The announcement by Joe Rogan himself:
Joe Rogan has signed an exclusive licensing deal with Spotify. So his podcast the Joe Rogan Experience (JRE) will be available on Spotify starting September 1st, 2020. At first the JRE will also be on all other podcast platforms. At the end of 2020 the full audio and video episodes of the JRE will be available exclusively on Spotify. Only highlight clips will continue to be uploaded to Youtube. Joe and his team will continue to have full creative freedom over the podcast. In a chat with my brother right after the announcement I estimated the purchase to be worth something in the neighborhood of $80-110 million. The Wall Street Journal wrote it might be more than $100 million.
Why that is a big deal:
JRE is one of the most downloaded podcasts in the world. In 2019 it was downloaded ca. 190 million times a month. For comparison: The most prominent German radio station averages 698.000 listeners per day. I am aware that I compare total monthly downloads of a podcast to number of average daily listeners of a radio station but it still gives you an idea of the dimensions we’re talking here.
In a matter of 23 minutes after the announcement the Spotify stock went up by 6 %.
So, that is
- a huge deal for Joe Rogan
- a big win for Spotify
- a big loss for Youtube
- a challenge for Apple
… and an important insight into what’s on the horizon for the podcast space. Here are some predictions:
1. Spotify is on the offense
Spotify will continue it’s aggressive acquisition of exclusive audio content. Spotify’s strategy is still focused providing high quality audio content that is exclusive to their platform. The most famous German podcast, “fest & flauschig”, is a Spotify exclusive since a few years. Now the most famous English speaking interview podcast of the world, the Joe Rogan Experience, is also a Spotify exclusive. Spotify employees transcribe each episode offest & flauschig, so that team Spotify can analyze what makes it so successful in Germany. They want to know the success formula of fest & flauschig, so they can replicate it in other countries.
Part of Spotify’s strategy is also acquiring the technology and man power behind podcast creation. That’s why they acquired audio startups Gimlet Media, Anchor and Parcast in recent years and signed another exclusive multi-year podcast deal with the Obama’s media company Higher Ground Production.
I see Spotify in the future as a super mighty music and podcast hub that has all factors it needs to move into the new age of media alongside competitor Apple. Spotify’s podcast segment will indeed be the Netflix of podcasts.
2. How will Spotify look like as audio + video content hub?
Spotify, once an audio-only platform, already did a test run of video podcasts with famous Youtubers Zane and Heath: Unfiltered. The company also built a big production studio in Los Angeles for video and audio formats. What will be new on the Spotify app with JRE coming to the platform? 1. long videos and 2. podcast videos.
So, how will that look like? With comment section? With likes/dislikes or up-/down votes? Or will those podcast videos be non-engaging, meaning no comments, no likes etc.? I doubt it. Spotify knows how important engagement with the platform is.
There’s a huge community on the JRE Youtube channels that discusses videos in the comment section. Will that Youtube fan base diminish once there are no full episodes of JRE on Youtube anymore? I don’t think 100% of it will transfer to Spotify but a big part of it will an on Spotify new listeners will find the JRE.
What is important for video streaming on Spotify is that you have to switch easily from video to audio and reverse. If I stream a podcast video and lock my phone, then the audio stream should continue right away.
3. Spotify as new source of income for podcasters
Spotify is about to implement a podcast ad revenue technology called Streaming Ad Insertion (SAI). So far ads were bought by sponsors based on CPM, which is the cost per 1000 downloads. Podcast producers either reached out to sponsors or the other way around. Spotify wants to automate a lot of the organization and planning of podcast ads with their SAI technology.
Podcasters then don’t have to worry about acquiring and planning ads for their podcasts because Spotify does it all for them. Much like Youtube creators make money by enabling Youtube ads on their videos.
4. Is Spotify bad for open podcasting?
Yes, it is. Is that a bad thing? Yes and no.
Yes, because freedom of choice in selecting what podcast to listen to gets diminished.
And no, because Spotify will put a lot of money in high quality original podcast formats. And that is exactly what the podcast world needs: We don’t need more interview podcasts but well written podcasts with good production and fresh ideas.
A look ahead
So 2019/20 marks the end of the 1st period of podcasting, which was steady growth for a lot of players on a lot of platforms. Now we enter the 2nd period. Now big corporations enter the podcast space, the market will be consolidated (= big companies buy startups and scale-ups, maybe mergers) and a few big companies will compete with each other in the podcast wars. Much like Netflix is competing with Disney+, Amazon Prime, Apple TV+, Hulu and HBO Go. So, who will be the big players of the podcast wars? Definitely Spotify and Apple. Who else? Maybe Luminary, maybe Stitcher, definitely new ambitious startup players, too.
We will also watch Spotify on our TV screens. A lot of people, especially young people, are streaming Youtube on their TV screen. They watch 2-3 hours of Joe Rogan interviewing actors, comedians, musicians or whoever else. So, I think Spotify will pivot with their app making it half audio mobile-first/half video-streaming app for laptops, computers and TVs. That means even more competition for traditional TV.
Do you like podcasts? If so, please consider checking out my podcast The.Connecting.Dots.Podcast on your favorite podcast player: