Spotify Loses Money As CEO Tells Employees That It Doesn’t Regulate Joe Rogan Because “It’s A Platform”

Spotify reported their Q4 numbers and they lost money, which didn’t surprise Wall Street. Though they beat Wall Street estimates.

Spotify (SPOT) reported fourth quarter financial results on Wednesday that beat Wall Street expectations — although the stock plunged after the company gave weak guidance on monthly active users for Q1 2022. 

Here is how Spotify performed this quarter, compared to analyst expectations, according to Bloomberg consensus estimates:

  • Revenue: $3.025 billion (+24% Y/Y, +8% Q/Q) versus $2.98 billion expected 
  • Adjusted loss per share: -$0.23 versus -$0.44 expected 

Premium revenue came in at $2.58 billion — up over 22% — whereas ad-supported revenue came in at $443 million. 

And what isn’t going to help this situation is the fact that in after-hours trading after reporting these results, Spotify’s stock — which historically has been highly volatile — fell as much as 22%. As of 5:35 p.m. ET, shares were trading down 11%.

Oh but it gets worse.

The Los Angeles Times is reporting on a meeting that Spotify CEO Daniel Ek had with employees. Which of course was leaked to the times:

Spotify CEO Daniel Ek told employees Wednesday morning that the streaming service doesn’t closely supervise controversial podcast host Joe Rogan because the company sees itself as a platform to distribute Rogan’s show rather than as Rogan’s publisher, according to two employees who listened to the remarks.

Ek told employees at a livestreamed company town hall that “Spotify doesn’t approve Rogan’s guest list, they don’t look at his content until it goes up, and so they don’t have editing power,” recounted one employee, who requested anonymity because he was not authorized to speak to the media. “They just look at it after it’s already on the platform and remove it if it doesn’t meet guidelines.”

At the employee town hall, both Ek and chief content and advertising business officer Dawn Ostroff “repeatedly used the phrase ‘if we were a publisher,’ very strongly implying we are not a publisher, so we don’t have editorial responsibility” for Rogan’s show, said a second Spotify employee who listened to the remarks — and who, like some Spotify employees listening, found the executives’ position “a dubious assertion at best.” 

In a chat linked to the town hall livestream, “A large portion of the angry comments were about how Spotify’s exclusive with Rogan means it’s more than just a regular platform,” said one employee.

Now this is a similar argument that Facebook/Meta used when they got into trouble about what was on their “platform”. Because if they are a “platform” they have a certain amount of legal cover to work with. The thing is that really didn’t help Facebook/Meta then. And I don’t expect it to help Spotify now.

Another tidbit from that came out of today’s events is this:

Rogan’s is the No. 1 podcast in more than 90 markets, Ek told investors on an earnings call on Wednesday.

That explains why at least to this point Spotify is willing to let artists go from their platform. But I wonder if they will continue to take that view if they don’t make money. After all, they’re in business to make a buck and investors will get cranky if they don’t.

One Response to “Spotify Loses Money As CEO Tells Employees That It Doesn’t Regulate Joe Rogan Because “It’s A Platform””

  1. […] this ties into an article that I wrote a few days ago. But the thing that I find interesting is that even the CEO of Spotify has problems […]

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