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When Joe Rogan offends you, Spotify profits from it

May 03, 2021

Joe Rogan has a lot of opinions. Chances are you don't agree with all of them.

That is what makes him so popular, and why Spotify is paying him tens of millions of dollars a year. It's also why he's a constant thorn in the company's side.

On a recent episode of his podcast, Rogan said he understood why a healthy 21-year-old wouldn't want to get vaccinated. Dr. Anthony Fauci rebutted Rogan, and deemed the perspective selfish.

Rogan then clarified his comments, describing himself as a buffoon who is routinely drunk or stoned while taping his show and doesn't think before he speaks. He didn't quite say that 21-year-olds should get vaccinated, but he acknowledged there was logic to the idea.

Spotify has remained quiet. The company said it had no conversations with Rogan about the episode, or about his follow-up remarks. When I asked CEO Daniel Ek about Rogan this past week, here is what he said:

"I don't have any specific comments on that. What I will say is we have 8 million creators, and hundreds of millions of pieces of content. We have a content policy, and we do remove pieces that violate it."

It's a classic punt, which should surprise no one. Ek doesn't want to defend Rogan, and then get condemned for feeding resistance to a vaccine that is needed to bring a global pandemic under control. He doesn't want to criticize Rogan, and aggravate his biggest star.

The statement also reflects a clash between Spotify's twin identities -- that of a tech company and a media company. This will be a growing challenge for Spotify now that it's acquired a bunch of podcasting studios, and struck exclusive deals for many shows.

Ek is a technologist by training, and his language positions Spotify as similar to Facebook or YouTube. These companies enable (almost) anyone to post a video or article, and are not legally responsible for what people post. They only intervene in extreme cases -- when someone crosses one of their self-imposed guidelines (or they get in enough trouble with the press).

Spotify is similar in that it is using its Anchor division to allow (almost) anyone to post a podcast. Spotify hosts 2.6 million shows, and some of those definitely have content that will make Spotify look bad. The company has taken down podcasts for spreading Covid misinformation.

But when it comes to Rogan, Spotify isn't like Facebook or YouTube. Spotify paid Rogan to be exclusive to its service, and has singled him out for attracting new users and driving ad sales. He is not just one of 8 million creators. While Spotify licenses Rogan's show instead of owning it, limiting its control over the editorial process, there is a big difference between Rogan and "Poopcast the Podcast." 

Imagine if ABC had said Roseanne Barr was just one of thousands of people on its network when she made racist remarks about Valerie Jarrett. (ABC also licensed "Roseanne," and then decided to proceed without her.) 

Spotify's Dawn Ostroff, who has worked in Hollywood most of her career, knows this game well. Of all the people I've spoken with about Rogan, she has been the most direct about where Spotify stands. Here's what she said last year when I asked her if she regrets signing the Rogan deal.

"Joe is the #1 podcaster in the world. He has a huge following. His audience speaks for itself. We are very happy with the deal. Like any of our content, all of Joe's episodes and shows have to adhere to our content policies. But he's done an incredible job building an audience."

There may come a time when Rogan says something so outrageous, offensive or dangerous that Ostroff and Ek decide it's better for their business to distance themselves. But for the time being, Spotify is very happy with Joe Rogan, whether you like it or not. – Lucas Shaw

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Endeavor goes public. Five questions with its executive chairman

Patrick Whitesell and Ari Emanuel

Photographer: Eric Charbonneau/Invision/AP/Shutterstock/Shutterstock

Endeavor, owner of the UFC and one of Hollywood's biggest talent agencies, went public this week. It becomes just the second talent agency to go public after the company that owned ICM went public three decades ago.

I spoke with Endeavor's executive chairman Patrick Whitesell on Thursday morning to chat about the company's future. Here's a brief summary:

You tried to go public more than a year ago and called it off. What's different this time about your company and the market?

The biggest difference between then and now is the entire Ultimate Fighting Championship is part of Endeavor. One of the things we learned in 2019 is investors coveted it. Instead of owning 50.1%, we now own all of it.

Your company is a hodgepodge of a lot of different assets. How do they all make sense together? What am I buying if I invest in Endeavor?

It may look like that to you on the outside, but we think the value of the platform and our different resources allow us to do more things for the client and take them across multiple businesses. Or, in the case of UFC, turbo charge a business already going well.

Live events account for a huge part of your business. What's the timeline for their full return?

It varies sector to sector. Broadway is trying to open at the end of the year. We're looking at the fall where we see a lot of music acts starting to book dates. Barring any setback with the virus, which none of us can predict, we're going into the back part of this year and into 2022 with it looking really bright.

You started as an agent, and we've seen a lot of changes in that business in the past year. Many of your employees left to become managers. What is the future of the representation business, and how do you convince people to be agents?

We had a handful of people become managers and we still work with them. The clients have stayed with us. When a lot of people go to be a manager, it's more of a lifestyle thing. Maybe they want to produce. Maybe they want to work with fewer clients. Maybe they want to work on their own time and schedule. We've been adding agents and hiring since then; there's no shortage of people wanting to work at our company.

There's more money being spent on content, which is great if you are a representative.

Even with profit participation for your clients becoming rarer and rarer?

The model is always shifting. If you go back in time, there was a movie business. Then DVDs became a new revenue stream. Now they buy you out up front. A lot of the time that's a better deal. Every time there's been disruption, it's been to the benefit of creators and stars.

YouTube is about to be bigger than Netflix

Alphabet Inc. said YouTube generated $6 billion in advertising sales in the first quarter of the year, up 49% from a year ago. That doesn't include its subscription sales. YouTube TV has more than 3 million subscribers, and YouTube Premium/Music has more than 30 million.

If YouTube maintains its current pace, it will surpass Netflix in sales pretty soon. (Netflix generated $7.1 billion in sales in the first quarter.) YouTube is already much bigger than Netflix in a couple other respects: users and watch time. People spend more time watching YouTube every day than Netflix.

We covered optimism about the advertising market in a recent edition, and this past week of earnings backed it up. Facebook reported ad sales growth of 46%, while Amazon's ad business grew 77%. Amazon's advertising business is now bigger than YouTube. (TV-based media companies aren't benefiting as much.)

The numbers

  1. The No. 1 movie in the world is China's "My Love." The top movie in the U.S. is  "Demon Slayer: Mugen Train," a Japanese anime title that was one of the top movies in the world last year.
  2. The biggest song in the world is Lil Nas X's "Montero." It's ruled the Spotify charts for three weeks in a row, narrowly edging Justin Bieber's "Peaches."
  3. The most popular TV show in the U.S. this past week was the NFL draft, which drew a bigger audience than the Oscars.

Spotify's next frontier

The Swedish audio company is planning a big push into live, social audio. From our story this week:

The company aims to hire more than 100 people to work on the effort, and has begun talking to talent about exclusive shows. The idea is to capitalize on a new market popularized by Discord and Clubhouse, which let users participate in live audio chats — a 21st century version of call-in radio shows. 

Just last month, Spotify announced it was buying Betty Labs, the owner of the Locker Room app, which sports journalists and fans use to discuss major games after they happen. Spotify is already talking to hosts of its in-house podcasts about developing ideas for the new version of the app. Spotify expects to pay some talent several hundred thousand dollars to host shows.

The NHL's new home

AT&T's WarnerMedia struck a deal to put the NFL on its cable networks TNT and TBS, as well as its streaming service HBO Max. The company paid about 200% more than Comcast, which previously had the rights.

Hockey gives AT&T another sport that it can use to charge cable providers more for its channels, and a reason for millions of hockey fans to pay for HBO Max. 

Deals, deals, deals

  • A big week for music deals: Blackstone acquired eOne Music from Hasbro, and Concord acquired Downtown's music catalog. If all those names are gibberish to you, know this: These two deals are worth more than $750 million combined, and are just the latest example of soaring value for music copyrights.
  • DraftKings acquired the rights to distribute Dan LeBatard's podcast for $50 million, as the gambling company inches into media.
  • Legendary Entertainment, producer of "Godzilla vs. Kong," has hired the bank LionTree to explore potential deals.

Weekly playlist

Have you ever had the experience of hearing a song, recognizing it from a modern rap song that sampled it, and then realizing you like the original as much if not more? That's how I feel about Eddie Kendricks's "Intimate Friends," which has been sampled by both Drake and 213. Shout out to all the 213 stans.
 

 

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