Last week was arguably the biggest week for podcasting in 2020 with Spotify’s market cap jumping $5 billion, yes BILLION, after signing Joe Rogan to an exclusive deal in the neighborhood of $100M and Barstool’s podcast “Call Her Daddy” making the national spotlight for all sorts of dramatic and contractual reasons.
I won’t go down the rabbit hole of the Call Her Daddy situation, but it says a lot about the state of podcasting, influencers, and media today. Call Her Daddy is Barstool’s top podcast, with over 2 million listens per episode and was started less than two years ago. The two hosts were offered $500k base salaries, a lot of bonuses, and full rights to the IP in one year in a deal to continue the show once a week. All of this in the middle of a three year contract. Sounds like a pretty sweet deal, right? Well, they initially turned it down and the situation was spiraled from there. Ultimately the show will be back on air this week for the first time since early April but only with one host. This speaks to the power that content creators have in the current media landscape. As content creators amass their own followings, they become more and more valuable and also harder to control.
Speaking of the ultimate podcast content creator, let’s go more in depth on Joe Rogan’s deal and Spotify’s quest to knock out Google, Apple, and Amazon to ultimately win this platform. First off, this purchase is just one of a several huge acquisitions Spotify has made in the podcasting space. Just in the past two years they’ve acquired Parcast ($55M), Gimlet Media ($230M), Anchor ($340M), The Ringer ($190M) and now Joe Rogan for an estimated $100M+ multi year deal, no concrete details have been made public. What makes Rogan’s deal unique is that he ultimately gets to keep the IP.
$100M+ is a lot to pay for one podcast, especially one that you don’t get to keep the IP for, but did Spotify overpay? Actually, probably not. First off, this is a clear shot at Apple who despite ramping up their own push into original podcasts, and benefits significantly from having their podcast app the default app on every iPhone, has seen its podcast market share slip from 80% to 63% in recent years.
On the other hand, Spotify continues to be more aggressive and grow with now over 286M users and a stock that shot through the roof last week. The stock currently sits at $191 with a market cap at $35B just last week before the deal got acquired the stock was sitting at $161.43 with a market cap of $30B. Essentially, they paid $100M to have their value go up $5B. And, the market says they will get a 50x ROI on that investment.
This will be very interesting to see play out. Joe Rogan, who generates 150M podcast downloads a month on top of over a million YouTube views per day, will not be putting content on those platforms any more. My gut feeling is that Joe Rogan’s views and downloads will decrease significantly but a good percentage of his followers will migrate from Apple and Google to Spotify taking that share from those companies. Based on the stock price increasing exponentially it seems easily worth the risk for Spotify and it is good to see an independent podcaster like Rogan get a massive payout. With podcast listenership and ad revenue continuing to grow at a double digit clip per year, with no sign of slowing down, it is no wonder that Apple, Google, and Spotify are all vying to win this game.
On tomorrow’s “Podcasting for Brands Master Class” webinar, I will be going more in depth on the state of podcasting and audio 2020 and what this means for smaller podcasters and brands who produce shows. There is a 1pm and a 6pm CDT slot that you can sign up for, more details below.