As our Equity podcast recently asked, “how many times should Spotify step on a rake?”
The streaming service is learning the hard way that it’s counterintuitive to act as both a platform and a publisher — now, in trying to reassert its status as a platform, it’s acting even more like a publisher.
In 2020, Spotify was celebrating its success when it signed one of the most popular podcasters, Joe Rogan, to an exclusive multi-year podcasting deal worth $100 million for “The Joe Rogan Experience”. But the controversial presenter has repeatedly platform misinformation about COVID-19, recently leading 270 doctors and scientists to sign a open letter to Spotify demanding that it institute disinformation policies, prompting high-profile figures like Neil Young and Joni Mitchell to pull their content off Spotify.
Spotify published late platform rules — something that the most dominant music streaming service and podcast should probably have gone public by now – that prohibit the dissemination of false or misleading information about COVID-19 and other diseases.
As a result, Rogan asked Spotify to remove more than 100 episodes of “The Joe Rogan Experience” for various reasons, including the use of racial slurs. Many of the insults were uttered on older shows, but still, in January, Rogan made controversial comments by sharing your views on the use of the word “Black”.
Now, in a bid to buy Spotify some goodwill during a PR crisis, Spotify CEO Daniel Ek has pledged to invest $100 million in audio content from underrepresented groups. This is a nice gesture, but it also means that Spotify is inadvertently leaning towards its decision to act as publisher.
The blurry line between publishers and platforms
Spotify creates an inherent tension in positioning itself as both a platform and a publisher.
A platform would be something like Twitter – anyone can post a tweet as long as they follow the platform’s guidelines. But if someone posts what many would consider a “bad opinion” – like saying that Scooter Braun did nothing wrong in the Taylor Swift dominates controversy, for example – this does not mean that Twitter itself also endorses this opinion. But when money and editorial curation are involved, the company becomes responsible for the results of its financial choices. Because Spotify funneled $100 million into Joe Rogan’s content — which is exactly the same amount it’s now promising a vague collection of underrepresented creators — they’re not unbiased; they are literally paying him to talk to far-right conspiracy theorists.
Spotify wants to have both. CEO Daniel Ek it says Spotify is a platform for Joe Rogan’s exclusive podcast, but it’s a publisher for the studios it owns, like Gimlet, The Ringer, and Parcast.
“I understand the premise that because we have an exclusive agreement with him, it’s all too easy to conclude that we endorse every word he says and believe the opinions expressed by his guests. This is absolutely not the case,” Ek he said in the city hall of a company. He later added, “A publisher has editorial control over a creator’s content. They can act on the content before it’s even published. They can edit, they can curate, they can change the guest, they can even decide not to publish completely. And even though ‘JRE’ is exclusive content, it’s licensed content.”
Still, when its content library switched to Spotify, the company removed at least forty episodeswhich featured guests such as Proud Boys founder Gavin McInnes, conspiracy theorist David Seaman and Stefan Molyneux, whom the Southern Poverty Law Center describe as an alt-right extremist who amplifies eugenics and white supremacy. According to Ek’s speech, Spotify currently does not have editorial control over Joe Rogan’s podcast – they are not involved in editing, booking and producing the show. But that doesn’t exempt Spotify from liability. The company may not be working with Rogan on a daily basis, but it still gave him $100 million to partner exclusively with Spotify.
However, as Rogan continues to become more popular, it is also a win for the Spotify service.
“In December, ‘The Joe Rogan Experience’ became exclusive to Spotify, generating a significant increase in viewership for the show on our platform. By the end of the year, The Joe Rogan Experience was the #1 podcast on our platform in 17 markets,” the company wrote in its statement. 4th quarter of 2020 shareholder letter. “While it is still early days, we are very encouraged by the performance of this content since its arrival on our platform, as it has spurred new user additions, activated first-time podcast listeners, and driven favorable engagement trends.”
Spotify has referenced Joe Rogan’s exclusive deal in every quarterly shareholder letter since the beginning of its exclusive deal. But there’s no mention of Rogan (or any other exclusive podcasting deal) on Spotify. last shareholders’ report, which was published last week.
Spotify is not the only company that acts as a publisher, but claims to be just a platform. Substack fell into the same trap. Repeatedly, the newsletter monetization company doubled down on its “in-house” content moderation policies. Substack does forbid some types of content such as pornography, spam, impersonation, posts that fund hateful initiatives or incite hateful violence, posts that promote illegal activities, and more. But the company was also criticized for cashing in on COVID-19 misinformation and yours transphobic author platform through its “Substack Pro” program, which offers cash advances to selected but undisclosed writers. In choosing which writers to pay an advance, Substack is inherently making editorial choices.
Netflix also had a hard time in the press in late 2021 when employees protested a new Netflix exclusive special by Dave Chapelle, in which the comedian made a number of hurtful and transphobic comments. B. Pagels-Minor, the strike organizer and global leader of black and trans employee resource groups, was fired from Netflix over the company’s alleged data leak. The leaked information in question appeared to be internal metrics from Chapelle’s special that appeared in a Bloomberg storywhich reported that Netflix spent $24.1 million for the one-time special.
Like Spotify, Netflix has decided to become a publisher, not just a platform – but Netflix isn’t ashamed of that. While Netflix hosts tons of content that its own studios haven’t produced, it’s also investing billions of dollars in original content. While Netflix subscription numbers have declined, they are still growing.
an identity crisis
Like Substack, Spotify is striking deals with people from various political perspectives – though it might platform Joe Rogan, Spotify too Make a deal with the Obamas to make exclusive content.
Spotify also scored a Exclusive $60 million contract with Alex Cooper, host of the “Call Her Daddy” podcast, which used to appear on Barstool Sports. Dax Shepard, host of “Armchair Expert”, also has a exclusive offer with Spotify, as well as Prince Harry and Meghan Markle. Ek’s commitment to invest $100 million in audio projects from underrepresented creators is also an editorial decision, although it appears Ek is using this to prove he’s not making editorial decisions.
Spotify maintains a 31% market share among music streamers, making it the most popular service available – but for a while, Spotify’s strategy to maintain that dominance has been to invest in podcasting. In Q2 2021 alone, its podcast ad revenue increased by 627%. In addition to its historic acquisition of Gimlet and Anchor for around $340 million, Spotify has earmarked another $400 to $500 million in 2019 specifically for other acquisitions in the podcasting space. The company has since acquired Parcast and The Ringer studios, along with podcast monetization platform Whooshkaa, discovery engine Podz, and podcast advertising company Megaphone.
No ethical consumption?
So where does that leave us in the Spotify-Rogan saga? Despite its current PR nightmare, Spotify still hasn’t lost much of its market share compared to other streaming services. However, when Spotify recently reported its fourth quarter financial results gave weak guidance on active users’ monthly expectations for the first quarter of 2022. As a result, stocks have fallen, indicating that this PR crisis could also turn into a business crisis.
Socially conscious consumers want to feel good about where their dollars go — but even as we approach week three of Rogan’s online rant, Spotify doesn’t seem to be much affected by all of this, despite the social media outrage.
This calls into question how much power consumers actually have (and how real the threat of cancel culture is for figures like Rogan). Even if Spotify had cut ties with Rogan, he could have resorted to a Offer of US$ 100 million from Rumble, a video company funded by Peter Thiel that describes itself as “immune to cancel culture”. This was probably just a PR stunt, which made Rumble’s SPAC outbreak. Rogan said that won’t leave Spotify, but the podcaster has such a huge audience that it would have been a great buy for Rumble even if they didn’t have as deep pockets as Spotify.
For consumers upset with Spotify, what are the alternatives? Apple Music, whose owner is constantly under fire for their exorbitant in-app purchase commissions? Amazon Music, which is part of a company with many labor problems name?
It’s possible that among Gen Z, this disillusionment with big technology could fuel independent creators. In podcasting, for example, listeners can directly support their favorite shows through memberships, tip jar donations, and more. But where do you listen to podcasts? Statistically, you probably use Spotify.