Some of my thoughts on media & entertainment business … if you were forwarded this email and want to receive regular updates, click here:
The Fear Factor Dude Has Come A Long Way
Last year, Spotify announced a monster $100 million deal with Joe Rogan that would make the Joe Rogan Experience podcast exclusively available on Spotify. Beyond the price tag, it was big news considering Rogan built a global cult following by distributing his “vodcasts” on YouTube. Fans who live in countries where Spotify isn’t available are now SOL.
So how has exclusivity affected the Joe Rogan Experience? Spotify does not share specific metrics on podcasts like subs reached or seconds listened. But a recent report from The Verge came out with its own conclusion: JOE ROGAN, CONFINED TO SPOTIFY, IS LOSING INFLUENCE.
The report measured influence by quantifying how much of a “promotional boost” the podcast gives its guests. For example, the report looked at how many new Twitter followers guests received after appearing on the show. As summarized in the chart below, prior to the Spotify deal, guests added ~4,000 Twitter followers after appearing on the podcast. Post-deal, that number is ~2,000.
Interesting, but who gives a sh*t? I don’t think anyone is surprised by the conclusion; of course Rogan would lose influence by going exclusive on one platform. The Verge’s analysis did a great job at finding proxy data and applying a consultant framework but let’s take a step back; do you think Rogan or Spotify lost sleep over the report?
C.R.E.A.M: I bet Walter’s life savings that Joe Rogan and his team baked in a “loss of influence” premium in the deal price. Even if they’re seeing a bigger loss of influence than expected, I can think of 100 million reasons why Joe wouldn’t be that phased.
CAC CAC CAC: Spotify probably cares even less. Spotify signs exclusive deals not as a profitable content play, but for aggressive customer acquisition. Spotify wants to bring over a % of Rogan’s fanbase as net new subs to the Spotify platform. Spotify monetizes these subs via ad sales and then expects a % of this new sub base to eventually convert to paid membership (cha-ching). Furthermore, this base of new subs are likely to listen to then use Spotify for all their podcast (and music) engagement, thus boosting stream counts across the platform.
Maybe after a couple more years of data, talent like Rogan will realize that exclusivity isn’t worth the premium valuations Spotify is throwing around. But until that data is material, expect Spotify to cut fat checks for more exclusives like Armchair Expert and Call Her Daddy.
One last thing…as we are seeing in Hollywood with talent contracts, I expect (and want) to see more creative deal structures for “exclusive podcasts.” Instead of Spotify dumping its balance sheet for 100% exclusivity, maybe there is an agreement where one episode of the Joe Rogan Experience / month is released on YouTube. Or maybe the first 25 min of each episode is available on YouTube and there’s a link for listeners to “watch the rest on Spotify.” This is a brand new world of creator vs distributor vs customer and value is being shifted all the time.
Other Highlights
Netflix
Netflix launched mobile gaming pilot in Poland. Android users in Poland can download two Stranger Things themed games and play them on the Netflix mobile app. Any Polish readers out there with some thoughts?
Vice Media
Vice has abandoned its SPAC plan and raised $85 million from investors including Lupa Systems, TPC and TCV. Co-founder, Shane Smith, let go of his voting control in the new deal
M&A
Forbes Media merging with Magnum Opus Acquisition SPAC in $630 million deal
Axel Springer to acquire Politico for ~$1 billion. Axel Springer gobbled up Business Insider for $500 million in 2015 and took a majority stake in Morning Brew late 2020. Time will tell what any returns will look like for the German Media Co given these fat valuations
🎼 Apple Music acquired Primephonic, a classical music streaming service, and plans to launch a separate app for classical music next year
Venture Deals
Memmo.me, a Stockholm-based Cameo competitor, raised $12 million led by Left Lane Capital
Walt’s Thoughts 🦧🍻
UGA 34 - Clemson 24
“Go Dawgs” - Leo, probably
“What I’m Streaming…
Yes, I know it’s a trailer. I’m just hyped. Thank you Broccoli for a final October 8 theatrical release date