Spotify’s troubles continue

Spotify’s troubles continue
Source: Getty Images

The backstory:

  • Joe Rogan is a famous and divisive figure in North America. He’s 54 years old and also the biggest podcaster in the world.
  • His podcast, “The Joe Rogan Experience,” accounts for 4.5% of all shows heard on Spotify Technology SA since it debuted in September 2020.
  • And in 2021, over a year after Rogan signed an exclusive US$100 million deal with Spotify (meaning you can only find some of his content on their platform), Spotify said his podcast was the most listened to podcast of the year.
  • With this exclusive deal signed, the company’s share price increased to a record high, taking co-founder and chief executive officer Daniel Ek’s net worth up to US$5.7 billion. Shortly after, Ek made a bid for London’s Arsenal Football Club. (He was outbid by American billionaire Stan Kroenke.)
  • But last year, Rogan aired an episode of his podcast where he spoke to Dr. Robert Malone, who claims to be one of the architects behind the mRNA vaccine technology. But Malone is also known for sharing COVID-19 misinformation, which has gotten him banned from Twitter.
  • Then, 270 medical professionals and educators published an open letter to Spotify calling on the platform to take action against misinformation.
  • Spotify’s perceived support of Rogan has prompted artists to leave the platform, and, last Sunday, Rogan made a public apology on Instagram.

The development:

  • There are several moving parts, but essentially, Meta Platforms, Inc. suffered a huge drop, taking off US$230 billion from its market capitalization, which spilled over to the overall tech sector, dragging the Nasdaq Composite Index lower. The tough tech market also hurts Spotify, making a bad year worse for the audio streamer.
  • The company posted its numbers on Wednesday, showing how it would end the first quarter with 418 million total users and 183 million paid subscribers, which is lower than Wall Street expectations.
  • Amid all of this, the company is facing accusations of helping spread misinformation about COVID-19 with the Joe Rogan controversy, which is also leading to a bit of an exodus of artists from the platform.
  • Most of Ek’s wealth is tied up in Spotify shares (he owns around 8%), and he’s seen a US$1 billion drop in his net worth so far this year.

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