A watershed agreement between Spotify and Joe Rogan could mark a major turning point for deal-making in the global podcast industry.
On Friday, Spotify announced a multi-year partnership agreement, which – instead of involving a more traditional platform exclusivity arrangement – will enable the Joe Rogan Experience show to be accessible on rival media platforms.
Here’s what is known about the deal.
- Spotify and Joe Rogan enter into a revenue sharing agreement for advertising sales on the Joe Rogan experience podcast.
- Spotify will ‘own’ advertising space on the podcast.
- Along with continuing to host the Joe Rogan Experience on Spotify, the Swedish company will seek to distribute the show on rival platforms to increase ad revenue.
- The deal is likely to see the Joe Rogan experience return to YouTube (owned by US-listed company, Alphabet) in the coming weeks. Amazon Music is understood to be another platform showing interest.
- Along with the revenue sharing agreement, Joe Rogan and his team will receive a guaranteed multi-million dollar annual payment from Spotify.
Spotify not keen to talk details
Various industry sources contacted by Podbam believe the $250 million price tag on the deal, first reported by the Wall Street Journal, is accurate. This is based on an annual guaranteed payment and uncapped ad revenue share.
However, Spotify is remaining coy, not only the price, but also the duration of the deal which makes accurately analyzing how much Rogan stands to earn difficult.
An industry insider told Podbam Spotify will keep key commercial details about the Rogan deal confidential in order to gain an advantage in critical negations with third-party media platforms in the coming weeks.
“If YouTube ad executives, for example, know Spotify has Rogan for ‘x’ amount of time and they paid him ‘x’ amount of dollars, this would help them immensely in preparing for negotiations with Spotify,” one industry executive told Podbam.
“Spotify would rather their competitors go into negotiations blind and hope the hype and excitement of Rogan, who is clearly the biggest podcaster in the world, gets them top dollar.”
In 2020 the Joe Rogan Experienced was pulled from rival podcast networks after Spotify secured exclusive rights.
The total value of 2020 deal was linked to Spotify audience targets, with Rogan believed to have pulled in just shy of $200 million over 3.5 years in upfront payments and audience bonuses.
The latest deal signals a key shift in the way agreements are being made between media companies and podcasters.
Instead of big upfront payments, platforms are opting for ad revenue sharing agreements with high potential pay-outs, and smaller payment guarantees.
For high-performing podcasts, revenue sharing agreements stand to be extremely lucrative. However, some warn podcasters could become over-exposed to the cyclicality of media spend, which can fluctuate greatly with the health of the global economy.
“Banking on it”
News of the deal has been welcomed by Spotify investors. The company’s share price has risen around 15 percent over the past month, and the gains were extended following Friday’s announcement.
Others have said Spotify’s deal with Rogan – currently the world’s most popular podcaster – is “worth every cent”
“Spotify believes Rogan and whatever controversies that may arise in the press from his guests is not going away and is profitable,” said American political commentator and podcaster, Tim Pool.
“They (Spotify) don’t think they are going to lose money on this deal and that’s good for everyone else because if Joe Rogan leads the way… it is much more likely that comedy and, you know, the so-called offensive kind of content will not be taken down moving forward because these platforms are banking on it.”
Of course it’s not just Joe Rogan himself who stands to pocket millions from the deal. Jamie Vernon, the highly-regarded producer of the Joe Rogan Experience, is the other key beneficiary of this latest windfall for the Joe Rogan empire.