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Despite all the changes Spotify has undergone over the past year, there is still more to come. Those three-year podcast deals the company struck are up for renewal, and what Spotify decides to do with them could have industry-wide repercussions. The Joe Rogan Experience – the first, the biggest and the most consequential – will expire in 2024. Today, after speaking with podcasters, producers, analysts, agents and executives (mostly in the background, although a few brave souls went on the record), I take a look at how the Spotify/Rogan relationship could develop.
Let me be clear: this is purely a thought exercise. I received no response from Rogan’s management and Spotify declined to comment on the negotiations. But what’s clear from my conversations is that, despite his problems, Rogan is seen as a vital part of Spotify’s podcast business. If he leaves or (less likely) if Spotify decides not to renew, it would be another blow to the company’s podcasting publishing operation. If they reach a deal, Spotify will be in a better position to rebuild, or at least maintain, its podcast division. If Rogan goes to another platform, he could essentially be a kingmaker. And if he decided to launch his own network, he would have no problem attracting listeners, advertisers and talent.
As you can see, there are a lot of ifs and buts! But that’s the fun.
Spotify really needs to find a way to make it work
The one thing everyone seems to agree on is that it’s in Spotify’s best interest to keep Rogan on board. After all the money the company has poured into deals that went nowhere (Harry and Meghan) and acquisitions that were ultimately dismantled (Gimlet), Rogan remains the best bet the company has ever made. He’s still the best podcaster in the world and it’s not even close.
With Rogan, Spotify gains a very large and loyal audience (although whether they have been able to convert those listeners into paying subscribers is a matter of debate). It’s also a big draw for advertisers, and its presence on Spotify is understood in the industry to have a halo effect for ad sales on its other shows. And despite all the uproar over his outrageous comments about vaccines, race and gender, he didn’t lose any shares and Spotify didn’t lose subscribers.
But, and this is a big but, it’s not 2020. Money is much tighter than it was several years ago: Investors are angry that Spotify’s podcast bet is still not profitable and CEO Daniel Ek is has committed to focusing on efficiency. Rogan’s current deal is reportedly worth as much as $200 million more than three (more or less) years. So the question is whether Spotify can find the right price to keep it happy and appease investors.
“It’s a situation where you’re damned if you do and you’re damned if you don’t,” says Richard Kramer, founder of Arete Research. “If you retain him, Spotify will be forced to pay Rogan as much or more than before, at a time when they need to contain costs. If you don’t retain it, then it’s really difficult because your biggest asset and source of sales within the advertising business is the walks.”
Also keep in mind that you won’t be negotiating with the same team as last time. Dawn Ostroff, former head of podcasting, is gone. So is Courtney Holt, who got the deal in the first place. Spotify’s new head of podcasting, Sahar Elhabashi, worked closely with Ostroff, but unlike Ostroff, she reports to chief business officer Alex Norstrom. Norstrom, who comes from the music side, is there to rein in crazy spending on podcasts and has been relentless in cutting back on it. Ultimately, it’s up to you how much Spotify will be willing to spend. If competition from other platforms drives the price through the roof, you may not have the tolerance for it.
Another thing that people I spoke to agreed on is that Rogan has the advantage in this situation. He has a lot of power right now. No one has managed to knock him off his pedestal in recent years, and it seems unlikely that anyone will in the near future.
Initially, Rogan gained widespread attention due to his ability to appeal across the ideological spectrum. I don’t think that’s so true anymore, given his controversial statements and his call for listeners to vote republican in 2022. (Although it seems like he may have found his weirdo regardless of his choice.) with RFK Jr.). But it does fill a void in the media landscape. According YouGovRogan’s listeners are overwhelmingly young men, many of whom say they reject political correctness, don’t trust mainstream media and love to exercise.
That is, you have a loyal audience that will follow you wherever you go and are unlikely to have loyalty to the Spotify brand. Rogan is the brand and if he wants to expand that brand to a network, he has the money and influence to do it. You can develop new programs, promote them on your own, and probably transfer at least part of your audience. And with another presidential election approaching, there may be no better time to do so.
There is also the question of exclusivity. Even as Spotify has loosened its grip on other shows, Rogan remains exclusive to the platform, minus the YouTube promotional clips. And while Spotify has become one of the biggest players in the market (largely thanks to Rogan), it’s still the podcast app of choice for just 17 percent of podcast listeners, according to a Cumulus study, and continues to lose share to YouTube. His reach will be greater if he becomes independent again, and he is a guy who likes to be everywhere.
If you’re not so interested in being independent, we could also see other platforms try to launch with more money than Spotify can afford. YouTube is finally giving podcasting a big push. It doesn’t have any major licensing deals yet, but that doesn’t mean it can’t do it. Amazon could sneak in with some crazy money and fewer restrictions, as it has with shows like my favorite murder and Intelligent. Hell, Elon Musk could make a play for Rogan as he tries to make Twitter/X a creator platform. The two even reunited yesterday for an episode that was specially licensed to X.
This may be too simple, but the money is good. Having a minimum guarantee during a period of turbulence is In fact nice. When that minimum guarantee is worth nine figures, it can be impossible to turn down, even for someone who already has more money than they know what to do with.
For all of Rogan’s maverick cachet, it’s easy to stick around: all you have to do is show up and talk. Spotify has also made it clear that they will not put limits on anything you have to say. If they can come up with the money to protect themselves from the competition and make it worthwhile, it will be a good deal.
Rogan also values loyalty, according to those who have dealt with him. After his controversies in 2022, he was offered $100 million to switch to conservative streamer Rumble. He rejected it, saying that “Spotify has stuck with me, inexplicably.” That could also be a cover for not wanting to go to a dumber platform or get sued, but there seems to be a grain of truth in that.
I went into this thinking that given all the options available to him, I couldn’t continue with the same exclusive deal. Who needs another $100 million or two when you can finance your own thing and still make a ton of cash? But Dan Granger, CEO of Oxford Road, pointed out something to me that made it seem surprisingly simple.
“Rush Limbaugh stayed at Premiere Networks. Howard Stern has stayed with Sirius XM. And you better believe they had plenty of opportunities to leave,” he said. “But the house figured out how to keep them.”
Part of that could mean Spotify deciding to drop Rogan’s exclusivity with a renewal. The company has withdrawn exclusivity for most of its other programs and may think there is more value (and certainly more advertising revenue) in allowing JRE distribute widely.
That model could be modified further. With Musk’s episode yesterday, the license meant that the first two hours were available on X, and the last 45 minutes were exclusive to Spotify. This is something that could easily be replicated on other platforms. It’s not the most elegant solution, but it keeps Rogan-heads engaged by coming back to Spotify.
If I had to bet money (not $200 million, but $50), I would say that Rogan and Spotify manage to reach a deal. It may not seem the same; in fact, it seems likely to be more flexible than the current structure of the agreement. But obstacles aside, it has been a remarkably successful relationship. Unless YouTube or Musk comes in with $500 million, I think it will remain untouched.
I hope you enjoyed this little experiment to predict the future. I’m sure some of this will embarrass me when the decision is finally made. (Be nice, future me!) Let me know what you think at ariel.shapiro@theverge.com
