Spotify’s Exclusive Agreement with Joe Rogan Begins September 1

In May, Joe Rogan shocked the podcasting world when he agreed to an exclusive $100 million licensing deal with Spotify. Today, his podcast The Joe Rogan Experience debuts on the platform.

There's a lot at stake

Just about two years ago, Spotify shifted its eye of Sauron toward the small but growing podcasting industry. In a blog post from early last year, CEO Daniel Ek said he realized that “audio—not just music—would be the future of Spotify.”

• Spotify had 185,000 podcasts on its platform in 2018; now it has over 1.5 million.

Last year, Spotify filled its shopping cart with podcast companies Gimlet Media and Anchor for $340 million before snapping up Bill Simmons’s sports and entertainment media-factory The Ringer for $200 million in February.

Thus began a podcast talent shopping spree

The company’s highest-profile get has undoubtedly been the hundred million dollar man Joe Rogan and his 190 million monthly downloads. But for listeners who aren't into hunting or three-hour episodes, Spotify also signed megatalent like Michelle Obama and Kim Kardashian West to podcasting deals.

• All told, Spotify’s known investments in podcasts come to $696 million.

But as it’s focused on bringing in new talent, Spotify may have overlooked its existing roster. One of the platform’s most popular exclusive podcasters, Joe Budden, ripped Spotify last week for “pillaging” his audience, accusing the company of leveraging his popularity to gain subscribers without properly compensating him.

Bottom line: Spotify’s interest in podcasts can be boiled down to one inconvenient truth: the music streaming business isn’t very profitable. Spotify loses nearly 75% of its revenue to royalties paid to record labels, music publishers, and other rights holders, writes the WSJ. As Rogan kicks off the new era of exclusive content, Spotify thinks it's got the arsenal to upend Apple's podcasting dominance.