It was the deal that helped make Spotify a podcasting giant but has now put the company at the center of a fiery debate about misinformation and free speech.

Spotify was already the king of music streaming. But to help propel the company into its next phase as an all-purpose audio juggernaut, and further challenge Apple and Google, it wanted a superstar podcaster, much as Howard Stern helped put satellite radio on the map in 2006. Spotify executives came to view Joe Rogan — a comedian and sports commentator whose no-holds-barred podcast, “The Joe Rogan Experience,” was already a monster hit on YouTube — as that transformative star.

In May 2020, after an intense courtship, Spotify announced a licensing agreement to host Rogan’s show exclusively. Although reported then to be worth more than $100 million, the true value of the deal that was negotiated at the time, which covered 3 1/2 years, was at least $200 million, with the possibility of more, according to two people familiar with the details of the transaction who spoke anonymously because they were not authorized to discuss it.

But in recent weeks, the show that helped Spotify catapult into a market leader for podcasts has also placed it at the center of the sort of cultural storm that has long engulfed Facebook, Twitter and YouTube, over questions about the responsibility tech behemoths have for the content on their platforms.

More

It began when several prominent artists, led by Neil Young, took their music off the service to protest what they described as COVID-19 vaccine misinformation on Rogan’s show. Then clips from old “Joe Rogan Experience” episodes caught fire on social media, showing him using a racial slur repeatedly and chuckling at jokes about sexual exploitation, prompting Rogan to apologize for his past use of the slur. A #DeleteSpotify social media campaign began calling for a boycott. And some Spotify podcasters publicly criticized Rogan and the platform.

Advertising

At a recent company meeting, Spotify CEO Daniel Ek told employees that exclusive content such as Rogan’s show is vital ammunition in Spotify’s competition against tech goliaths such as Apple and Google.

As Rogan faced growing public criticism, Spotify responded by reaffirming its commitment to free speech, even as dozens of Rogan’s past episodes have been removed. It also made its content guidelines public for the first time, said it would add “content advisory” notices to episodes discussing the coronavirus and promised to contribute $100 million for work by creators “from historically marginalized groups.”

The moves came as Spotify faced growing dissension among high-profile creators. This month, Ava DuVernay, a film director who announced a podcast deal with Spotify a year ago but has yet to produce any content under it, severed her ties with Spotify, according to a statement from her production company, Array.

A Pivot to Podcasting

For Spotify, the move into podcasting is the culmination of years of strategy to find a business that is more profitable than hosting music, for which it must pay about two-thirds of every dollar to rights holders.

The company dipped its toe into video around 2015, but little came of it. By 2018, the year Spotify listed its shares on the New York Stock Exchange, it was forming plans to pursue Rogan, hoping to supercharge its market position in nonmusic audio and to chip away at the dominance of Apple and Google’s YouTube.

To make Spotify a player in podcasting, Ek and his deputies, including Dawn Ostroff, a former television and magazine publishing executive, and Courtney Holt, formerly of Maker Studios, an online video network, set out on a multipart strategy. Spotify would buy audio studios, such as Gimlet, and acquire exclusive rights to existing shows. With Spotify Originals, the company would also create buzzy new programs in partnership with creators such as DuVernay’s Array and Higher Ground, the production company of former President Barack Obama and Michelle Obama.

Advertising

With podcasts, Spotify could be more in charge of its own destiny, and could pocket more of the advertising and subscription fees it relies on. And with the company’s later acquisitions of startups such as Megaphone and Whooshkaa, Spotify could provide better tools for both the many podcasters who work with Spotify and the marketers who purchase ads on the platform. This week, Spotify expanded its portfolio of podcast tools by acquiring two more companies, Podsights and Chartable.

Ultimately, the goal was to provide a pathway for different kinds of content to make its way onto the platform, as the company made clear when it announced that “audio — not just music — would be the future of Spotify.”

Courting Joe Rogan

There was one podcast that executives felt could accelerate Spotify’s growth at the pace the company wanted: “The Joe Rogan Experience.”

Since the show’s debut in 2009, Rogan, a mixed martial arts enthusiast and comedian, had made himself into a podcasting heavyweight, landing an eclectic range of guests and engaging them in freewheeling, uncensored conversations.

The results could be wildly entertaining, as when Rogan smoked marijuana with Elon Musk, the billionaire founder of Tesla, in 2018. Or they could be inflammatory, as when Rogan hosted conspiracy theorist Alex Jones despite Jones being barred from Spotify for violating its prohibition on hate speech two years prior.

Rogan’s show was one of the biggest success stories in podcasting, but for years it was not available on Spotify. In May 2020, Spotify wooed him with an offer he couldn’t refuse.

Advertising

After the deal was made official, Rogan had a message on his show for fans who might fear more corporate control: “It will be the exact same show. I am not going to be an employee of Spotify.”

Spotify’s stock price jumped 17% the week the deal was announced.

Managing the Crisis

As the months wore on and Rogan showed no sign of shying away from controversy, more people connected to the company began to speak out against his presence on the platform.

In January, after 270 scientists, medical professionals and others wrote to Spotify to raise alarms about COVID-19-related misinformation on Rogan’s show, executives made assurances internally that the company was taking the issue seriously and that it was continuing to review Rogan’s shows to make sure they were complying with Spotify’s rules, said a person involved in the discussions.

The issue exploded Jan. 24, when Young posted a public letter demanding that his music be removed from Spotify over coronavirus misinformation. “They can have Rogan or Young,” he wrote. “Not both.”

Signs of a Cultural Divide

Management of the crisis in the United States may have been further complicated because Spotify’s headquarters is nearly 4,000 miles away, in Sweden, where Ek, a publicity-shy executive who grew up in a suburb of Stockholm, and many of the company’s engineers and longest-tenured employees are based.

Sponsored

Free expression is a deeply held belief in Sweden. Many employees there — and in the United States — were angry when Spotify removed music by R. Kelly and XXXTentacion from playlists in 2018 for content or conduct deemed offensive, a decision the company quickly reversed.

In a recent memo to employees, Ek wrote that “canceling voices is a slippery slope” but acknowledged that a number of episodes of Rogan’s show had been removed from the platform. He wrote that Rogan had decided to remove them after meetings with Spotify executives and “his own reflections.”

More on the COVID-19 pandemic