Swedish Music streaming platform, Spotify recently made a huge move by signing Joe Rogan to an exclusive multi-year deal
Doubling as a veteran comedian and Podcast host, Joe Rogan broke the internet four days ago after he got signed by Spotify in an exclusive multi-year contract valued at approximately $100 million. Of course one would wonder what kind of deal could afford a person that magnitude of fortune; well the deal which came across a lot of mixed reactions across most social media platform is not a child’s play as it is considered as one that could bring about a shift in the industrial revolution.
According to the term of the deal, all Rogan’s podcasts and videos will now be solely streamed by Spotify who also requested a migration of all his contents from other platforms including YouTube, and iTunes. The migration of contents from other platforms, although it is expected to commence immediately, with Rogan’s most-popular podcast, ‘The Joe Rogan Experience’ go live on Spotify in September, most content will become exclusive to the platform much later in the year.
Joe Rogan has got as many videos as his several podcast, and one would easily wonder what then happens to the video contents considering that Spotify only streams music and not videos. Interestingly, the streaming platform is reportedly working on adding a feature that lets you stream videos as well; this is only possible because of the high value that Rogan brings to the table.
Talking about value, it is also worthy of note that the deal has greatly impacted the streaming platform only in the few days of signing the Superstar. Just after the deal was finalized, Spotify stock added a significant value up to 10% on Tuesday, at about $176.92. For the entire year, the stock is up by 15%. That way it easy to spot the reason why the company made such a massive move.
Also on the following day after the deal was initiated, that’s bare 48hrs after; Spotify’s stock value went up to $35 billion all the way from $30 billion.
For this many achievements only in a few days, one would then wonders what’s in stock for the next few years. Stating of which, the company, however, did not disclose other terms of the deal including the specific number of years, and value of the contract, although sources close to the event claimed it was worth $100 million.
While this is not exactly the first of its kind for Spotify, the company have had an unusual attraction for podcast for a while now; it has been buying podcasting production companies, spending more than $400 million in 2019 alone. although, most of those company shows are not exclusive in there ow case.
In its own case, Spotify sees podcasting service as an added benefit for listeners, and one that could lead to advertising revenue. In addition to paid subscriber/ options, Spotify has a free, ad-supported subscription option.
In a recent statement, the company revealed that it is “now seeing clear indications that podcast usage is driving increased overall engagement and retention.”, and that may have initiated Rogan’s deal in the first place.
“Our podcast users spend almost twice the time on the platform, and spend even more time listening to music,” CEO Daniel Ek said sometimes last year.
Now, in the music streaming industry, there is a likelihood that this kind of development might be the new trend moving forward, especially considering the success or perhaps good luck this particular deal has brought upon the company.
Given its new success, although this could turn out to be an eventual monopolization in the industry, the platform could as well reach out to more valuable content creators for similar deals. Consequently, this new trend is expected to change Spotify’s business model, at least to some extent.
The company do not own a majority of the contents it streams, and that plays a major role in its inability to make huge earnings in-spite of its dominant positioning in the industry; just so you know, the company pays out no fewer than 70% of its entire revenues to the companies that own the right to most of the contents available on its platform, however with more of this kind of its new development, there might be a possible change in the narrative moving forward.
Effect on other Streaming Platforms
There is no doubt that Spotify’s singular move will have a toll on other platforms. For instance Joe Rogan made a whopping $30 million in revenue stream from YouTube in 2019 alone, making him Forbes’s highest-paid podcast producer for the year. Rogan also earns a big chunk from streaming revenue on Netflix, not to mention Apple iTunes among others.
What this implies for other platforms is a major loss as all revenue streams will now be diverted to a singular source. Now here is the ice breaker; if Spotify should go ahead of other platforms to secure a more valuable deal as that of Joe Rogan, then that could greatly impact the industry, and of course in a not-so-good way.
In the coming weeks and probably months, there is a high possibility that we do be seeing more of this kind of development.