As our Equity podcast recently asked, “How many times must 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.
Back 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 host has repeatedly platformed misinformation about COVID-19, recently prompting 270 physicians and scientists to sign an open letter to Spotify demanding that it institute misinformation policies, which then led high-profile figures like Neil Young and Joni Mitchell to pull their content from Spotify.
Spotify belatedly published platform rules — something that the most dominant music and podcast streaming service probably should have made public already — which prohibit the spread of false or deceptive information about COVID-19 and other illnesses.
As a result, Rogan asked Spotify to remove over 100 episodes of “The Joe Rogan Experience” for various reasons, including the use of racial slurs. Many of the slurs were uttered in older shows, but still, as recently as January, Rogan has made controversial comments when sharing his opinions about the use of the word “Black.”
Now, in an attempt to buy Spotify some goodwill during a PR crisis, Spotify CEO Daniel Ek committed to investing $100 million into audio content from underrepresented groups. This is a good gesture, but it also means that Spotify is inadvertently leaning into its decision to act as a publisher.
The blurry line between publishers and platforms
Spotify creates an inherent tension as it postures itself as both a platform and a publisher.
A platform would be something like Twitter — anyone can post a tweet, so long as it follows the platform guidelines. But if someone posts what many would consider a “bad take” — like saying that Scooter Braun didn’t do anything wrong in the Taylor Swift masters controversy, for instance — that doesn’t mean Twitter itself also endorses that opinion. But when money and editorial curation is involved, the company becomes responsible for the results of their financial choices. Since Spotify funneled $100 million into Joe Rogan’s content — which happens to be the exact same amount that it is now pledging to a vague collection of underrepresented creators — they are not impartial; they’re literally paying him to talk to far-right conspiracy theorists.
Spotify wants to have it both ways. CEO Daniel Ek said Spotify is a platform for Joe Rogan’s exclusive podcast, but that it’s a publisher for studios it owns, like Gimlet, The Ringer and Parcast.
“I understand the premise that because we have an exclusive deal with him, it’s really easy to conclude we endorse every word he says and believe the opinions expressed by his guests. That’s absolutely not the case,“ Ek said in a company town hall. He later added, “A publisher has editorial control over a creator’s content. They can take action 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 altogether. And even though ‘JRE’ is an exclusive, it is licensed content.”
Still, when his library of content first moved over to Spotify, the company did remove at least 40 episodes, which featured guests like Proud Boys founder Gavin McInnes, conspiracy theorist David Seaman and Stefan Molyneux, whom the Southern Poverty Law Center describes as an alt-right extremist who amplifies eugenics and white supremacism. Per Ek’s speech, Spotify does not currently have editorial control over Joe Rogan’s podcast — they are not involved in editing, booking and producing the show. But that doesn’t absolve Spotify of responsibility. The company might not be working hands-on with Rogan on a daily basis, but they still gave him $100 million to partner with Spotify exclusively.
Yet as Rogan continues to become more popular, it’s a win for Spotify’s service, too.
“In December, ‘The Joe Rogan Experience’ became exclusive to Spotify, driving a meaningful uptick in audience for the show on our platform. As of year-end, The Joe Rogan Experience was the #1 podcast on our platform in 17 markets,” the company wrote in its Q4 2020 shareholder letter. “While it remains early days, we are very encouraged by the performance of this content since its arrival on our platform, as it has stimulated 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 start of his exclusive deal. But there’s no mention of Rogan (or any other exclusive podcasting deals) in Spotify’s most recent shareholder report, which was posted last week.
Spotify’s not the only company acting as a publisher, yet claiming to be just a platform. Substack has fallen into the same trap. Repeatedly, the newsletter monetization company has doubled down on its “hands-off” content moderation policies. Substack does prohibit some kinds of content, like pornography, spam, impersonation, posts funding hateful initiatives or inciting hateful violence, posts promoting illegal activities and more. But the company has also come under fire for profiting off of COVID-19 misinformation and its platforming of transphobic authors through its “Substack Pro” program, which provides select, but undisclosed writers with cash advances. In choosing which writers to pay an advance, Substack is making inherently editorial choices.
Netflix also had a rough moment in the press in late 2021, when employees protested a new Netflix-exclusive Dave Chapelle special, in which the comedian made a number of harmful, transphobic comments. B. Pagels-Minor, the organizer of the walkout and global lead of both the Black and Trans employee resource groups, was fired from Netflix due to allegedly leaking company data. The leaked information in question appeared to be internal metrics on Chapelle’s special that appeared in a story by Bloomberg, which reported that Netflix spent $24.1 million for the one-off special.
Like Spotify, Netflix made a decision to become a publisher, not just a platform — but Netflix isn’t shy about that. While Netflix hosts tons of content that its own studios didn’t produce, it’s also investing billions of dollars into original content. While Netflix subscription numbers have slowed, they’re still growing.
An identity crisis
Like Substack, Spotify is cutting deals with people from a variety of political perspectives — though it may platform Joe Rogan, Spotify also cut a deal with the Obamas to make exclusive content.
Spotify also inked a $60 million exclusive deal with Alex Cooper, host of the podcast “Call Her Daddy,” which used to appear on Barstool Sports. Dax Shepard, host of “Armchair Expert,” also has an exclusive deal with Spotify, as do Prince Harry and Meghan Markle. Ek’s commitment to invest $100 million into audio projects from underrepresented creators is an editorial decision too, even though it appears that Ek is using it to prove that he’s not making editorial decisions.
Spotify retains 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%. Aside from its landmark acquisition of Gimlet and Anchor for around $340 million, Spotify earmarked another $400-$500 million in 2019 specifically for other acquisitions in the podcasting space. Since then, the company has acquired the studios Parcast and The Ringer, along with podcast monetization platform Whooshkaa, discovery engine Podz and podcast advertising company Megaphone.
No ethical consumption?
So where does this leave us in the Spotify-Rogan saga? Despite its current PR nightmare, Spotify hasn’t yet lost much of its market share compared to other streaming services. However, when Spotify recently reported its fourth-quarter financial results, it gave weak guidance on monthly active user expectations for Q1 2022. The stock tumbled as a result, indicating that this PR crisis could become a business crisis, too.
Socially-conscious consumers want to feel good about where their dollars go — but even as we head into the third week of online Rogan discourse, Spotify doesn’t seem to be too affected by all this, despite social media outrage.
It calls into question how much power consumers really have (and how real the threat of cancel culture is for figures like Rogan). Even if Spotify were to have cut ties with Rogan, he could have fallen back on a $100 million offer from Rumble, a Peter Thiel-funded video company that describes itself as “immune to cancel culture.” This was likely just a PR stunt, which caused Rumble’s SPAC to surge. Rogan has said he won’t be leaving Spotify, but the podcaster has such a large audience that it would’ve been a huge acquisition for Rumble, even if they might not have as deep pockets as Spotify.
For consumers upset with Spotify, what are the alternatives? Apple Music, whose owner is constantly under fire for its exorbitant in-app purchase commissions? Amazon Music, which is part of a company with too many labor issues to name?
It’s possible that among Gen Z, this disillusionment with Big Tech could power 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.