Joe Rogan's blockbuster deal with Spotify is the streaming giant's biggest signal that it wants to dominate podcasting. Here's what it means for other show personalities and advertisers.

Joe Rogan

  • Spotify has acquired Joe Rogan’s popular podcast and will
    exclusively host his content and sell ads.
  • Podcasting execs and ad agencies see the deal as Spotify’s
    biggest bet on podcasting and say it could set a precedent for how
    other platforms court big stars.
  • Some worried that the move signals the end of independent
    podcasters and could pose problems for advertisers that like to buy
    podcast ads simultaneously across many shows.
  • Click here for more BI Prime stories.


Spotify’s deal with comedian and media host Joe Rogan

solidifies its dominance in podcasting and shows how quickly the

small but growing industry
is being locked up by big media
companies.

The top podcaster is taking his show to Spotify in a licensing
deal that
The Wall Street Journal pegged
at more than $100 million.

The tie-up is the latest example of how Spotify is willing to
pay for big acquisitions to move further into podcasting. The
streaming giant acquired Gimlet Media and Anchor for $340 million
last year and purchased Bill Simmons’ sports media property The
Ringer
for $200 million earlier this year.

“In the broader entertainment space, big bold personalities are
a way of legitimizing the platform,” said Alain Sylvain, founder
and CEO of Sylvain Labs, a brand consultancy, which has Spotify as
a client. “Think of Howard Stern and XM radio. Or Jay-Z and Tidal
— no one thought about it until he put his catalogue there.”

Spotify is aggressively trying to steal podcasting share from
market leader Apple, said Danny Weisman, media director at ad
agency Noble People. Apple consumes 60% of the podcast market while
Spotify makes up 10%.

Spotify has ‘an ambition to scale podcast advertising’

Podcast advertising is a small but growing industry. According
to eMarketer, the podcasting advertising market will hit $1 billion
in 2021, up from $479 million in 2018.

The Rogan deal offers Spotify a chance to boost its
non-subscription revenue. The company is well known for charging
higher ad rates than other platforms, Weisman said.

“Spotify’s business is predicated on streaming music, and it’s
not as lucrative as if they own the content itself,” he said. “They
have an ambition to scale podcast advertising.”

Spotify will make Rogan’s podcast free for listeners and sell
mid-roll ads in shows as well as work with podcast sales firm PMM
that has long handled Rogan’s advertising deals.

Up until now, Spotify’s pitch has split its podcast advertising
into two products, said Stephen Smyk, SVP of podcast and influencer
marketing at ad agency Veritone One. One format sells sponsorships
and ads inside all of a show’s downloads, including downloads
outside of Spotify. The other is an ad-insertion tool that
advertisers use to target people listening within Spotify. With
Rogan’s show moving exclusively to Spotify, Spotify will be able to
sell a larger chunk of ads.

One of the bigger challenges for Spotify’s advertising ambitions
is to maintain the high-quality, native ads that hosts read during
programs. The promise of programmatic audio advertising is that it
helps advertisers scale ads across programs but some marketers
worry that will water down their messages.

“Podcasts require its own ad model — it can’t be sold on
demographics or scale,” said Judy Shapiro, CEO and founder of
engageSimply, an adtech firm that works with media companies to
package content based on topics that advertisers buy
programmatically. “If you go down the CPM road, it will devalue
what is an emerging, exciting ecosystem.”

The deal offers Spotify an opportunity to drive subscriptions and
ramp up in video

Beyond advertising, bringing Rogan to its platform also gives
Spotify a big new audience to market its subscriptions to, and it
could lure more creators with similar deals.

And if Spotify’s past moves are a guide, it could make new Rogan
content that’s subscriber-only. Noble People’s Weisman speculated
that Spotify will eventually put his show behind its
subscription-based program Spotify Premium, which costs $9.99 a
month.

“They paid a lot, but it gives Spotify more listening and top of
funnel because you bring in more listeners and they may become
paying subscribers,” said Erik Diehn, CEO of podcast company
Stitcher.

Meanwhile, Spotify has tried its hand at video advertising
several times in recent years, but those efforts have not stuck.
Noble People’s Weisman said that Rogan’s 8.5 million YouTube
subscribers could help Spotify ramp up its move into video.

YouTube is fundamentally a video company, but there’s been a
rise of creators like Rogan that straddle audio and video.
Podcasters increasingly tell Stitcher they want more flexibility in
ad formats, such as the ability to sell host-read on YouTube as
they do on podcasting platforms, Diehn said.

The deal worries podcast purists

Of course, there are a lot of big ifs to this deal: Will it
bring in the volume of listeners and subscribers Spotify hopes?
Will Rogan court controversy that Spotify comes to regret? Will
Spotify censor his provocative show?

Then there are the questions for other podcasters. Will it get
harder to stand out?

For now, the deal has caused some handwringing among podcast
purists who prefer wide availability of shows that defined the
early days of podcasting and while messy, helped grow
listenership.

“There’s something about the open, accessible nature that’s
fueled its growth so far,” Diehn. “There have been so many ways to
find podcasts, which made it a hindrance early on. Deals like this
signal an end to that. Increasingly we’re going to have a world
where podcasts are partitioned because the podcasts available on
each service are going to start to narrow.”

SEE ALSO: Meet
the 29 power players of podcasting who are pushing original audio
production forward as the industry surges toward $1 billion in ad
revenue


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Source: FS – All – Entertainment – News
Joe Rogan's blockbuster deal with Spotify is the streaming
giant's biggest signal that it wants to dominate podcasting. Here's
what it means for other show personalities and advertisers.