I hope the reported numbers are low, because I don’t think even $100 million per year provides Rogan with enough upside to accommodate the trade offs:
- Losing his relationship with his subscribers
- Building someone else’s business and recurring revenue instead of his own
- A smaller audience and less impact
He’s going to be just fine either way. I’m not shedding any tears for Joe, but as a business person I can’t help but shake my head at the lost potential.
The world’s largest podcasters are sitting on oil. There’s a reason Spotify is writing these seemingly insane checks: They’ve done the geological surveys. They're trying to cut deals with as many hapless farmers as they can before they all catch on. Spotify will spend hundreds of millions to reap billions.
Most people will look at Rogan and think he’s a genius living the dream.
I think he’s a farmer who just got taken by Daniel Ek.
Andrew Wilkinson
Interesting perspective on Joe Rogan’s exclusive deal with Spotify that surfaced in my Twitter feed after a new report estimated the value of the deal at over $200 million. It was somewhat amusing to see the renewed outrage without substance, which felt more like repressed envy than anything else. You can certainly make a case that he’s saying questionable things on his podcast, but Rogan’s remuneration depends on his negotiation with Spotify and how much the company estimates it can get in return, not on the perception of some small slice of the public. That other newspapers reported a smaller amount last year is rather a journalism problem of not properly vetting their information.
It helps to put the numbers in perspective as well. Over the past year, Rogan released some 165 episodes, almost one every two days. Let’s say he’s getting $100 million a year from the exclusive; that would translate to a per-episode cost for Spotify of around $600,000. In contrast, Prince Harry and Meghan Markle have produced a single episode following a $25 million deal – 40 times more than Rogan on a per-episode basis; Michelle and Barack Obama have released a total of 18 episodes in their three-year deal (apparently in the $10 million to $20 million range). You can argue all you want about ‘quality vs. quantity’, but you can’t build a successful content business with shows running for a handful of episodes because you end up in a situation where people subscribe to listen to these episodes and then cancel – as it regularly happened whenever HBO released new seasons of Game of Thrones.
As for my perpetual annoyance at people accusing Spotify of not paying artists enough, at least some executives in the music business are trying to set the record straight:
So, it pains me when I see artists and those who love them misdiagnose the source of their difficulty. Spotify is the current scapegoat for the ills of the working-class artist, despite them paying 63% of gross revenues back out to rights holders. This is in relative parity to other DSPs and slightly higher than brick and mortar retail (60%), which is understandable given that they must pay for physical space to conduct business.
A note about rates: Spotify is pilloried for the fact that they pay a lower net rate than Apple or Tidal. The reason for this lower rate is that Spotify offers something that the others don’t – an ad-supported tier that pays at a lower rate because advertising does not bring in the amount of money subscriptions do. You can choose to feel aggrieved about the lower aggregate rate (which many do), or you can choose to be happy that people that can’t afford to pay $10 a month are given a way to participate in a way that allows for some royalties to be earned (which is how I feel). People can disagree in good faith about which approach is preferable, but it’s simply not the case that Spotify is just paying less to pad their bottom line. They bring in less revenue per listener but still pay out a commensurate percentage to the other DSPs.
David Macias
A painful question must be asked at this point: Is it an artist’s right to earn a living from their art in a capitalist market? In a country where the business-failure rate is 65 percent over ten years, should artists be immune from their businesses failing? As much as my heart goes out to anyone who is not able to make their dream come true, I would say that that answer is no.
Vilification is easy. I’ve heard that it’s not the people, it’s the system that is broken. To that, I counter that any system that has increased parity and overall revenues is not a broken system. There is just way, way, way more music available, and though the pie is growing, it’s unable to feed everyone. Artists need to understand the reality of the situation and be clear-eyed about what battles they need to be fighting. My contention is that dismantling the existing system without a replacement will harm independent artists.
David Macias
Post a Comment