The Impact Of Podcasting On The Music Industry
If you're on any form of social media, chances are you've heard about Spotify striking a licensing deal with the king of mainstream media, Joe Rogan. The multi-year agreement will remove Rogan's podcast, The Joe Rogan Experience, from all current platforms to be housed exclusively on Spotify. The deal exceeded $100 million, according to the Wall Street Journal, making it one of the largest single podcast deals the industry has ever seen.
So, what significance does this deal hold for the music industry? "Joe Rogan just got paid the equivalent value of over 26 billion streams for a podcast license," wrote Tom Gray, the director of the royalties, music copyright, and licensing society, PRS for Music. "A musician would need to generate 23 billion streams on Spotify to earn what they're paying Joe Rogan for his podcast rights." added music writer Ted Gioia. Gioia suggested this means "Spotify values Rogan more than any musician in the history of the world.”
How could Spotify, the world's largest music streaming service, essentially value podcasts over music? CEO of Spotify, Daniel Ek, believes podcasts can help the platform "shift [our] cost base from variable to fixed." In simple terms, when users stream podcasts on Spotify, they do not have to pay out royalties; when users stream music on Spotify, they do. The more Spotify gets consumers' to listen to non-royalty bearing media (i.e., podcasts), the more their margins will improve and, therefore, the higher the company's profitability.
What happens to major record labels and artists when the leading music streaming platform prioritizes providing podcast content to encourage consumers' to listen to less music? On the other hand, could podcasts be the new promotional tool independent artists need to catapult them past the barriers associated with playlists, radio, and traditional media?
Tom Mullen, VP of Marketing Catalogue for Atlantic Records in New York, explains, "My job title is based on marketing and I've only seen podcasting at this stage of our lifecycle to be a promotional tool and a vehicle to tell our stories." He continues, "The podcast listener is engaged and attentive – and for sometimes 30-45 minutes! We've seen 60% completion rate for our episodes and that's a huge metric. If we have a fan's attention for that long about one artist or a specific topic, that means we're doing something right with our programming, we have the right editing done and the artist's story is connecting."
Podcasts allow artists to promote their music by compelling storytelling that defines who they are and what they stand for. It gives artists a chance to talk directly to loyal fans and cut through the noise of an oversaturated music-streaming landscape. Could the hybrid podcast-music approach eventually become the new hot marketing tactic in the music world? Could more in-depth, more intimate, and behind-the-scenes content leading up to an album release replace the current marketing strategies prominent in the music world today, such as TikTok campaigns that are made with the intent to maximize virality?
Whether you see Spotify's podcast acquisitions, a potential threat to the music business, or as an opportunity to restructure the music industry to be directed towards the benefit of the artist will depend on whether you're a major record label or an independent artist.