How we got here:
- Spotify signed Rogan to an exclusive contract worth $100 million at the dawn of the pandemic to facilitate Spotify’s growth as a destination for podcast listening—but he has courted controversy ever since.
- Rogan’s deal encouraged advertisers to sign with the platform, including Omnicom, which committed $20 million and cited Rogan as part of its reasoning.
- A number of musicians, including Neil Young, Joni Mitchell, and Nils Lofgren, came out against Spotify, in some cases pulling their music from the platform entirely.
- “Irresponsible people are spreading lies that are costing people their lives,” Mitchell wrote on Friday. “I stand in solidarity with Neil Young and the global scientific and medical communities on this issue.”
- The damage goes beyond music: Bestselling author Brené Brown has paused the release of her two Spotify-exclusive podcasts in the wake of the protests.
Competitors take advantage: The controversy has opened a door for Spotify rivals.
Apple tweeted a message calling itself “the home of Neil Young.”
- Young encouraged his fans “looking for my music” to sign up for Amazon Music, where they would receive four free months.
SiriusXM announced “Neil Young Radio,” a dedicated channel on its streaming service.
Why it’s important: The debate regarding Spotify and Rogan shows how brand safety and values have become increasingly important topics in the advertising industry.
It also raises questions about how much responsibility platforms should have for messages creators post on them. While the pandemic has highlighted social divisions, particularly in the US, brands have been held increasingly accountable for everything from their suppliers to the platforms they advertise on.
Will Spotify suffer? While #CancelSpotify was trending on Twitter on Friday, most advertisers are not currently pulling their Spotify advertising spend or speaking out on the issue.
- Similarly, most advertisers haven’t pulled their advertising spend from Meta over controversies on its platforms, though brands did boycott Facebook for a month over hate speech and disinformation concerns.
- Unlike Meta, which includes Facebook and Instagram, Spotify is a secondary advertising platform for many advertisers—so it may be more cuttable.
- At the same time, ads are only about 12% of Spotify’s business, notes Insider Intelligence senior forecasting analyst Peter Vahle, so a month or so of depressed ad dollars wouldn’t have a significant impact on its bottom line.
- Spotify’s siding with Rogan over Young represents the platform’s business plan. Podcasts are a major component of the platform’s future.
- Spotify sells spots in Rogan’s show directly to advertisers, meaning brand safety may not be a concern since brands have to opt in. But that approach doesn’t scale to the majority of Spotify’s podcast ads, which are sold and inserted programmatically.
- Spotify’s brand safety controls allow advertisers to select what topics they would like to be placed in—but it’s far from a perfect science, as Spotify relies on transcript data of episodes. Google’s YouTube and Amazon’s Twitch have faced similar questions regarding their moderation policies.