The IT Nerd

In a stunning admission, the CEO of Spotify Daniel Ek had this to say in a Spotify town hall as reported by The Verge:

“A publisher has editorial control over a creator’s content — they can take action on the content before it’s even published,” he says, like editing episodes, removing guests, or preventing one from publishing at all. Ek noted that Spotify does have editorial control over the properties it owns outright, like The Ringer and Gimlet, but emphasized the distinction between those studios and Rogan. “Even though JRE is an exclusive, it is licensed content. It is important to note that we do not have creative control over Joe Rogan’s content. We don’t approve his guests in advance, and just like any other creator, we get his content when he publishes, and then we review it, and if it violates our policies, we take the appropriate enforcement actions.”

Notably, Ek did not defend Rogan’s views. “There are many things that Joe Rogan says that I strongly disagree with and find very offensive,” he said.

He adds that there are a “number” of JRE episodes Spotify has removed because they violate the platform’s rules. (It’s unclear what episodes Ek is referencing, but fans noticed some missing when Rogan made the move to the platform in September 2020, and Rogan acknowledged their removal last March.) 

So 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 with Rogan. Yet the service that he runs still hosts his content. Thus showing that this is all about the Benjamins for him. Or put another way, Spotify paid Rogan something around $100 million in hopes that he would help Spotify turn a profit on a consistent basis. So Ek is going to ride that horse as long as he can do so because he really has no plan B. I also find it interesting that when Rogan made the move to Spotify, some of his episodes disappeared. Thus it’s clear that Spotify knew what they were getting when they signed Rogan. And this is clearly unsettling to Spotify employees:

For some employees, though, Ek and the team’s sentiments rang hollow. Throughout the town hall, they messaged internally, according to screenshots viewed by The Verge, expressing disappointment with the choice Spotify made in not only signing Rogan but also in defending him. They questioned how the company considers itself a platform while still actively promoting JRE and including its logo on the cover art and how what some consider an ethical issue is being put in pure business terms.

I take that to mean that Ek’s problems are multifaceted. As in he has to deal with external forces as well as his own employees protesting about Joe Rogan. That’s not a good place to be if you’re Ek. And it’s also a sure sign that you might be on the wrong side of this, and that you should be reconsidering your choices when it comes to this.

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.