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Spotify holds firm over Rogan, for now

Quarterly season has come at an awkward time for streaming platform Spotify, with calls to censor the JRE podcast it hosts continuing.

The first question asked of Spotify in its earnings call concerned, not the weak outlook that seems to be the main reason behind a pre-market share price fall of 10%, but the fuss around the Joe Rogan Experience podcast, published exclusively on Spotify, and its tendency to feature guests who sometimes have controversial opinions.

Spotify CEO Daniel Ek attempted to pre-empt such questions with his pre-prepared spiel but to no avail. “Our first question today is going to come from Rich Greenfield on Joe Rogan,” says the Seeking Alpha transcript. “And the question is, you’ve clearly changed your public stance given artist pushback to his content. Is it a slippery slope in censoring content on the platform and have any advertisers left Spotify in protest?”

That change in public stance presumably refers to the concessions announced earlier this week, which included sticking information labels on Covid-related stuff, which seems to be what triggers geriatric musicians to shuffle off the platform in favour of blameless alternatives such as Apple and Amazon.

“I think the important part here is that we don’t change our policies based on one creator nor do we change it based on any media cycle or called form anyone else,” said Ek. “Our policies have been carefully written with the input from numbers of internal and external experts in this space. And I do believe they are right for our platform. And while Joe has a massive audience, he’s actually the #1 podcast in more than 90 markets. He also has to abide by those policies.”

The inference is that Rogan does currently abide by those policies, so that’s that. External pressure can have surprising effects, however, and it will be telling if Spotify suddenly starts tweaking those policies such that Rogan falls foul of them. It’s also worth noting that Rogan, who usually posts several new episodes per week, has been silent ever since this latest controversy started, bar the statement you can see in our previous story on the matter.

It’s probably not a coincidence that, while the likes of Neil Young claim to be specifically upset about non-establishment clinicians, the JRE episode of nine days ago featured the highly polarizing public intellectual Jordan Peterson in his first appearance on the show for years. Furthermore we know that soon after Rogan recorded a conversation with outspoken UK activist Maajid Nawaz, which was yet to be published at time of writing.

So it seems both Spotify and Rogan are having their resolve tested by this latest fuss and may have decided to keep their heads down until it blows over. We think that’s a mistake as that will at best delay the inevitable and could also be interpreted as a sign of weakness by their enemies. This issue isn’t going to go away so Spotify might as well get used to it.

The quarterly numbers themselves weren’t bad, with all key indicators headed in the right direction. It seems to have been the outlook for the next quarter that caused investor panic, however, which was as follows:

  • Total MAUs: 418 million
  • Total Premium Subscribers: 183 million
  • Total Revenue: €2.60 billion
  • Assumes approximately 360 bps tailwind to growth Y/Y due to movements in foreign exchange rates
  • Gross Margin: 25.0%
  • Operating Profit/Loss: €(67) million

In a company town hall meeting, which the LA Times caught wind of, Ek apparently indicated that he considers Spotify to be a platform rather than a publisher when it comes to Rogan, and thus not responsible for its censorship. This is an interesting attempt to create a clear dichotomy, especially in the context of US Section 230.

Should, for example, Spotify also be required to censor all musical acts streamed through its platform? By that standard it may well have been compelled to censor Neil Young himself, back when he was relevant, given his one-time anti-establishment stance. Ek reportedly also said he only sees new JRE episodes after they have been published but you have to wonder if that’s still the case.

As we’ve said before, the calls to censor Rogan are a product of his popularity. The internet publishes thousands of contentious items every day that somehow slip under the radar and those opposed to Rogan are often those most threatened by his popularity. It seems clear both he and Spotify have been spooked by this latest drama but they have a simple choice: stick to business as usual or throw in the towel. Any attempt at compromise in terms of censorship will just be a step towards making the latter inevitable.


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