Rumour on the street is that Joe Rogan& #39;s blockbuster deal is a steal for Spotify and a bad hand for him.
Basically, Joe Rogan is getting ripped off. He& #39;s given up the monetary upside of his business for small conveniences.
Let me break it down [Thread]:
Basically, Joe Rogan is getting ripped off. He& #39;s given up the monetary upside of his business for small conveniences.
Let me break it down [Thread]:
If the publicised numbers are true, Spotify just secured the largest podcast audience in the world for $100-$200m. That& #39;s a bargain.
Spotify’s market cap jumped by $3 billion in the 24h after the news of this deal broke. That& #39;s the power of ownership. /2
Spotify’s market cap jumped by $3 billion in the 24h after the news of this deal broke. That& #39;s the power of ownership. /2
On the surface, it sounds like a sweet deal for Joe.
Listeners still get the pod for free—but only on Spotify. Spotify Premium subs get the pod w/o ads, but free users will have to listen to ads (sold by Spotify).
Joe previously made c.$64m annually. Now he gets 2-4x that. /3
Listeners still get the pod for free—but only on Spotify. Spotify Premium subs get the pod w/o ads, but free users will have to listen to ads (sold by Spotify).
Joe previously made c.$64m annually. Now he gets 2-4x that. /3
So he& #39;s getting up to 4x the money, and doesn& #39;t have to worry about the business end. Perfect, right?
Not really. The gold here is his audience. He& #39;s losing control of that.
If he leaves Spotify in 3yrs he& #39;ll lose any monetary value from new subs in that time. /4
Not really. The gold here is his audience. He& #39;s losing control of that.
If he leaves Spotify in 3yrs he& #39;ll lose any monetary value from new subs in that time. /4
Joe could& #39;ve kept selling ads in addition to offering a subscription-only ad-free stream, + possibly bonus eps/extended content/live streams for paying subscribers only.
Joe& #39;s audience is c.12m listeners.
Converting just 5%, that& #39;s over $33m in annual recurring revenue. /5
Joe& #39;s audience is c.12m listeners.
Converting just 5%, that& #39;s over $33m in annual recurring revenue. /5
An extra $33m doesn& #39;t sound like much but remember he& #39;s already making c.$64m in ad revenue. This puts Rogen at almost $100m fully independent of Spotify.
And how much is his Spotify deal worth? c.$100m. Same money, 100% ownership.
But there& #39;s more... /6
And how much is his Spotify deal worth? c.$100m. Same money, 100% ownership.
But there& #39;s more... /6
Joe Rogan would& #39;ve been building his own empire w/ recurring annual revenue.
Imagine a startup w/ crazy recurring revenue, low churn and insane margins, growing at 25-50% per year! That& #39;s Joe Rogan.
That& #39;s what Spotify is seeing. That& #39;s why they& #39;ll happily pay. /7
Imagine a startup w/ crazy recurring revenue, low churn and insane margins, growing at 25-50% per year! That& #39;s Joe Rogan.
That& #39;s what Spotify is seeing. That& #39;s why they& #39;ll happily pay. /7
This model isn& #39;t new or rare. Look at his mate Sam Harris.
Sam aggressively pushes a sub. model. He has c.1.5m listeners. He& #39;s been doing this since 2014.
If he converts free listeners at a 5% rate at $5/month that gets him $4.6 million in annual recurring revenue. /8
Sam aggressively pushes a sub. model. He has c.1.5m listeners. He& #39;s been doing this since 2014.
If he converts free listeners at a 5% rate at $5/month that gets him $4.6 million in annual recurring revenue. /8
Now imagine instead of 5% he& #39;s converting at 20% (more likely).
Suddenly that& #39;s $18.4 million in annual recurring revenue. With only 1.5m listeners.
Joe Rogen has up to 12x that audience. /9
Suddenly that& #39;s $18.4 million in annual recurring revenue. With only 1.5m listeners.
Joe Rogen has up to 12x that audience. /9
TL;DR
Spotify deal = c.$100m
Min opportunity cost:
Ad rev - $50m
Subs @ $5 - $33m
Youtube - $27m
Total: $110m
Max opportunity cost:
Ad rev - $200m
Subs @ $10 - $66m
Youtube - $68m
Total: $334m /10
Spotify deal = c.$100m
Min opportunity cost:
Ad rev - $50m
Subs @ $5 - $33m
Youtube - $27m
Total: $110m
Max opportunity cost:
Ad rev - $200m
Subs @ $10 - $66m
Youtube - $68m
Total: $334m /10