Spotify CEO Says Last Few Days “Presented A Number Of Learning Opportunities,” Addresses Joe Rogan Controversy At Top Of Earnings Call – Update
UPDATED with CEO comments, stock price: Spotify CEO Daniel Ek took the bull by the horns, addressing the widening controversy over Joe Rogan in his opening remarks on a conference call with Wall Street analysts after the company’s fourth-quarter earnings report.
“Obviously, it’s been a few notable days here at Spotify. When we entered the podcast space in 2019… we assumed it would challenge and test our teams in new ways, and there’s no doubt that the last several weeks have presented a number of learning opportunities,” he said.
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Numbers for the December quarter didn’t reflect any fallout from the current row, which has seen a string of musicians starting with Neil Young pull their catalogs from the streamer to protest Covid-19 misinformation on The Joe Rogan Experience podcast. He was joined by Joni Mitchell, Graham Nash and Nils Lofgren, India.Arie and most recently Crosby, Stills & Nash.
Will it have an impact? Ek said it’s too early to know. “Usually, when we have had controversies in the past [the effect is measured] over months not days.”
But the founder clearly hopes steps Spotify announced Sunday will help it get past this. He reiterated them today, including “publishing its policies and making them clear to the world” – something he said Spotify should have done sooner anyway. “That’s on me.” Rogan will have to abide by the guidelines.
Spotify will also be tagging all Covid-19-related podcast episodes. “This is being rolled out right now, while we are speaking,” he said. The content advisories directing listeners to a dedicated hub with resource and links to information about the virus.
Spotify has “a critical role to paly in balancing creative expression with the safety of our users,” he said. “There is still work to be done.”
The company had another headache today. Wall Street wasn’t thrilled with its results or its forecasts, released after market close. Shares took a 17% nosedive in after-hours trading before settling, down about 10%.
PREVIOUSLY: Spotify said monthly active users rose 18% to 404 million for the fourth quarter of 2021 as premium subscribers hit 183 million and revenue grew 24%. It reported numbers as controversy swirls around Joe Rogan.
The shares plunged 17% in after-hours trading on disappointing growth forecasts.
Founder and CEO Daniel Ek will host a call at 4:30 ET to talk numbers and address if he wishes the flurry of defections by artists protesting Covid-19 vaccine misinformation by the host of The Joe Rogan Experience. The movement started last week as Neil Young pulled his music off the service. He was joined by Joni Mitchell, Graham Nash and Nils Lofgren, India.Arie and most recently Crosby, Stills & Nash.
Ek and Rogan both addressed the issue over the weekend. The chief executive said he didn’t want Spotify in the role of censor but would add a content advisory to any podcast episode that includes a discussion about COVID-19 directing listeners to a dedicated hub with resource and links to information about the virus.
Rogan said he was sorry for landing his employer in a fix and that he’d try to represent more point of view. “I would like to talk to some people who have differing opinions on the podcasts in the future. I do all the scheduling myself and I don’t always get it right.”
Prince Harry and Megan Markle’s Archwell released a statement of concern over Covid-19 misinformation on Spotify, without mentioning Rogan. The pair have a deal with the company worth a reported $25 million to make podcasts.
Rogan himself has a reported $100 million deal to license his podcast to the streamer. That makes Spotify more responsible for the content he airs than if it was widely distributed, according to some.
Last month, 270 medical professionals wrote an open letter to the streaming giant asking it to take action against Rogan’s podcast, accusing the company of broadcasting misinformation.
Wall Street is mostly concerned with the business backlash. The dustup pummeled Spotify shares – erasing $2 billion in value at one point. It gained back ground early this week (before today’s plunge) on bullish reports by analysts who believe the controversy will blow over.
Spotify said that at the end of the fourth quarter it had had 3.6 million podcasts on its platform (up from 3.2 million at the end of Q3) and saw a double-digit increase in the number of MAUs that engaged with podcast content relative to Q3. It said podcast share of overall consumption hours reached another all-time high.
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