming video company found itself in a similar firestorm in October when it had to walk a thin line between editorial freedom and editorial supervision regarding the controversial Dave Chappelle comedy special, “The Closer.”

For Netflix, the solution was a lot of apologizing. For Spotify, it’s adding a content advisory to any podcast episode that includes discussion about Covid-19.

“These are rules of the road to guide all of our creators — from those we work with exclusively to those whose work is shared across multiple platforms,” CEO and co-founder Daniel Ek said in a statement.

Spotify had no further comment than Ek’s statement.

Now, Spotify has to hope this solution is enough to keep everyone happy as it continues to balance both sides of its business.

“A very real financial impact by Young and Mitchell”

Like Netflix, Spotify is the market leader and doesn’t need to fear a mass exodus of talent: Last year, recorded music revenues in the United States came in at $12.2 billion — of that $7 billion came from paid subscriptions. So pulling your music from the top streaming music service to make a point makes a dent in the checkbook for these artists.

In fact, according to estimates from Billboard, Young and Mitchell are both giving up more than 10% of their annual revenue by making this move.

Another reason Spotify doesn’t need to worry too much: Most artists lack control of their streaming rights. They have no say where their music appears.

“If the recordings are controlled by a record label then it’s not just up to an artist to pull their music if they want,” Serona Elton, professor of music industry at the University of Miami’s Frost School of Music, told CNN Business. “However, there are some contracts that allow artists more decision-making and power, but those very rare.”

Still, when big-named artists leave, that’s not good for Spotify’s business.

“Since Young and Mitchell haven’t been in the news much lately, this story might drive streams of their tracks on other services,” Elton said.

If fans of those artists can’t hear their music on that service, they may go to one of the company’s rivals like Apple Music. In fact, Apple took advantage of the situation on Friday and trolled Spotify by calling itself “the home of Neil Young.”

“I’ve never tried to do anything with this podcast other than just talk to people”

So why not just pull Rogan from the platform? Spotify has plenty of podcasts to choose from, not to mention more than 70 million tracks to listen to.

Like Chappelle on Netflix, Rogan is incredibly popular on Spotify. And pulling the show may do more harm than good to the company’s bottom line.

Rogan signed a multi-year exclusive licensing deal with Spotify in May. A deal worth more than $100 million, according to The Wall Street Journal.

In October, Spotify also said that “The Joe Rogan Experience” is the No. 1 show in its English-speaking markets and it “outperformed our audience expectations,” after the podcast was added to Spotify on September 1.

Ek said in October that the podcast has been an “overall great success so far.”

Also, if Spotify pulls a show like Rogan’s that could lead to a tough precedent for other creators it works with in the podcasts space. It could also make it more difficult to recruit exclusive hosts that may help drive new subscriptions in the future. And, in this polarized culture, Spotify doesn’t want to alienate half of America.

On Monday, Rogan responded to the backlash saying “he’s not trying to promote misinformation.”

“I’ve never tried to do anything with this podcast other than just talk to people and have interesting conversations,” Rogan said in a 9-minute video posted to Instagram on Sunday.

Rogan also thanked Spotify for supporting him.

“I’m very sorry that this is happening to them, and that they’re taking so much heat from it,” he said.

The-CNN-Wire
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