The great COVID-Joe-Rogan-Spotify Technology SA (NYSE:SPOT) controversy seems to have ended as abruptly as it began, with the platform and its ultra-popular podcast host facing the wrath of a pair of 1970s rock icons and sort of apologizing.
In an otherwise slow week for the entertainment industry, the Spotify story helped to fill a void for show business news. But in the never-slow world of partisan posturing, it seemed to reinforce entrenched opinions on both sides of the COVID debate.
However, what should one make of this brouhaha from a financial perspective? From that angle, the view is somewhat peculiar.
See Also: Spotify CEO Speaks Out: Updates Policies On COVID Content But Refuses To Censor Joe Rogan
Publicity Harvests: The whole kerfuffle began on Jan. 25 when singer/songwriter Neil Young made an unexpected demand of Spotify: remove “The Joe Rogan Experience” from its platform or he would demand the removal of his music. Young accused the Rogan podcast of spreading misinformation on COVID-19 and stated, “They can have Rogan or Young. Not both.”
When Spotify refused to jettison Rogan, Young had his music taken from the site. Another 1970s singer/songwriter, Joni Mitchell, followed suit.
But a few things were overlooked with these actions.
First, Young had a history of complaining about Spotify. In 2019, he threatened to have his music removed from the platform because he felt its sound quality was unsatisfactory. He never went through with that threat.
Second, Young’s latest album “Barn” was released last month, which was followed by an accompanying documentary directed by his wife, actress Daryl Hannah. Despite generating appreciative reviews, Young’s work ultimately got lost in the holiday season shuffle, peaking at #6 on Billboard’s Top Rock Albums chart and #66 on the Billboard Top 200 chart before slipping downward. With the new wave of publicity tied to Rogan, Young brought a fresh focus on his recent work that would never have occurred without the controversy.
As for Mitchell, she had recently been honored at the annual Kennedy Center Honors in Washington, D.C. She was supposed to be in the spotlight as the honoree for the MusiCares Person of the Year all-star concert scheduled for Jan. 29, which was postponed due to COVID. The songwriter was also nominated for Best Historical Album Grammy for “Joni Mitchell Archives, Vol. 1: The Early Years (1963-1967)” but the ceremony slated for Jan. 31 was also postponed for COVID reasons.
Thus, Mitchell’s week in the music industry spotlight was dimmed — although it appears she found a new source of illumination via Rogan — and that cannot hurt her sales of the second volume of her archival recordings she's now selling.
How Badly Did It Hurt? After Young had his music taken off Spotify, media reports began to percolate that the company was suddenly experiencing multi-billion-dollar losses.
Variety ran a story claiming “Spotify’s market capitalization fell about $2.1 billion” in the Jan. 26-28 span following Young’s actions, noting that the stock closed on Jan. 27 “at a 19-month low of $171.32/share.” The San Francisco Chronicle reported the company’s capitalization shrinkage was $4 million.
Even Cathie Wood got dragged into the story, with press reports on how she was dumping $14.5 million in Spotify stock during the unfolding story. Wood didn't offer any public comment on why she was getting rid of this stock.
In reality, Spotify had been experiencing problems long before Young decided to get ornery — its share price fell by 43% over the last three months. If the controversy didn't help, there is no evidence that it hurt the company financially.
But the company seems to be catching a break among investors — shares closed Monday at $196.26, up 13.39%. Spotify’s 52-week range is $164.41 to $387.44. This was fueled, in large part, by Citigroup upgrading the stock from Neutral to Buy while announcing a $240 price target.
Is Everybody Satisfied? Spotify’s $100 million contract with Rogan gives the talk show host an uncommon level of episode control that other content creators do not enjoy — which is understandable, since his show attracts an average of 11 million per episode, a much higher audience level than most legacy media programs.
Still, to give the impression of listening to the concerns of others, both the platform and its star issued respective sorry-not-sorry statements, with Spotify CEO Daniel Ek insisting his company would publish its “long-standing Platform Rules” that defined acceptable content while promising to add advisories to any podcast episode on COVID. Spotify never publicly censured Rogan, nor did it state that any of his episodes were being taken down.
For his part, Rogan posted a rambling 10-minute interview on Instagram where he stated, “If I’ve pissed you off, I’m sorry” — but only after providing a sharp defense of Dr. Robert Malone and Dr. Peter McCullough, the guests on his now-controversial COVID shows, and pushing back at the charge that he disseminated misinformation. Rogan praised them as “very highly credentialed, very intelligent, very accomplished” scientific professionals and thought leaders with opinions “that differ from the mainstream narrative.”
See Also: Joe Rogan Responds To Spotify Controversy: 'I'm A Neil Young Fan'
Rogan’s video was met with praise from several prominent Instagram users including actors Dwayne Johnson (who asked to be on the show) and Dominic Monaghan, singer Jewel and former congresswoman Tulsi Gabbard.
In comparison, the only other music star to follow Young and Mitchell off Spotify was Nils Lofgren, a guitarist for Bruce Springsteen's E Street Band. Despite social media rumors that Springsteen — along with Paul McCartney, Barbra Streisand and Willie Nelson — were going to join the exodus started by Young and Mitchell, no major music star followed suit.
Oh, and there are two more winners that had nothing at all to do with this issue but nonetheless got free publicity and a new revenue stream: Amazon (NASDAQ:AMZN), which is enabling Young to give out four months of free subscriptions as part of his Spotify exile, and SiriusXM (NASDAQ:SIRI), which revived a limited-edition channel devoted to the music star.
As controversies go, this appears to be the gift that keeps on giving.
Photo: Courtesy of "The Joe Rogan Experience"
