Joe Rogan, the world’s no 1 podcaster as per NY times has made his podcast show Spotify exclusive. Reportedly, Joe Rogan was paid an estimated $100 Million. For a multi-year contract to move the entire Joe Rogan experience to Spotify.
This might be one of the most important deals in the history of podcasting. I might be over-exaggerating it, but believe me, it is one of the biggest deals of 2020. The deal might change the way people consume data and might open doors to a new form of data consumption stream.
Spotify is not the name that comes to your mind when you hear the word podcast. But with this deal, Spotify has something different in mind. They are aiming to become the biggest name in audio. Like they want to become the YouTube of audio. Or they are trying to compete with YouTube?
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Let’s talk about Joe Rogan and the Spotify deal
Joe Rogan is a former host of “The Fear Factor,” an MMA commentator. He loves cool cars, shooting guns, and working out. And most famous of all, he is the host of a raw Podcast style interview show “The Joe Rogan Experience”. Which features comedians, athletes, and intellectuals.
The Joe Rogan experience was earlier available on Youtube and Apple Podcast. The Show has 2 youtube channels PowerfulJRE and JREclips. With a combined subscriber count of more than 13 million from both channels.
You might have seen this famous meme of Elon Musk smoking. It is from the Joe Rogan show. The famous names who have been part of the Joe Rogan show are Neil deGrasse Tyson, Kevin Hart, Naval Ravikant etc.
Well, you may ask how influential Joe Rogan is. Here’s a tweet by Senator Bernie Sanders posted to show Joe Rogan’s support for him.
According to the reports Joe Rogan earned around $30 million in FY 2019. And the market estimates Joe Rogan would earn himself $100 million from this Spotify deal. Well, the amount is not confirmed, many say the amount may be more than that. When the world’s number 1 podcaster moves from one platform to another it’s a big deal. And this deal had a lot of effects on different players.
Spotify Joe Rogan Deal effect
The Spotify’s exclusive rights to “The Joe Rogan Experience,” has sent the company’s stock soaring. It added $1.7 billion to its market cap in 23 minutes. And in 48 hours the Spotify valuation increased by 5 Billion dollars.
That means 5 Billion is the actual value of Joe to Spotify. The biggest effect of this deal is that it has brought some relief to the investors. Because, to date, Spotify has not made any profit. And the investors see this as a positive change. And with the move to a new platform, Joe Rogan will also bring in Millions of his followers to Spotify.
The company says that many of its users search for the Joe Rogan show. They say it’s the most searched term on the app. This move will definitely help get more user time on the app.
Since people like to listen to 2-3 hours of the show, which is evident from the number of views on his Youtube Videos. This means Joe has a good retention rate of viewers on his long-form content.
But why is this deal a big deal? It’s not the deal but the shift of users to a new form of content consumption which is a big deal.
Till now videos where the biggest source of bandwidth eaters on the internet. But now Audio might also eat a sizable piece of this pie.
The podcasting industry is still a newborn baby and has very few creators on it. Here are some of the stats to back it up.
The Podcast Stats 2020.
- Currently, there are around 31 million youtube creators compared to only 900k podcasters. The podcast is the part of the audio industry which is the most underrated one. Journalism is one thing that podcasters are competing with.
- According to stats, most of the podcast listeners are intellectuals and are people who come in higher income brackets. Here are some interesting facts about podcasts.
- In the Year 2020 Podcast is estimated to bring $659 million in Ad revenue. Podcast Ad Revenue Growth has been over 1,000% in the last 5 Years
- 80% of the users use the smartphone to listen to the podcast. And 22% of the users listen to podcasts while driving.
- The podcast is one of the most gender-neutral media, with 48% female and 52% male users.
- There are more than 850000 podcasts, with around 30 Million episodes and 100 languages.
- Comedy, Business, and News are top content types when it comes to podcasts niches.
- But of all the facts the most interesting fact is, 80% of the users listen to the complete show. If you are familiar with youtube, you know this is the retention rate that content creators dream off.
The Rise of Spotify
Spotify which was till now considered a music app, where you can listen to music at a very cheap rate or for free. But this model has not made any money for the app. And more than money, the creators have revolted about the low payouts by Spotify to the Creators.
To put things into perspective, musician and critic Ted pointed out on Twitter. That “a musician would need to generate 23 billion streams on Spotify to earn what they’re paying Joe Rogan for his podcast rights.”
Spotify knows that it can’t walk this path for long. Sooner or later the artists will leave the platform if they are not paid enough. So to prevent this from happening and continue to have content on its platform. They are changing their model from music only company to an audio company. And the first thing that they are focusing right now, is Podcasts.
Spotify’s ambitions about expanding into other audio domains were already known. Last year the company spent around $400 million and bought 3 key Audio companies. These were some great strategic acquisitions. It bought two podcast networks, — Gimlet Media (known for Reply All) and Parcast (a true-crime and mystery network). plus a company called Anchor that offers easy-to-use podcast creation tools.
Spotify knows that it needs content which will help them to generate revenue. So by investing in these podcasting companies it’s making its stand clear. They want to become an audio powerhouse.
Future of Spotify and podcasting
Now, this is an interesting part. I was thinking, what will the future look like, either this will be the next big move or the biggest blunder. It would be Spotify Vs everyone else. Who would be everyone else? Apple Podcasts, Google Podcasts, and others. But then I came across this piece of article. Spotify is testing video podcasts with two YouTube stars. It will not only be about audio.
Spotify might become the next content platform. The company is not looking at Apple and other music apps as competitors. But their real goal might be to take on youtube and grab a piece of that pie.
Youtube is already facing a lot of heat from its creators. With complains that the company controls the freedom of expression on its platform. And monetization issues, about youtube favoring more profitable niches like gaming and tech.
This might be an opportunity for these creators to look for a different platform. And if Spotify provides the right dish, then it might see new content creators on the platform.
Journalism is one thing that podcasters are competing with. The next time you might not be looking for the blog post about certain news or incident. On your ride to work, you might listen to it on one of the journalist’s podcasts.
Spotify might also try to shift its focus on India. With a million youth population and a growing podcast market. It might use it to grow the user base and might try to monetize the content here.
Audio is an untapped industry where currently there are only some big players. This might be the start of a new type of content trend. And if you are smart enough you should take advantage of his trend.