Spotify shares are down more than 16% mid-day Thursday after middling growth projections disappointed some investors.
But CEO Daniel Ek said that the growth projections for Q1 shouldn’t be such a big deal for investors.
“Let’s just start with our Q4. 406 million users, 180 million subs. It was our biggest quarter ever when it came to growth and we pretty much beat on every metric. So I’m incredibly proud of that. Now that said, Q1, just frankly matters a lot less to our business overall than the other three quarters. So I think maybe investors are reacting to that, but I feel really, really confident in our overall growth trajectory,” Ek told CNBC’s “Squawk on the Street.”
Ek also said he feels good about how the streaming company has addressed growing controversy around podcaster Joe Rogan, including concerns from medical professionals that the celebrity is spreading Covid-19 misinformation on his show.
Spotify has been embroiled in controversy since musicians Neil Young and Joni Mitchell recently boycotted the service for continuing to host “The Joe Rogan Experience,” which has been accused by medical professionals of spreading Covid misinformation. On Wednesday, Young’s former bandmates Crosby, Stills and Nash asked to pull their content from Spotify.
Spotify responded to the controversy by publishing its content policies for the first time, which address dangerous, deceptive, sensitive and illegal content. The company on Sunday said it would add content advisories to any material mentioning Covid-19, following an uproar from musicians, public health officials and some users who argued Spotify needed to adopt stronger policies to combat Covid-19 misinformation.
“When you look at what the scientific community have asked us to do, it was really around three things and all of those three things we delivered this weekend,” Ek said.
“So I feel good about that.”
On the company’s earnings call Wednesday, Ek explained the company is trying to support creative expression while ensuring user safety.
“I think the important part here is that we don’t change our policies based on one creator nor do we change it based on any media cycle or calls from anyone else,” Ek told investors on the call. “Our policies have been carefully written with the input from numbers of internal and external experts in this space. And I do believe they are right for our platform. And while Joe has a massive audience — he is actually the number one podcast in more than 90 markets — he also has to abide by those policies.”
The company’s response echoes policies from Facebook and other social media platforms that have struggled with users generating or sharing misinformation or harmful material. However, unlike those platforms, Spotify signed an exclusive deal with Rogan and is paying him — a relationship that is much more akin to a traditional media company’s deals with content creators.
— CNBC’s Jessica Bursztynsky contributed to this report.
