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Joe Rogan & Spotify | The Most Expensive Podcast In The World

Jul 22, 2022
Business
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21
minutes

He is the world's highest-paid podcaster, and his podcast was acquired by Spotify for a reported $200 million in 2020.

But who actually is Joe Rogan, and what does this deal mean for independent podcasts?

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[00:00:00] Hello, hello hello, and welcome to English Learning for Curious Minds, by Leonardo English. 

[00:00:12] The show where you can listen to fascinating stories, and learn weird and wonderful things about the world at the same time as improving your English.

[00:00:21] I'm Alastair Budge, and today we are going to be talking about Joe Rogan and Spotify.

[00:00:28] In May of 2020 Spotify announced that it had acquired the exclusive rights to a podcast by a man called Joe Rogan. 

[00:00:38] The amount Spotify reportedly paid for it was initially thought to be $100 million, but it’s now thought to have been double this amount, with the company paying about $200 million to have this one podcast on Spotify.

[00:00:55] So the question we are going to ask ourselves in this episode is…why? 

[00:01:00] Why did Spotify pay so much money for one podcast, was it worth it, and what does the future hold for podcasts on Spotify? 

[00:01:10] Ok then, Joe Rogan and Spotify.

[00:01:16] Now, you may well be listening to this episode on Spotify. 

[00:01:20] Up to half of the listeners of this show use Spotify to listen to it, and this percentage, at least for English Learning for Curious Minds, has been increasing almost every month.

[00:01:32] But until relatively recently, until a few years ago, you couldn’t even listen to podcasts on Spotify. 

[00:01:40] It was somewhere to listen to your favourite music, somewhere to make playlists, and you went elsewhere, you went to another app to listen to podcasts.

[00:01:51] Spotify wanted to change that, and since 2019 Spotify has spent around $1 billion dollars trying to make its app the go-to place for people to listen to podcasts.

[00:02:04] It has bought podcast production companies, it has bought podcast technology companies, podcast advertising companies, but it’s most high-profile acquisition, the most famous “thing” it has bought was one podcast, the “Joe Rogan Experience”, which is what we’ll be talking about today.

[00:02:24] Before we get into why Joe Rogan, it’s useful to have a quick reminder of how Spotify’s business model works, which will help us understand why it decided to pay more money than it had ever paid before for a single podcast.

[00:02:41] So, Spotify is a music streaming app. 

[00:02:45] Anyone can download it and listen to their favourite songs. 

[00:02:49] You can listen to songs for free, but you have adverts after every few songs, and you have a limited number of times you can skip back and forward.

[00:03:00] Or, if you want the full functionality of the service, you can buy a “Premium” version, which gives you unlimited skips and no adverts.

[00:03:10] Simple enough, and if you are one of the hundreds of millions of Spotify users, you knew this already.

[00:03:17] But what you might not have known is how exactly Spotify makes money, or rather, how it loses money.

[00:03:26] With the Free version of Spotify, which about 60% of Spotify users are on, Spotify makes money every time an advert is played. But every time you listen to a song, Spotify needs to pay the record label for that song.

[00:03:44] Now, you may have read articles about how little this amount of money actually is, and how little the artists actually make from Spotify.

[00:03:53] But what perhaps you didn’t know is that Spotify actually loses money overall on every free user. 

[00:04:02] For the finance nerds out there, Spotify has a negative gross margin, a gross margin of -1.5%, for every non-Premium user.

[00:04:14] The Premium, on the other hand, is highly profitable, and makes up about 90% of Spotify’s revenue.

[00:04:23] One way of looking at this is that the adverts exist primarily to annoy you, and push you into upgrading your subscription to Premium.

[00:04:33] So, why all this chat about Spotify’s business model?

[00:04:38] Well, because it’s helpful to understand why Spotify is interested in podcasts.

[00:04:45] If Spotify owns the rights to the content its users are listening to, it doesn’t need to pay when users listen to it. It can collect the money from advertising or from the Premium subscription without having to pay anything.

[00:05:00] And this is where podcasts come in.

[00:05:03] Now, the business model for the majority of podcasts is advertising. A podcast will go to a business and say “hey, I’ll tell my listeners to buy your insurance, or energy drink or vitamin pills, and you pay me a certain amount of money”. 

[00:05:21] Depending on how many downloads a podcast has and how dedicated and valuable its listeners are, the amount it can charge varies.

[00:05:30] And the podcast with both an incredibly large number of listeners and die-hard loyal and dedicated fans is one called the Joe Rogan Experience. 

[00:05:42] Now, you may have heard of this podcast before, and perhaps you’ve even listened to it. 

[00:05:48] It wouldn’t be surprising, as it has been for several years the most popular podcast in the world, with an estimated 200 million downloads every month.

[00:06:00] The Joe Rogan Experience has been going since 2009. 

[00:06:04] It’s an interview-style podcast, where Joe Rogan interviews people from a wide range of backgrounds, often with controversial viewpoints.

[00:06:16] He has interviewed Elon Musk, where the pair famously smoked cannabis on air

[00:06:21] He interviewed the whistleblower Edward Snowden, the disgraced cyclist, Lance Armstrong, and he even interviewed the famous and also disgraced boxer, Mike Tyson.

[00:06:34] Joe Rogan himself is an interesting character. He was an actor and comedian, then became a commentator for UFC, the American Mixed Martial Arts show.

[00:06:46] He isn’t tall, but he is a big, muscly guy with tattoos all up his arms. 

[00:06:52] He looks like the sort of person you wouldn’t want to pick a fight with, and looks very different to the sort of person that people were used to seeing as a talk-show host

[00:07:04] And, despite what other criticisms people might have of him, he is an excellent interviewer. 

[00:07:12] He has done almost 2000 podcast episodes, with episodes ranging anywhere from 1 to 5 hours long, so he certainly has had time to practise.

[00:07:24] But he has this remarkable down-to-earth nature, almost like a guy you would meet at a bar who is just great at asking questions, and can keep a conversation going for hours on end, for a long period of time.

[00:07:39] And clearly, his approach works.

[00:07:43] His fans, who are predominantly young men, hang on his every word, they trust him, if he says something, or they hear something on his show, they are much more likely to believe it than if they saw it on CNN or a more mainstream media outlet. 

[00:08:01] This will be important later on.

[00:08:04] This combination of a very large and engaged audience put him on Spotify’s radar.

[00:08:11] If it could “own” Joe Rogan, then it could make the tens of millions of dollars that Joe Rogan made every year from advertising.

[00:08:19] But, much more importantly, if it could force Joe Rogan’s loyal audience to use Spotify, not any other podcast app, then it would be able to bring tens of millions of new users to the app. 

[00:08:35] These new users would hopefully start to listen to music on the app, probably on the free version, but like 40% of all Spotify users, they would get annoyed with the perpetual adverts and get pushed into the more profitable Premium subscription.

[00:08:53] So, after extended negotiations, reportedly with Joe Rogan initially unhappy with the offer from Spotify, on May 19th of 2020, Spotify announced that it had acquired the exclusive rights to stream The Joe Rogan Experience. The media reported the price tag as $100 million, but it’s now thought to be about double that.

[00:09:19] To commentators at the time, it seemed like a lot of money, even at the lower $100 million mark, but Spotify clearly thought that the bet would pay off, that they would make money from it. So, has it?

[00:09:35] Well, it certainly didn’t get off to a good start.

[00:09:39] A major part of Joe Rogan’s appeal was that he was a controversial character, and he was unafraid to have guests with controversial viewpoints on his show.

[00:09:51] With a 10-year history, it wasn’t hard for people to find Joe Rogan episodes from the back catalogue with controversial guests and controversial viewpoints.

[00:10:03] And when he moved to Spotify, Rogan vowed that the show wasn’t going to change. 

[00:10:09] It wasn’t going to become some clean, professional interview-style show like the tens of thousands of others that were out there because that wasn’t Joe Rogan, and that wasn’t what people wanted to listen to.

[00:10:23] People wanted the raw, messy, unedited interview. They wanted conversations that would go on for hours at a time, they wanted Joe Rogan to interview people that they would never see on TV.

[00:10:38] And Joe Rogan, as he promised, didn’t change. 

[00:10:42] He continued to be divisive, and this culminated in April of 2021 when he suggested that young, healthy people should not get the COVID-19 vaccine.

[00:10:55] To Joe Rogan fans and watchers, it was hardly surprising that he would take such a viewpoint

[00:11:02] His opinions towards traditional medicine have always been slightly sceptical, and Spotify knew this when it bought his show.

[00:11:12] The critics, however, said that this was reckless and dangerous by Spotify, and that it was spreading COVID misinformation via the Joe Rogan Experience podcast.

[00:11:24] Initially, Spotify put up its hands and said “hey, we’re just the streaming service, we don’t have editorial control over Joe Rogan”, but this didn’t cut the mustard, it wasn’t enough.

[00:11:38] A group of 270 scientists and healthcare professionals wrote an open letter to Spotify expressing their concern, and then in January of 2022 several high-profile musicians, including Neil Young and Joni Mitchell, started removing their music from Spotify.

[00:11:59] There were calls for Spotify to drop Joe Rogan altogether, calls that he was too controversial for an uncontroversial company like Spotify to continue to support.

[00:12:11] Spotify knew that its attractiveness as a service relies on having lots of music available on it. If people can’t listen to their favourite musicians on Spotify, well they’ll go somewhere else.

[00:12:25] It was, understandably, a worrying time, but like these things tend to do, the controversy fizzled out, and Neil Young and Joni Mitchell’s boycott of the company didn’t lead to a mass exodus by other artists.

[00:12:42] This controversy, however, did raise important questions about the line, the division, between publisher and platform.

[00:12:52] A publisher is something that actually publishes content and is responsible for it. 

[00:12:59] If an article is published in The Guardian newspaper, The Guardian has chosen to publish it, if the article is misleading or controversial or wrong, The Guardian takes responsibility for it, it doesn’t put up its hands and say “hey, we’re just a newspaper, you should blame the journalist who wrote it”.

[00:13:21] A platform on the other hand, is something like Twitter, YouTube or Facebook. Given the instant nature of posting something on those platforms, and the sheer amount of content that is uploaded every second, it is very hard for these companies to actually police, to monitor, what people are uploading, if you even believe that it should be policed, that is.

[00:13:46] Of course, this is a much more complicated subject than we have time for in this episode, but the point to underline is that the Spotify and Joe Rogan situation was a little different.

[00:13:58] For most podcasts on the Spotify app, Spotify can rightfully say that it doesn’t have any editorial control over what is said in the podcast, because, well, there are millions to choose from and Spotify simply provides a convenient way for people to listen to them.

[00:14:16] With Joe Rogan, Spotify not only had the exclusive rights to it, but it made money from it.

[00:14:23] Surely, the critics said, this meant that it had more responsibility?

[00:14:29] Spotify eventually decided to remove over 100 of Joe Rogan’s most controversial episodes from its service, but this again put it into the dangerous category of “publisher” rather than “platform”. 

[00:14:44] If it says it’s just a platform and not responsible for what Joe Rogan says, yet it pays him $200 million to have controversial guests and opinions and it has the right to remove episodes, can it really continue to claim to be a platform?

[00:15:02] It’s certainly an interesting debate, and one without a definitive answer.

[00:15:08] Something that does seem clearer, though, is that Spotify’s big bet into podcasting is showing early promise, it is looking encouraging.

[00:15:19] Spotify’s podcast advertising business generated €200 million in revenue in 2021, it was up 300% from the previous year.

[00:15:30] There are now 4 million podcasts available on Spotify, including this one of course, and Spotify users are increasingly listening to podcasts as well as music.

[00:15:41] And it’s doing exactly what it hoped in terms of encouraging users to turn Spotify into their go-to app for listening to anything audio.

[00:15:52] And although Spotify doesn’t currently put adverts between podcast episodes, analysts have suggested that this won’t be the case forever.

[00:16:02] Spotify knows that the main reason people upgrade to their Premium subscription is to get rid off these adverts, so when it feels confident that there are enough people listening to podcasts on Spotify, it can add advertising to push people towards upgrading their accounts, and that will be when the money starts to roll in, theoretically at least.

[00:16:26] And because it has the exclusive rights to shows like the Joe Rogan Experience, people can’t simply go to another podcast app, because they'll have to stay with Spotify to listen to their favourite show.

[00:16:39] What’s more, and this is one of the major reasons why podcasting is so attractive to Spotify, Spotify doesn’t pay podcasters when someone listens to the show.

[00:16:50] Unlike songs, where Spotify pays between 0.3 and 0.5 cents every time a song is played, Spotify pays nothing to podcasts, so it has considerably lower costs when someone listens to a podcast compared to when they listen to a song.

[00:17:08] So, where does this leave Spotify, where does this leave Joe Rogan, and where does it leave the podcast industry?

[00:17:16] For Spotify, it looks like a canny bet, a sensible decision. Spotify’s plan to become the go-to app for everything audio looks to be underway, and even though it hasn’t been complete plain sailing, it hasn't been completely easy, there have been some difficulties with Joe Rogan, there are encouraging results.

[00:17:40] For Joe Rogan, there are some critics that said he should have stayed independent, and that he was already earning tens of millions of dollars a year without having to be answerable to anyone, but he no doubt wasn’t too upset with a cheque for a couple of hundred million dollars.

[00:17:58] And for all of the other millions of podcasts out there, such as this one, what does the future hold, and how does Joe Rogan and Spotify change this? 

[00:18:09] Well, one of the great things about podcasts has historically been that they’re available anywhere. There are dozens of podcast apps, and every podcast is available everywhere, to anyone. 

[00:18:22] Not only does this mean that there isn’t one company that controls access to podcasts, but for podcast listeners it means that it’s very easy to change apps, and for podcast producers, they can focus on making a great show rather than pleasing an algorithm

[00:18:40] What Spotify is doing is…quite scary for lots of independent podcasts. 

[00:18:46] It could, in theory, make podcasts pay to ensure their new episodes are seen by their followers, in a similar way to Facebook.

[00:18:55] It could make podcasts pay every time an episode is listened to. 

[00:18:58] It could charge a monthly fee to podcasters. 

[00:19:02] It could add inappropriate adverts between episodes and collect 100% of the money from them, further squeezing independent podcasters.

[00:19:12] Talking about this show in particular, English Learning for Curious Minds, Spotify has brought an increasing number of listeners to it. 

[00:19:20] Perhaps you discovered it on Spotify, and in that case, great, I’m happy that Spotify decided to recommend it to you.

[00:19:29] But when any platform gets too powerful it can be bad news for independent businesses, so one can only hope that Spotify has the best interests of independent podcasters in mind.

[00:19:42] So, back to Joe Rogan, the highest-paid podcaster in the world, with a show Spotify wanted so much it was prepared to pay hundreds of millions of dollars to get its hands on it.

[00:19:54] If you haven’t listened to it, I’d definitely recommend checking it out. 

[00:19:58] Of course, you have to go to Spotify to get it, but there are almost 2,000 episodes to choose from. 

[00:20:05] They’re long, the language can be tricky to understand, it is full of controversial figures and viewpoints, but it is certainly entertaining.

[00:20:15] Give it a listen.

[00:20:16] It’s full of adverts, but it is free to listen to.

[00:20:20] If you do, just remember that you’ll be listening to the most expensive podcast in the world.

[00:20:28] OK then, that is it for today's episode on Joe Rogan & Spotify.

[00:20:34] I know it’s a bit of a different topic to our normal ones, but especially for those of you interested in the business side of podcasting, I hope you enjoyed it.

[00:20:44] As always, I would love to know what you thought of this episode. 

[00:20:47] Have you listened to the Joe Rogan podcast before?

[00:20:51] Do you like it? Can you see why it is so popular?

[00:20:54] What do you think Spotify’s responsibilities are as a publisher, or is it a platform?

[00:20:59] I would love to know, so let’s get this discussion started. 

[00:21:03] You can head right into our community forum, which is at community.leonardoenglish.com and get chatting away to other curious minds.

[00:21:11] You've been listening to English Learning for Curious Minds, by Leonardo English.

[00:21:16] I'm Alastair Budge, you stay safe, and I'll catch you in the next episode.

[END OF EPISODE] 

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[00:00:00] Hello, hello hello, and welcome to English Learning for Curious Minds, by Leonardo English. 

[00:00:12] The show where you can listen to fascinating stories, and learn weird and wonderful things about the world at the same time as improving your English.

[00:00:21] I'm Alastair Budge, and today we are going to be talking about Joe Rogan and Spotify.

[00:00:28] In May of 2020 Spotify announced that it had acquired the exclusive rights to a podcast by a man called Joe Rogan. 

[00:00:38] The amount Spotify reportedly paid for it was initially thought to be $100 million, but it’s now thought to have been double this amount, with the company paying about $200 million to have this one podcast on Spotify.

[00:00:55] So the question we are going to ask ourselves in this episode is…why? 

[00:01:00] Why did Spotify pay so much money for one podcast, was it worth it, and what does the future hold for podcasts on Spotify? 

[00:01:10] Ok then, Joe Rogan and Spotify.

[00:01:16] Now, you may well be listening to this episode on Spotify. 

[00:01:20] Up to half of the listeners of this show use Spotify to listen to it, and this percentage, at least for English Learning for Curious Minds, has been increasing almost every month.

[00:01:32] But until relatively recently, until a few years ago, you couldn’t even listen to podcasts on Spotify. 

[00:01:40] It was somewhere to listen to your favourite music, somewhere to make playlists, and you went elsewhere, you went to another app to listen to podcasts.

[00:01:51] Spotify wanted to change that, and since 2019 Spotify has spent around $1 billion dollars trying to make its app the go-to place for people to listen to podcasts.

[00:02:04] It has bought podcast production companies, it has bought podcast technology companies, podcast advertising companies, but it’s most high-profile acquisition, the most famous “thing” it has bought was one podcast, the “Joe Rogan Experience”, which is what we’ll be talking about today.

[00:02:24] Before we get into why Joe Rogan, it’s useful to have a quick reminder of how Spotify’s business model works, which will help us understand why it decided to pay more money than it had ever paid before for a single podcast.

[00:02:41] So, Spotify is a music streaming app. 

[00:02:45] Anyone can download it and listen to their favourite songs. 

[00:02:49] You can listen to songs for free, but you have adverts after every few songs, and you have a limited number of times you can skip back and forward.

[00:03:00] Or, if you want the full functionality of the service, you can buy a “Premium” version, which gives you unlimited skips and no adverts.

[00:03:10] Simple enough, and if you are one of the hundreds of millions of Spotify users, you knew this already.

[00:03:17] But what you might not have known is how exactly Spotify makes money, or rather, how it loses money.

[00:03:26] With the Free version of Spotify, which about 60% of Spotify users are on, Spotify makes money every time an advert is played. But every time you listen to a song, Spotify needs to pay the record label for that song.

[00:03:44] Now, you may have read articles about how little this amount of money actually is, and how little the artists actually make from Spotify.

[00:03:53] But what perhaps you didn’t know is that Spotify actually loses money overall on every free user. 

[00:04:02] For the finance nerds out there, Spotify has a negative gross margin, a gross margin of -1.5%, for every non-Premium user.

[00:04:14] The Premium, on the other hand, is highly profitable, and makes up about 90% of Spotify’s revenue.

[00:04:23] One way of looking at this is that the adverts exist primarily to annoy you, and push you into upgrading your subscription to Premium.

[00:04:33] So, why all this chat about Spotify’s business model?

[00:04:38] Well, because it’s helpful to understand why Spotify is interested in podcasts.

[00:04:45] If Spotify owns the rights to the content its users are listening to, it doesn’t need to pay when users listen to it. It can collect the money from advertising or from the Premium subscription without having to pay anything.

[00:05:00] And this is where podcasts come in.

[00:05:03] Now, the business model for the majority of podcasts is advertising. A podcast will go to a business and say “hey, I’ll tell my listeners to buy your insurance, or energy drink or vitamin pills, and you pay me a certain amount of money”. 

[00:05:21] Depending on how many downloads a podcast has and how dedicated and valuable its listeners are, the amount it can charge varies.

[00:05:30] And the podcast with both an incredibly large number of listeners and die-hard loyal and dedicated fans is one called the Joe Rogan Experience. 

[00:05:42] Now, you may have heard of this podcast before, and perhaps you’ve even listened to it. 

[00:05:48] It wouldn’t be surprising, as it has been for several years the most popular podcast in the world, with an estimated 200 million downloads every month.

[00:06:00] The Joe Rogan Experience has been going since 2009. 

[00:06:04] It’s an interview-style podcast, where Joe Rogan interviews people from a wide range of backgrounds, often with controversial viewpoints.

[00:06:16] He has interviewed Elon Musk, where the pair famously smoked cannabis on air

[00:06:21] He interviewed the whistleblower Edward Snowden, the disgraced cyclist, Lance Armstrong, and he even interviewed the famous and also disgraced boxer, Mike Tyson.

[00:06:34] Joe Rogan himself is an interesting character. He was an actor and comedian, then became a commentator for UFC, the American Mixed Martial Arts show.

[00:06:46] He isn’t tall, but he is a big, muscly guy with tattoos all up his arms. 

[00:06:52] He looks like the sort of person you wouldn’t want to pick a fight with, and looks very different to the sort of person that people were used to seeing as a talk-show host

[00:07:04] And, despite what other criticisms people might have of him, he is an excellent interviewer. 

[00:07:12] He has done almost 2000 podcast episodes, with episodes ranging anywhere from 1 to 5 hours long, so he certainly has had time to practise.

[00:07:24] But he has this remarkable down-to-earth nature, almost like a guy you would meet at a bar who is just great at asking questions, and can keep a conversation going for hours on end, for a long period of time.

[00:07:39] And clearly, his approach works.

[00:07:43] His fans, who are predominantly young men, hang on his every word, they trust him, if he says something, or they hear something on his show, they are much more likely to believe it than if they saw it on CNN or a more mainstream media outlet. 

[00:08:01] This will be important later on.

[00:08:04] This combination of a very large and engaged audience put him on Spotify’s radar.

[00:08:11] If it could “own” Joe Rogan, then it could make the tens of millions of dollars that Joe Rogan made every year from advertising.

[00:08:19] But, much more importantly, if it could force Joe Rogan’s loyal audience to use Spotify, not any other podcast app, then it would be able to bring tens of millions of new users to the app. 

[00:08:35] These new users would hopefully start to listen to music on the app, probably on the free version, but like 40% of all Spotify users, they would get annoyed with the perpetual adverts and get pushed into the more profitable Premium subscription.

[00:08:53] So, after extended negotiations, reportedly with Joe Rogan initially unhappy with the offer from Spotify, on May 19th of 2020, Spotify announced that it had acquired the exclusive rights to stream The Joe Rogan Experience. The media reported the price tag as $100 million, but it’s now thought to be about double that.

[00:09:19] To commentators at the time, it seemed like a lot of money, even at the lower $100 million mark, but Spotify clearly thought that the bet would pay off, that they would make money from it. So, has it?

[00:09:35] Well, it certainly didn’t get off to a good start.

[00:09:39] A major part of Joe Rogan’s appeal was that he was a controversial character, and he was unafraid to have guests with controversial viewpoints on his show.

[00:09:51] With a 10-year history, it wasn’t hard for people to find Joe Rogan episodes from the back catalogue with controversial guests and controversial viewpoints.

[00:10:03] And when he moved to Spotify, Rogan vowed that the show wasn’t going to change. 

[00:10:09] It wasn’t going to become some clean, professional interview-style show like the tens of thousands of others that were out there because that wasn’t Joe Rogan, and that wasn’t what people wanted to listen to.

[00:10:23] People wanted the raw, messy, unedited interview. They wanted conversations that would go on for hours at a time, they wanted Joe Rogan to interview people that they would never see on TV.

[00:10:38] And Joe Rogan, as he promised, didn’t change. 

[00:10:42] He continued to be divisive, and this culminated in April of 2021 when he suggested that young, healthy people should not get the COVID-19 vaccine.

[00:10:55] To Joe Rogan fans and watchers, it was hardly surprising that he would take such a viewpoint

[00:11:02] His opinions towards traditional medicine have always been slightly sceptical, and Spotify knew this when it bought his show.

[00:11:12] The critics, however, said that this was reckless and dangerous by Spotify, and that it was spreading COVID misinformation via the Joe Rogan Experience podcast.

[00:11:24] Initially, Spotify put up its hands and said “hey, we’re just the streaming service, we don’t have editorial control over Joe Rogan”, but this didn’t cut the mustard, it wasn’t enough.

[00:11:38] A group of 270 scientists and healthcare professionals wrote an open letter to Spotify expressing their concern, and then in January of 2022 several high-profile musicians, including Neil Young and Joni Mitchell, started removing their music from Spotify.

[00:11:59] There were calls for Spotify to drop Joe Rogan altogether, calls that he was too controversial for an uncontroversial company like Spotify to continue to support.

[00:12:11] Spotify knew that its attractiveness as a service relies on having lots of music available on it. If people can’t listen to their favourite musicians on Spotify, well they’ll go somewhere else.

[00:12:25] It was, understandably, a worrying time, but like these things tend to do, the controversy fizzled out, and Neil Young and Joni Mitchell’s boycott of the company didn’t lead to a mass exodus by other artists.

[00:12:42] This controversy, however, did raise important questions about the line, the division, between publisher and platform.

[00:12:52] A publisher is something that actually publishes content and is responsible for it. 

[00:12:59] If an article is published in The Guardian newspaper, The Guardian has chosen to publish it, if the article is misleading or controversial or wrong, The Guardian takes responsibility for it, it doesn’t put up its hands and say “hey, we’re just a newspaper, you should blame the journalist who wrote it”.

[00:13:21] A platform on the other hand, is something like Twitter, YouTube or Facebook. Given the instant nature of posting something on those platforms, and the sheer amount of content that is uploaded every second, it is very hard for these companies to actually police, to monitor, what people are uploading, if you even believe that it should be policed, that is.

[00:13:46] Of course, this is a much more complicated subject than we have time for in this episode, but the point to underline is that the Spotify and Joe Rogan situation was a little different.

[00:13:58] For most podcasts on the Spotify app, Spotify can rightfully say that it doesn’t have any editorial control over what is said in the podcast, because, well, there are millions to choose from and Spotify simply provides a convenient way for people to listen to them.

[00:14:16] With Joe Rogan, Spotify not only had the exclusive rights to it, but it made money from it.

[00:14:23] Surely, the critics said, this meant that it had more responsibility?

[00:14:29] Spotify eventually decided to remove over 100 of Joe Rogan’s most controversial episodes from its service, but this again put it into the dangerous category of “publisher” rather than “platform”. 

[00:14:44] If it says it’s just a platform and not responsible for what Joe Rogan says, yet it pays him $200 million to have controversial guests and opinions and it has the right to remove episodes, can it really continue to claim to be a platform?

[00:15:02] It’s certainly an interesting debate, and one without a definitive answer.

[00:15:08] Something that does seem clearer, though, is that Spotify’s big bet into podcasting is showing early promise, it is looking encouraging.

[00:15:19] Spotify’s podcast advertising business generated €200 million in revenue in 2021, it was up 300% from the previous year.

[00:15:30] There are now 4 million podcasts available on Spotify, including this one of course, and Spotify users are increasingly listening to podcasts as well as music.

[00:15:41] And it’s doing exactly what it hoped in terms of encouraging users to turn Spotify into their go-to app for listening to anything audio.

[00:15:52] And although Spotify doesn’t currently put adverts between podcast episodes, analysts have suggested that this won’t be the case forever.

[00:16:02] Spotify knows that the main reason people upgrade to their Premium subscription is to get rid off these adverts, so when it feels confident that there are enough people listening to podcasts on Spotify, it can add advertising to push people towards upgrading their accounts, and that will be when the money starts to roll in, theoretically at least.

[00:16:26] And because it has the exclusive rights to shows like the Joe Rogan Experience, people can’t simply go to another podcast app, because they'll have to stay with Spotify to listen to their favourite show.

[00:16:39] What’s more, and this is one of the major reasons why podcasting is so attractive to Spotify, Spotify doesn’t pay podcasters when someone listens to the show.

[00:16:50] Unlike songs, where Spotify pays between 0.3 and 0.5 cents every time a song is played, Spotify pays nothing to podcasts, so it has considerably lower costs when someone listens to a podcast compared to when they listen to a song.

[00:17:08] So, where does this leave Spotify, where does this leave Joe Rogan, and where does it leave the podcast industry?

[00:17:16] For Spotify, it looks like a canny bet, a sensible decision. Spotify’s plan to become the go-to app for everything audio looks to be underway, and even though it hasn’t been complete plain sailing, it hasn't been completely easy, there have been some difficulties with Joe Rogan, there are encouraging results.

[00:17:40] For Joe Rogan, there are some critics that said he should have stayed independent, and that he was already earning tens of millions of dollars a year without having to be answerable to anyone, but he no doubt wasn’t too upset with a cheque for a couple of hundred million dollars.

[00:17:58] And for all of the other millions of podcasts out there, such as this one, what does the future hold, and how does Joe Rogan and Spotify change this? 

[00:18:09] Well, one of the great things about podcasts has historically been that they’re available anywhere. There are dozens of podcast apps, and every podcast is available everywhere, to anyone. 

[00:18:22] Not only does this mean that there isn’t one company that controls access to podcasts, but for podcast listeners it means that it’s very easy to change apps, and for podcast producers, they can focus on making a great show rather than pleasing an algorithm

[00:18:40] What Spotify is doing is…quite scary for lots of independent podcasts. 

[00:18:46] It could, in theory, make podcasts pay to ensure their new episodes are seen by their followers, in a similar way to Facebook.

[00:18:55] It could make podcasts pay every time an episode is listened to. 

[00:18:58] It could charge a monthly fee to podcasters. 

[00:19:02] It could add inappropriate adverts between episodes and collect 100% of the money from them, further squeezing independent podcasters.

[00:19:12] Talking about this show in particular, English Learning for Curious Minds, Spotify has brought an increasing number of listeners to it. 

[00:19:20] Perhaps you discovered it on Spotify, and in that case, great, I’m happy that Spotify decided to recommend it to you.

[00:19:29] But when any platform gets too powerful it can be bad news for independent businesses, so one can only hope that Spotify has the best interests of independent podcasters in mind.

[00:19:42] So, back to Joe Rogan, the highest-paid podcaster in the world, with a show Spotify wanted so much it was prepared to pay hundreds of millions of dollars to get its hands on it.

[00:19:54] If you haven’t listened to it, I’d definitely recommend checking it out. 

[00:19:58] Of course, you have to go to Spotify to get it, but there are almost 2,000 episodes to choose from. 

[00:20:05] They’re long, the language can be tricky to understand, it is full of controversial figures and viewpoints, but it is certainly entertaining.

[00:20:15] Give it a listen.

[00:20:16] It’s full of adverts, but it is free to listen to.

[00:20:20] If you do, just remember that you’ll be listening to the most expensive podcast in the world.

[00:20:28] OK then, that is it for today's episode on Joe Rogan & Spotify.

[00:20:34] I know it’s a bit of a different topic to our normal ones, but especially for those of you interested in the business side of podcasting, I hope you enjoyed it.

[00:20:44] As always, I would love to know what you thought of this episode. 

[00:20:47] Have you listened to the Joe Rogan podcast before?

[00:20:51] Do you like it? Can you see why it is so popular?

[00:20:54] What do you think Spotify’s responsibilities are as a publisher, or is it a platform?

[00:20:59] I would love to know, so let’s get this discussion started. 

[00:21:03] You can head right into our community forum, which is at community.leonardoenglish.com and get chatting away to other curious minds.

[00:21:11] You've been listening to English Learning for Curious Minds, by Leonardo English.

[00:21:16] I'm Alastair Budge, you stay safe, and I'll catch you in the next episode.

[END OF EPISODE] 

[00:00:00] Hello, hello hello, and welcome to English Learning for Curious Minds, by Leonardo English. 

[00:00:12] The show where you can listen to fascinating stories, and learn weird and wonderful things about the world at the same time as improving your English.

[00:00:21] I'm Alastair Budge, and today we are going to be talking about Joe Rogan and Spotify.

[00:00:28] In May of 2020 Spotify announced that it had acquired the exclusive rights to a podcast by a man called Joe Rogan. 

[00:00:38] The amount Spotify reportedly paid for it was initially thought to be $100 million, but it’s now thought to have been double this amount, with the company paying about $200 million to have this one podcast on Spotify.

[00:00:55] So the question we are going to ask ourselves in this episode is…why? 

[00:01:00] Why did Spotify pay so much money for one podcast, was it worth it, and what does the future hold for podcasts on Spotify? 

[00:01:10] Ok then, Joe Rogan and Spotify.

[00:01:16] Now, you may well be listening to this episode on Spotify. 

[00:01:20] Up to half of the listeners of this show use Spotify to listen to it, and this percentage, at least for English Learning for Curious Minds, has been increasing almost every month.

[00:01:32] But until relatively recently, until a few years ago, you couldn’t even listen to podcasts on Spotify. 

[00:01:40] It was somewhere to listen to your favourite music, somewhere to make playlists, and you went elsewhere, you went to another app to listen to podcasts.

[00:01:51] Spotify wanted to change that, and since 2019 Spotify has spent around $1 billion dollars trying to make its app the go-to place for people to listen to podcasts.

[00:02:04] It has bought podcast production companies, it has bought podcast technology companies, podcast advertising companies, but it’s most high-profile acquisition, the most famous “thing” it has bought was one podcast, the “Joe Rogan Experience”, which is what we’ll be talking about today.

[00:02:24] Before we get into why Joe Rogan, it’s useful to have a quick reminder of how Spotify’s business model works, which will help us understand why it decided to pay more money than it had ever paid before for a single podcast.

[00:02:41] So, Spotify is a music streaming app. 

[00:02:45] Anyone can download it and listen to their favourite songs. 

[00:02:49] You can listen to songs for free, but you have adverts after every few songs, and you have a limited number of times you can skip back and forward.

[00:03:00] Or, if you want the full functionality of the service, you can buy a “Premium” version, which gives you unlimited skips and no adverts.

[00:03:10] Simple enough, and if you are one of the hundreds of millions of Spotify users, you knew this already.

[00:03:17] But what you might not have known is how exactly Spotify makes money, or rather, how it loses money.

[00:03:26] With the Free version of Spotify, which about 60% of Spotify users are on, Spotify makes money every time an advert is played. But every time you listen to a song, Spotify needs to pay the record label for that song.

[00:03:44] Now, you may have read articles about how little this amount of money actually is, and how little the artists actually make from Spotify.

[00:03:53] But what perhaps you didn’t know is that Spotify actually loses money overall on every free user. 

[00:04:02] For the finance nerds out there, Spotify has a negative gross margin, a gross margin of -1.5%, for every non-Premium user.

[00:04:14] The Premium, on the other hand, is highly profitable, and makes up about 90% of Spotify’s revenue.

[00:04:23] One way of looking at this is that the adverts exist primarily to annoy you, and push you into upgrading your subscription to Premium.

[00:04:33] So, why all this chat about Spotify’s business model?

[00:04:38] Well, because it’s helpful to understand why Spotify is interested in podcasts.

[00:04:45] If Spotify owns the rights to the content its users are listening to, it doesn’t need to pay when users listen to it. It can collect the money from advertising or from the Premium subscription without having to pay anything.

[00:05:00] And this is where podcasts come in.

[00:05:03] Now, the business model for the majority of podcasts is advertising. A podcast will go to a business and say “hey, I’ll tell my listeners to buy your insurance, or energy drink or vitamin pills, and you pay me a certain amount of money”. 

[00:05:21] Depending on how many downloads a podcast has and how dedicated and valuable its listeners are, the amount it can charge varies.

[00:05:30] And the podcast with both an incredibly large number of listeners and die-hard loyal and dedicated fans is one called the Joe Rogan Experience. 

[00:05:42] Now, you may have heard of this podcast before, and perhaps you’ve even listened to it. 

[00:05:48] It wouldn’t be surprising, as it has been for several years the most popular podcast in the world, with an estimated 200 million downloads every month.

[00:06:00] The Joe Rogan Experience has been going since 2009. 

[00:06:04] It’s an interview-style podcast, where Joe Rogan interviews people from a wide range of backgrounds, often with controversial viewpoints.

[00:06:16] He has interviewed Elon Musk, where the pair famously smoked cannabis on air

[00:06:21] He interviewed the whistleblower Edward Snowden, the disgraced cyclist, Lance Armstrong, and he even interviewed the famous and also disgraced boxer, Mike Tyson.

[00:06:34] Joe Rogan himself is an interesting character. He was an actor and comedian, then became a commentator for UFC, the American Mixed Martial Arts show.

[00:06:46] He isn’t tall, but he is a big, muscly guy with tattoos all up his arms. 

[00:06:52] He looks like the sort of person you wouldn’t want to pick a fight with, and looks very different to the sort of person that people were used to seeing as a talk-show host

[00:07:04] And, despite what other criticisms people might have of him, he is an excellent interviewer. 

[00:07:12] He has done almost 2000 podcast episodes, with episodes ranging anywhere from 1 to 5 hours long, so he certainly has had time to practise.

[00:07:24] But he has this remarkable down-to-earth nature, almost like a guy you would meet at a bar who is just great at asking questions, and can keep a conversation going for hours on end, for a long period of time.

[00:07:39] And clearly, his approach works.

[00:07:43] His fans, who are predominantly young men, hang on his every word, they trust him, if he says something, or they hear something on his show, they are much more likely to believe it than if they saw it on CNN or a more mainstream media outlet. 

[00:08:01] This will be important later on.

[00:08:04] This combination of a very large and engaged audience put him on Spotify’s radar.

[00:08:11] If it could “own” Joe Rogan, then it could make the tens of millions of dollars that Joe Rogan made every year from advertising.

[00:08:19] But, much more importantly, if it could force Joe Rogan’s loyal audience to use Spotify, not any other podcast app, then it would be able to bring tens of millions of new users to the app. 

[00:08:35] These new users would hopefully start to listen to music on the app, probably on the free version, but like 40% of all Spotify users, they would get annoyed with the perpetual adverts and get pushed into the more profitable Premium subscription.

[00:08:53] So, after extended negotiations, reportedly with Joe Rogan initially unhappy with the offer from Spotify, on May 19th of 2020, Spotify announced that it had acquired the exclusive rights to stream The Joe Rogan Experience. The media reported the price tag as $100 million, but it’s now thought to be about double that.

[00:09:19] To commentators at the time, it seemed like a lot of money, even at the lower $100 million mark, but Spotify clearly thought that the bet would pay off, that they would make money from it. So, has it?

[00:09:35] Well, it certainly didn’t get off to a good start.

[00:09:39] A major part of Joe Rogan’s appeal was that he was a controversial character, and he was unafraid to have guests with controversial viewpoints on his show.

[00:09:51] With a 10-year history, it wasn’t hard for people to find Joe Rogan episodes from the back catalogue with controversial guests and controversial viewpoints.

[00:10:03] And when he moved to Spotify, Rogan vowed that the show wasn’t going to change. 

[00:10:09] It wasn’t going to become some clean, professional interview-style show like the tens of thousands of others that were out there because that wasn’t Joe Rogan, and that wasn’t what people wanted to listen to.

[00:10:23] People wanted the raw, messy, unedited interview. They wanted conversations that would go on for hours at a time, they wanted Joe Rogan to interview people that they would never see on TV.

[00:10:38] And Joe Rogan, as he promised, didn’t change. 

[00:10:42] He continued to be divisive, and this culminated in April of 2021 when he suggested that young, healthy people should not get the COVID-19 vaccine.

[00:10:55] To Joe Rogan fans and watchers, it was hardly surprising that he would take such a viewpoint

[00:11:02] His opinions towards traditional medicine have always been slightly sceptical, and Spotify knew this when it bought his show.

[00:11:12] The critics, however, said that this was reckless and dangerous by Spotify, and that it was spreading COVID misinformation via the Joe Rogan Experience podcast.

[00:11:24] Initially, Spotify put up its hands and said “hey, we’re just the streaming service, we don’t have editorial control over Joe Rogan”, but this didn’t cut the mustard, it wasn’t enough.

[00:11:38] A group of 270 scientists and healthcare professionals wrote an open letter to Spotify expressing their concern, and then in January of 2022 several high-profile musicians, including Neil Young and Joni Mitchell, started removing their music from Spotify.

[00:11:59] There were calls for Spotify to drop Joe Rogan altogether, calls that he was too controversial for an uncontroversial company like Spotify to continue to support.

[00:12:11] Spotify knew that its attractiveness as a service relies on having lots of music available on it. If people can’t listen to their favourite musicians on Spotify, well they’ll go somewhere else.

[00:12:25] It was, understandably, a worrying time, but like these things tend to do, the controversy fizzled out, and Neil Young and Joni Mitchell’s boycott of the company didn’t lead to a mass exodus by other artists.

[00:12:42] This controversy, however, did raise important questions about the line, the division, between publisher and platform.

[00:12:52] A publisher is something that actually publishes content and is responsible for it. 

[00:12:59] If an article is published in The Guardian newspaper, The Guardian has chosen to publish it, if the article is misleading or controversial or wrong, The Guardian takes responsibility for it, it doesn’t put up its hands and say “hey, we’re just a newspaper, you should blame the journalist who wrote it”.

[00:13:21] A platform on the other hand, is something like Twitter, YouTube or Facebook. Given the instant nature of posting something on those platforms, and the sheer amount of content that is uploaded every second, it is very hard for these companies to actually police, to monitor, what people are uploading, if you even believe that it should be policed, that is.

[00:13:46] Of course, this is a much more complicated subject than we have time for in this episode, but the point to underline is that the Spotify and Joe Rogan situation was a little different.

[00:13:58] For most podcasts on the Spotify app, Spotify can rightfully say that it doesn’t have any editorial control over what is said in the podcast, because, well, there are millions to choose from and Spotify simply provides a convenient way for people to listen to them.

[00:14:16] With Joe Rogan, Spotify not only had the exclusive rights to it, but it made money from it.

[00:14:23] Surely, the critics said, this meant that it had more responsibility?

[00:14:29] Spotify eventually decided to remove over 100 of Joe Rogan’s most controversial episodes from its service, but this again put it into the dangerous category of “publisher” rather than “platform”. 

[00:14:44] If it says it’s just a platform and not responsible for what Joe Rogan says, yet it pays him $200 million to have controversial guests and opinions and it has the right to remove episodes, can it really continue to claim to be a platform?

[00:15:02] It’s certainly an interesting debate, and one without a definitive answer.

[00:15:08] Something that does seem clearer, though, is that Spotify’s big bet into podcasting is showing early promise, it is looking encouraging.

[00:15:19] Spotify’s podcast advertising business generated €200 million in revenue in 2021, it was up 300% from the previous year.

[00:15:30] There are now 4 million podcasts available on Spotify, including this one of course, and Spotify users are increasingly listening to podcasts as well as music.

[00:15:41] And it’s doing exactly what it hoped in terms of encouraging users to turn Spotify into their go-to app for listening to anything audio.

[00:15:52] And although Spotify doesn’t currently put adverts between podcast episodes, analysts have suggested that this won’t be the case forever.

[00:16:02] Spotify knows that the main reason people upgrade to their Premium subscription is to get rid off these adverts, so when it feels confident that there are enough people listening to podcasts on Spotify, it can add advertising to push people towards upgrading their accounts, and that will be when the money starts to roll in, theoretically at least.

[00:16:26] And because it has the exclusive rights to shows like the Joe Rogan Experience, people can’t simply go to another podcast app, because they'll have to stay with Spotify to listen to their favourite show.

[00:16:39] What’s more, and this is one of the major reasons why podcasting is so attractive to Spotify, Spotify doesn’t pay podcasters when someone listens to the show.

[00:16:50] Unlike songs, where Spotify pays between 0.3 and 0.5 cents every time a song is played, Spotify pays nothing to podcasts, so it has considerably lower costs when someone listens to a podcast compared to when they listen to a song.

[00:17:08] So, where does this leave Spotify, where does this leave Joe Rogan, and where does it leave the podcast industry?

[00:17:16] For Spotify, it looks like a canny bet, a sensible decision. Spotify’s plan to become the go-to app for everything audio looks to be underway, and even though it hasn’t been complete plain sailing, it hasn't been completely easy, there have been some difficulties with Joe Rogan, there are encouraging results.

[00:17:40] For Joe Rogan, there are some critics that said he should have stayed independent, and that he was already earning tens of millions of dollars a year without having to be answerable to anyone, but he no doubt wasn’t too upset with a cheque for a couple of hundred million dollars.

[00:17:58] And for all of the other millions of podcasts out there, such as this one, what does the future hold, and how does Joe Rogan and Spotify change this? 

[00:18:09] Well, one of the great things about podcasts has historically been that they’re available anywhere. There are dozens of podcast apps, and every podcast is available everywhere, to anyone. 

[00:18:22] Not only does this mean that there isn’t one company that controls access to podcasts, but for podcast listeners it means that it’s very easy to change apps, and for podcast producers, they can focus on making a great show rather than pleasing an algorithm

[00:18:40] What Spotify is doing is…quite scary for lots of independent podcasts. 

[00:18:46] It could, in theory, make podcasts pay to ensure their new episodes are seen by their followers, in a similar way to Facebook.

[00:18:55] It could make podcasts pay every time an episode is listened to. 

[00:18:58] It could charge a monthly fee to podcasters. 

[00:19:02] It could add inappropriate adverts between episodes and collect 100% of the money from them, further squeezing independent podcasters.

[00:19:12] Talking about this show in particular, English Learning for Curious Minds, Spotify has brought an increasing number of listeners to it. 

[00:19:20] Perhaps you discovered it on Spotify, and in that case, great, I’m happy that Spotify decided to recommend it to you.

[00:19:29] But when any platform gets too powerful it can be bad news for independent businesses, so one can only hope that Spotify has the best interests of independent podcasters in mind.

[00:19:42] So, back to Joe Rogan, the highest-paid podcaster in the world, with a show Spotify wanted so much it was prepared to pay hundreds of millions of dollars to get its hands on it.

[00:19:54] If you haven’t listened to it, I’d definitely recommend checking it out. 

[00:19:58] Of course, you have to go to Spotify to get it, but there are almost 2,000 episodes to choose from. 

[00:20:05] They’re long, the language can be tricky to understand, it is full of controversial figures and viewpoints, but it is certainly entertaining.

[00:20:15] Give it a listen.

[00:20:16] It’s full of adverts, but it is free to listen to.

[00:20:20] If you do, just remember that you’ll be listening to the most expensive podcast in the world.

[00:20:28] OK then, that is it for today's episode on Joe Rogan & Spotify.

[00:20:34] I know it’s a bit of a different topic to our normal ones, but especially for those of you interested in the business side of podcasting, I hope you enjoyed it.

[00:20:44] As always, I would love to know what you thought of this episode. 

[00:20:47] Have you listened to the Joe Rogan podcast before?

[00:20:51] Do you like it? Can you see why it is so popular?

[00:20:54] What do you think Spotify’s responsibilities are as a publisher, or is it a platform?

[00:20:59] I would love to know, so let’s get this discussion started. 

[00:21:03] You can head right into our community forum, which is at community.leonardoenglish.com and get chatting away to other curious minds.

[00:21:11] You've been listening to English Learning for Curious Minds, by Leonardo English.

[00:21:16] I'm Alastair Budge, you stay safe, and I'll catch you in the next episode.

[END OF EPISODE]