A fool and his money

Interesting post about how Joe Rogan got ripped off by accepting what would appear to be a no-brainer, $100 million deal with Spotify:

Daniel Ek, the CEO of Spotify, who just closed an exclusive deal with Rogan to move his show (audio and video) to the Spotify platform.

If the numbers are to be believed, it’s a steal of a deal for Spotify: for $100-$200mm they secured the largest podcast audience in the world.

I’m not exaggerating. Spotify’s market cap jumped by $3 billion in the 24h after the news of this deal broke.

The market saw what Rogan missed: Spotify took his oil. […]

By doing this deal, Rogan gives up control over his subscriber relationship. Any new audience he builds from here on out, he loses. His existing podcast feed will likely die as most people eventually unsubscribe due to inactivity.

If he goes back to being independent and ditches Spotify in 3 years, he has lost all of his new subscribers during that time, and some of his original subscribers as well.

It’s like Disney licensing their Disney+ content to Netflix. It might net a big one-time payout, but it completely erodes the business value that would otherwise accrue to them.

There’s more detailed analysis in the post. Worth reading if you are a “content creator.”

2 thoughts on “A fool and his money

  1. While it seems there are some drawbacks to the deal, am I correct in understanding that he is receiving $100 million? Is it possible that this is a fair price for his business? I did not see a comparison where someone determined he was giving up a 200 million business for only 100 million. Also, are we clear that Joe Rogan knew none of this? The article implies that Joe Rogan who just earned $100 million dollars, while most of the rest of us have less than half of that, is a fool who was duped. Is this the case? If so, could the content of the article next time match the titel?

    • He is reportedly receiving $100 million. Hey, kudos to him. I don’t have $100 million! But that is probably not a fair price for his business, for the reasons explained in the article.

      To be clear, Rogan can do whatever he wants with his life and money. To Rogan, a one-off payment of $100 million may be worth losing control of his business, his relationship with his audience and hundreds of thousands of dollars a month in recurring revenue, forever. Maybe he just wants to kick back and focus on other things than growing his show. I’m not judging. I do think it was a bad business decision though.

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