![]() ![]() We want you to just do what you’re doing,’” Rogan said on his June 12, 2020, podcast.Ģ. “They literally said, ‘We don’t want to do anything. ![]() With Rogan, Spotify appears to be taking a hands-off approach. Spotify’s push into advertising has already given it original content through acquisitions of some major podcast publishers, such as The Ringer and Gimlet, and original podcasts with Michele Obama, Kim Kardashian and DC Comics. A company spokesperson confirmed with Billboard that Spotify neither made an investment or acquired the podcast (but declined to reveal the length of the contract). Spotify has licensed, not purchased, The Joe Rogan Experience. Keep three things in mind when thinking about the JRE licensing agreement:ġ. Rogan proves his worth if he can reduce churn and attract subscribers with relatively high ARPUs he will have a negligible effect on margins. ![]() And a higher ARPU means more revenue per subscriber - keeping churn rate and gross margin constant - and a lower break-even point. With better margins, Rogan has a lower break-even point because Spotify keeps more of the revenue it shares with rights holders. A lower churn rate reduces the break-even point because the average subscriber stays longer. The break-even point swings from side to side as variables change. ![]() And 25% is a fair gross margin percentage. It’s safe to assume churn has gone down since then - SiriusXM’s 1.8% monthly churn rate is a fair comparison if Rogan keeps his listeners loyal. As for churn, Spotify last revealed this key metric in its 2017 S-1 filing: 5.1% in the fourth quarter of 2017 and improving. ($9.99) and other English-speaking, high-ARPU markets such as the U.K. Spotify’s ARPU for all markets was about $4.80 in the first quarter - but that includes countries with prices lower than in the U.S. Michelle Obama to Host Podcast on Relationships for Spotify And although music may play a smaller part in these platforms’ successes, each new subscriber will pay into the growing pool of royalties owed to labels and publishers. As music subscription services use podcasts to morph into audio companies, some fraction of record labels’ and music publishers’ growth will depend on podcasts’ ability to lure and retain subscribers. Any new subscriber Rogan - or Michelle Obama, who announced her first Spotify podcast on Thursday, (July 16) - attracts will result in incremental royalties for music rights holders. The Rogan deal represents a non-threatening power shift for music companies. Spotify need not change its primary goals of getting more subscribers and reducing churn. (Of course, Spotify must accurately isolate Rogan’s effect on its already-strong growth.) This isn’t a move to generate more advertising (see below) this is - or should be - an effort to gain loyal customers. Joe Rogan Inks Exclusive Multiyear Podcast Deal With Spotifyīy Billboard’s rough estimate, the Rogan deal pays off if he - and he alone - attracts 1.2 million to 1.7 million subscribers with a low churn rate, high ARPU (average revenue per user) and average gross margin. But $100 million isn’t obscene for a fast-growing company that had about $7.4 billion of revenue last year and expects between $8.4 billion and $8.8 billion this year. But Spotify can use its global presence to help Rogan gain international fans.Īt first blush, nine figures seems like a ridiculous sum for a single podcast without ownership. Los Angeles-based Rogan already has an audience outside of the U.S. Record labels and music publishers benefit when podcasts help attract and retain subscribers.ģ. Spotify’s licensing deal with the Joe Rogan Experience podcast for a reported $100 million can pay for itself by attracting fewer than 2 million subscribers.Ģ. 1 on Stitcher’s list of top podcasts.) The streaming giant paid handsomely, a reported $100 million for a multi-year licensing agreement for a global exclusive.ġ. 2 on Chartable’s list of Apple podcasts in the U.S. Obviously, Spotify wants JRE, launched in December 2009, because it’s one of - if not the - most popular podcasts in the U.S. In the last month, iHeartRadio, through a deal with WarnerMedia, and SiriusXM, through its acquisition of podcast app Stitcher, have attempted to keep pace with the leader of the pack, Spotify.Īmidst a flurry of dealmaking for original content was Spotify’s exclusive deal with Joe Rogan’s widely popular podcast, The Joe Rogan Experience. Podcasting has become an arms race as major streaming and broadcast companies acquire companies and launch partnerships with celebrities for original programming. ![]()
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