Joe Rogan strikes again. This time the popular Spotify podcaster used racial slurs after a montage video surfaced showing him repeatedly saying the N-word. In an Instagram apology, Rogan (pictured) shared that the incident was the "most regretful and shameful thing” he’s had to talk about publicly, and added that while the video was taken out of context, it still looked "horrible” even to him.

Rogan’s apology came shortly after singer India Arie decided to remove her content from the platform.

While Spotify CEO Daniel Ek also condemned Rogan’s actions, according to The Hollywood Reporter , Ek said he did not believe in silencing the creator. Ek added that the platform has “clear lines around content” and will “take actions when they are crossed” but “cancelling voices would be a slippery slope".

Rogan’s second apology comes shortly after he faced backlash against COVID-19 misinformation in his programme,  The Joe Rogan Experience , to which Spotify said it would add content advisory to any podcast episode that includes a discussion about COVID-19, and will direct listeners to its dedicated COVID-19 Hub. Rogan’s content on COVID-19 also led to 270 scientists and medical professionals signing a letter earlier this month, urging Spotify to take action against Rogan for spreading falsehoods on the podcast.

Following the letter by scientists and medical professionals, singer-songwriter Neil Young sparked a protest by releasing a now-deleted public letter to Spotify asking the platform to make its choice between him and Rogan. Spotify has since removed Young's songs from its platform as per his request. 

Following the incident, Ek said: “We have had rules in place for many years but admittedly, we haven’t been transparent around the policies that guide our content more broadly.”

Spotify has been making significant investments in the podcasting space and inking a multi-year deal with Rogan, which was said to run over US$100 million, has been a key pillar to its strategy. It also acquired podcast companies Gimlet Media for US$230 million, story-based podcast studio Parcast for US$56 million, and Anchor podcasts for more than US$100 million.

In its latest fourth quarter financial statement, Spotify also said it acquired Whooshkaa, a podcast technology platform that offers a specialised tool for radio broadcasters to turn their existing audio content into on-demand podcast content. The technology is now being integrated into the Megaphone suite which will bring more third-party content into the Spotify Audience Network and is touted to “connect advertisers to more audiences, and allow radio broadcasters to expand their reach and increase monetisation”.

While it is safe to say that podcasting as a content stream will remain at the forefront for the company, Spotify also has to ensure it has the iron-clad guidelines in place to deal with misinformation spread and brand safety issues as more content creators venture into the space, said industry players MARKETING-INTERACTIVE spoke to.

In fact, while platforms such as Facebook and YouTube have been dealing with misinformation and brand safety issues for some time now, Spotify has still managed to keep its reputation clean with the platform being used frequented by many for its large library of music. But the question remains, will this last?

According to media veteran and former Star Media Group CEO Andreas M. Vogiatzakis, the threat of misinformation is not one faced by Spotify alone, but every media platform with user generated content. Ultimately, it boils down to the measures put in place to control the narrative and ensure that it is truthful.

Vogiatzakis, who is currently the founder and executive director of AMVPLUS ADVISORY, added that there is a fine line to allowing, encouraging, and nurturing freedom of speech versus blocking misinformation. 

“The one does not negate the other, and media platforms should keep that in mind, and ensure they act accordingly. If we steal freedom of speech and expression in the name of misinformation, then we are stifling creativity and freedom which are values dear to a free world,” he said. However, prudence, diligence and care need to be taken to foster freedom, not stifle it, he added.

Damage done to brand

According to a Forrester Research blog post published last week, 19% of Spotify customers polled in the US, UK and Canada said they had either already cancelled their subscription or plan to do so in the near future. The same proportion said they would consider cancelling if more artists left the platform.

However, in a blog post, Mike Proulx, VP, research director and Kelsey Chickering, principal analyst at Forrester said:

It’s hard to untether a brand that’s embedded into one’s daily routines.

Features such as Spotify’s personalised recommendations, social graph, and year-end wrapped features make the platform sticky. For consumers, it is hard to part ways with years of manually curated playlists, and third-party migration tools add friction to follow-through. This gives Spotify additional resilience to mitigate cancel culture’s impact.

According to Nishant Kaushal, head of data, strategy and solutions at ADNA, in the age of heightened sensitivity towards online information, the perception that the company is profiting by letting misinformation fester will be detrimental for long-term brand value. If there is enough momentum, the impact can be seen in the short-term too.  

Commenting on Forrester's research finding, Kaushal said that it’s likely that a substantial proportion among them might not follow through to taking action. He said:

The innovation research we have done at ADNA often shows there is almost always a gap between expressed intent and actual behaviour.

“The further news on Rogan’s repeated use of race inappropriate language has only brought more attention to [his content and style]. Spotify will be well-advised to learn from platforms such as Twitter and Youtube and outline its own rules and regulations that its content creators and users have to comply with,” said Kaushal.

Won’t feel the impact from ad dollars

In the fourth quarter, Spotify said that its revenue of US$3,065 million grew 24% year-on-year to significant strength in advertising and favourable FX movements, and podcast revenue strength was led by the Spotify Audience Network.

Overall, Spotify’s ad-supported revenue reached a record 15% of total revenues in the quarter and continued to benefit from higher sold impressions, increased CPMs, and growing demand within the Spotify Audience Network. Additionally, podcast revenue benefited from strong growth across existing Spotify studios and exclusive licensing deals.

Kaushal added that when it comes to music streaming, the balance of power is very much skewed towards the global distributors versus content creators. The top three global music giants, Spotify, Apple and Amazon command approximately 60% of the global music streaming subscriptions market with Spotify leading with more than half of it. Contrasting that to the innumerable content creators wanting to reach out to the populace through these platforms, the platform is unlikely to feel the pinch.

“It is quite unlikely that the loss of a few artists would impact Spotify’s business to any meaningful extent unless it accelerates to an avalanche of levers and/or end-customers taking unfavourable action,” said Kaushal.

Forrester’s Proulx and Chickering added that if the 2020 advertiser boycott has taught us anything, it’s that these incidents don’t generally leave a lasting impact on the bottom line.  

“The 2020 advertiser boycotts on Facebook had little effect on the platform’s behaviours and no negative impact to its bottom line, despite the fact that advertising accounts for  97% of Facebook’s revenue . On the contrary,  only 13% of Spotify’s revenue comes from ads . The rest (87%) is generated through its premium subscriptions,” said the post.

Moreover, while ads power Facebook, talent powers Spotify. The case can be made that Spotify should be accountable for the talent they license and promote, just like Facebook should be accountable for the content they get paid to advertise.

And marketers, as brand stewards, should be accountable for guiding their media buys away from misinformation and toward content and platforms that align with their brands’ standards and values.

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