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Spotify signed Joe Rogan to a $100 million exclusive content deal in 2020 because he was controversial. It was what made him valuable. At the time, Spotify was attempting to roll up the entire podcast market, and getting the most provocative podcasters under their tent was core to that strategy.
Controversial people have a funny way of being controversial. After months of hosting guests with opinions outside the scientific consensus on COVID-19 and vaccinations, protests against Rogan for spreading misinformation have reached a fever pitch. Last week, Neil Young gave Spotify an ultimatum: Drop Rogan, or lose his songs from the platform. When that was met with silence, Young pulled his music, and other artists, including Joni Mitchell and Nils Lofgren, have followed suit.
Spotify has attempted to muddle through. CEO Daniel Ek released a statement stating that the company would publicly release its rules for creators, and add content advisories to podcasts that discuss COVID-19. Rogan himself released a close to ten-minute Instagram video promising to host conversations with “more experts with differing opinions right after I have the controversial ones” to “balance things out.”
I don’t think this will necessarily please anybody: Rogan fans don’t want to see compromises, and critics don’t want him on Spotify. My personal view is that you err on the side of challenging ideas rather than deplatforming them. Besides, misinformation has found its way to people since the beginning of time, no matter what you do.
A critical mass of artists who demand changes at Spotify could get something done, however, since Spotify relies on them to make their product worthwhile. Spotify promises its customers that, by paying one subscription fee, you get access to essentially all recorded music. If the Young firestorm continues, suddenly Spotify would be a balkanized platform, losing fans of the various artists who object to Rogan. It wouldn’t be able to rely on the network effects that make people think they cannot live without Spotify, because it’s one-stop shopping for everything audio.
The situation could inspire artists to realize their power in another context: demanding fair compensation for their work. An artist boycott based on being treated like sharecroppers by the streaming giant could gain a lot of traction. Unfortunately, the (understandable) business decisions of some legacy artists, extreme inequality among musical artists, and the way in which musicians are beset on all sides by monopolies may make it difficult to make headway.
Musical copyrights are maddeningly complex and defy universal characterization. But we can say a few things. Copyright comes in two forms: the sound recording rights (for the performance) and the publishing rights (for the songwriting). The success of streaming has made these copyrights newly lucrative for veteran artists. “Older” songs, defined as more than 18 months old, now account for 70 percent of the U.S. music market, and it has led journalists like Ted Gioia to wonder whether old music is killing new music.
The situation could inspire artists to realize their power in another context: demanding fair compensation for their work.
This has led to a gold rush in back catalogs, with labels and outside investment groups offering big bucks for rights to an artist’s music. Bruce Springsteen, Bob Dylan, Paul Simon, Bob Marley, Stevie Nicks, Shakira, John Legend, and many other musicians have sold off partial or full shares. So has … Neil Young, who last year sold 50 percent of his publishing rights to a U.K. firm named Hipgnosis for $150 million. Hipgnosis, staked with $1 billion from private equity giant Blackstone, has a catalog of over 60,000 songs.
Does this mean that a socially conscious musician who sold their catalog would have no ability to pull their music from Spotify? Obviously not, given that one of the artists in question is Neil Young. But who has the power in the relationship can get complicated.
Some catalog deals are just rights to receive a revenue stream, without giving up the publishing or sound recording copyrights. But the buyers prefer to buy copyrights, because then they pay taxes on the capital gain from acquiring an asset, rather than the ordinary income from getting a revenue stream. Many artist deals are for just the publishing rights, like those for Luis Fonsi (“Despacito”) or the late David Bowie. But Sony Music Group got both Bruce Springsteen’s sound recording and publishing rights; BMG got the same from Tina Turner, it appears, and David Crosby made a similar deal with Iconic Artists Group. Nancy Wilson of Heart reportedly gave up administration income. ZZ Top’s deal was for “the entire music interests” of the band.
The artist negotiating that sale could still retain the ability to make decisions on how their music gets used, through something called an administration right. But Spotify is a distribution deal; it’s not like a decision to allow your song to be used in a commercial. Ultimately, an artist’s label would typically get to decide whether to remove music from Spotify, because the label licensed the music in the first place.
Regardless, said Chris Castle, an entertainment lawyer who previously worked for A&M Records, a label would be foolish not to honor a veteran artist’s request. “The last thing you want to do is look at the contract, because the contract is always wrong when it comes to these things,” he told me. “What’s the right thing to do? It’s to back your artist. You want to be able to say, ‘Neil Young is on my label.’” The situation gets different when it’s more of a mercenary player like an outside investment fund, which stands to lose a lot of money. In the case of Young, Hipgnosis has stood behind him. That may not always be the case.
If artists are willing to take stands on what’s published on the platforms where their content is streamed, they may also be willing to join with the handful of artists who have been screaming about how little they make from Spotify. The per-stream rate is fractions of a penny on the platform; even successful artists with millions of streams don’t make enough to live on.
Smaller artists have no financial interest keeping them on Spotify, even if it’s a primary way to reach fans. “Streaming is so little money for any one artist that they don’t care which platform they are on,” Castle said. Larger artists have more of a reason to stay, which has made it difficult to create common cause. The Rogan situation could create that commonality of interests and a willingness to look deeper at Spotify’s business model.
Even with a mass exodus, however, it’s not like there’s some bespoke indie streaming outlet waiting to capture these musical die-hards angered by corporate giants. Young announced after leaving Spotify that he reached a deal with … Amazon Music.
The best you could hope for is a virtuous cycle, where if streamers truly want to keep artists on their platform, they’ll have to pay more, a recognition that the artist, not the platform, truly matters to people. “Every royalty statement’s an insult, and then you get a real insult and it’s boom, that’s the one that knocks you loose,” said Castle. “It sort of points out to [Spotify CEO Daniel] Ek, the reason you have a monopoly is because you’ve been allowed to have a monopoly. If we decide you’re not allowed to have a monopoly, things are going to change for you.”
