The writer is the author of ‘Tarzan Economics’. He was previously chief economist of Spotify and PRS for Music
On January 24, Canadian rock musician Neil Young threatened to pull his recordings from Spotify because he believed the streaming company had given podcaster Joe Rogan a platform on which to spread misinformation about vaccines. On the same day, it amassed 1.2 million streams worldwide across all audio and video services, based on MRC Data.
Spotify’s market capitalization as of January 24 was $37 billion. A few days later, with the removal of Young’s songs, its daily stream count passed the 2 million mark, while Spotify’s market capitalization rebounded to $39 billion.
It’s wild. Neil Young is the 711th biggest artist in the United States and the 1,134th in the world, but by giving up 60% of his streaming income “in the name of truth”, all other streaming services have reinforced their love for “Heart of Gold” (and many other Young hits) by 300%. Six days after the deletion, Spotify’s earnings call saw its stock fall back to where it was at the time of the direct listing in April 2018.
Tellingly, Young’s original statement and acknowledgment did not actually name Rogan, referring only to Spotify’s “responsibility to mitigate the spread of misinformation”. The inference was that The Joe Rogan Experience may have influenced an audience “who [mostly] 24 years old” and “impressionable and easily tipped on the wrong side of the truth”.
The audience matters. Rogan’s hovers around 12 minutes per month, with around 60% under 35, while Young reaches 6 million listeners per month, of which almost 60% are over 35. Many under 35 don’t know who Young is, while many between 35 and 65 wouldn’t know he’s still around (and those over 65 might not know what Spotify is).
As the dust settles, a common misconception needs to be cleared up: Pulling songs from streaming services isn’t the same as pulling CDs from stores. The consumer is still spending £9.99 a month and the money just goes to different artists.
In addition, you must be able to afford such a move. Young could – he sold the rights to over 1,000 of his own songs to the Hipgnosis Songs Fund for $150 million last year, so deleting the recordings will cost his record label and publisher about $1.5 million in 2022. However, for investors in the Hipgnosis fund, including the Church of England, this may seem like a bait and switch.
The really thorny issue is content moderation. Sure, artificial intelligence is making inroads in moderating visual and textual content, but for podcasts, basic speech-to-text technology has limitations: the spoken word requires an appreciation of context and that involves Listen to every podcast from start to finish. It’s also going to get expensive, with two new podcasts being uploaded every minute. Software reviews have long been driven by the idea that there is no marginal cost, but content moderation might be their first.
Spotify finds out what happens when you exclusively offer podcasts. It’s the “Tarzan economy” in action: with many podcasters wanting to keep the old vine of the RSS feed in which podcasts are open and distributed everywhere, while Rogan represents the new vine of exclusives.
Spotify, which had never hosted his podcast before, acquired the show for $100 million and moved it to Libsyn’s back catalog in a bid to appropriate Rogan’s YouTube fan base. You bought it, you own it, you distribute it, then you take responsibility for it – case closed.
This raises a deeper question about what podcasts are supposed to be. Merging the word “iPod” with “broadcast” gets us nowhere. James Cridland, co-host of the Podland podcast, asks us to imagine a long tail that (in credibility) is heavy at the top but long and skinny at the bottom. Drawing on data from BuzzSprout, he suggests that just 1% of podcasts account for 95% of listening and advertising revenue – 90% of podcasts generate no revenue.
Spotify’s long tail spans 82 million songs and 3.8 million podcasts, making it difficult for any creator to stand out from the crowd. This brings us back to Young. It’s a sign of our times when, rather than engaging in debate and writing a new protest song on Spotify (“Keep on Podding in the Free World” perhaps?), the artist disengages and deletes his old songs instead.
Then again, maybe Young and Spotify had the final say. The former took in $150 million for songs that can’t be heard on the world’s biggest streaming service, bagged his own show on Sirius, and now dominates Apple Music and Apple Music landing pages. Amazon. Meanwhile, Spotify slapped a ‘Learn more about Covid’ banner next to Rogan’s podcasts, benefited from more marketing than money can buy, introduced streaming to an audience that never has heard of and will surely hit the milestone of half a billion monthly active users faster than a result.
Spotify has been here before, including with Taylor Swift in 2014, and it will be back. But the adage that “there is no such thing as bad publicity” still holds true. Every time we see lines like this unfold, Spotify grows faster. As apocryphal Hollywood agents tell their clients, “Don’t read your press, weigh it.”