With all the talk of Joe Rogan and Spotify lately, I thought it may be interesting to look into the numbers and see how much Spotify really needs Rogan.
It’s quite easy to say without much study that Rogan doesn’t really need Spotify. He was happy to take their offer of $100 million, but his fame and reach is so large now, he could easily stream from his own website and make tens of millions of dollars a year, maybe even more.
But the opposite is not true if we dig into the Spotify numbers a little bit.
Spotify has been notoriously unprofitable for years. That’s why they brought in Rogan in the first place. They make very little money from music streaming, in fact they lose money on it and have for years. So they saw podcasting as a path to profitability for them
So far that seems to be working, although for a paltry amount. Spotify finally turned a profit late last year, although it was only $2.3 million on nearly $3 billion in total revenue. Not a great number, but some analysts did see it as at least a starting point.
Looking further though, that profit was only made possible due to increases in advertising via podcasting. Podcasting allows for more ads to be served and the ads to be better targeted, resulting in higher prices being charged for those ads.
So for Spotify, podcasting is their only path to profitability at the moment, and they have the biggest podcaster in the world.
So ask yourself, would a company that has no other way to be profitable suddenly dump their number one podcaster, and ruin their podcasting business model which seems to finally be working?
The answer is most likely no unless as a company, they want to self destruct. If they ditch Rogan and become hostile towards podcasters, they have no other path to turn a profit.
It’s quite likely if they banned Rogan, other podcasters would avoid the platform out of protest. Which would make the banning of Rogan even worse for Spotify.
So don’t expect Spotify to ditch Rogan any time soon. Although on this site we’ve speculated it would probably be a good thing from a free speech perspective. But from a business perspective, I don’t imagine Spotify is even considering it.
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