There were several reactions to the recent controversy between Neil Young, Joe Rogan, and Spotify. Young had issued an ultimatum to the Spotify to remove the Joe Rogan podcast or remove his catalog. Young’s ultimatum came after he accused Rogan of allegedly spreading lies about the COVID-19 vaccines. Ultimately, Spotify agreed to Young’s demands and removed the catalog. Artists such as Joni Mitchell and Nils Lofgren followed Young’s move, and there are others expected to follow.
A funny thing happened. The business of music was put into the mainstream spotlight as we haven’t seen in a long time. While it certainly has gotten twisted in a world of partisan political debate, it still has put things into the spotlight. I can tell you I have shared hundreds of Cigar Jukebox articles on social media and no story has ever created this much buzz.
Guess what, this is not necessarily a bad thing that has happened. In most cases, there are probably more winners than weasels here. I’ll recap them here. The thoughts here reflect this author and this author alone.
Joe Rogan Wins
Joe Rogan is a polarizing figure. For those who don’t support Rogan, there is no loss here – they could care less. For those who support Rogan, he’s gotten more publicity and attention from this story – making his brand even more bigger. Following the controversy, I now wonder how many people who never tuned into Rogan are now actually tuning in to him. Also following the controversy, there was another controversial subject covered on climate change when Canadian clinical psychologist Jordan Peterson was a guest. Doubtful this climate change story would have garnered any attention if it wasn’t for the Neil Young controversy.
Neil Young Wins
Music streaming rights are an extremely complex business proposition. As the Los Angeles Times pointed out, it is not an easy proposition to pull the plug. Artists do now have a direct relationship with Spotify or the other streaming services. These relationships are managed through record label and publishers. In the case of Young, it was a year ago when he sold 50% of his rights of his back catalog to British Investment company, Hipgnosis Sound Fund for in excess of 150 million dollars.
Guess what, while Young wasn’t the first to do so, he pulled it off – and he got Hipgnosis as well as his label Reprise Records to agree to it. The move off Spotify isn’t going to make Young money. Billboard magazine estimated Young will lose 10% of his income with the move off Spotify. Down the road, things can change. Artists still make more of their money off touring, and Young still has the other streaming services. Neil Young got more publicity off this move than releasing any new album. It’s fair to say when he goes back on this tour he will have his energized base ready to support him.
Exclusive content will become more an option for Young. The wheels were already put into motion when a deal was inked with SiriusXM to bring back Young’s exclusive music channel. I imagine exclusive content combined with touring will offset this 10%.
Some Other Artists Win, Some Don’t
If Neil Young can do it, then why can’t other artists do it? We’ve seen Nils Lofgren and Joni Mitchell move forward with following Young. There are bigger artists out there, but its ultimately going to be more complicated for artists such as Taylor Swift, The Weeknd, and Bruce Springsteen (who sold his catalog) probably aren’t going away from Spotify. These artists have much bigger revenue streams than Young, its going to be harder to turn away from that money.
The Los Angeles Times reported that Spotify has 381 million users, including 172 million paid subscribers across 184 countries. The newspaper also reported that Spotify paid out 5 billion dollars in music royalties, accounting for 20% of the recorded music revenues for that year. Many artists, labels, and publishing catalogs would love to have a better piece of the streaming pie, thus impacting Spotify’s bottom line is a very attractive thing to do. As Dave Burck pointed out on Prime Time Jukebox Episode 63, the day could come where an entire record label is pulled off a streaming service – and maybe the day comes where they will do their own streaming.
As mentioned above, I envision platforms such as Spotify, Amazon, and Apple are going to expand their efforts of exclusive content from artists. These not only include exclusive catalog publishing, but original content. Ultimately, this is going to provide great opportunities for artists for additional revenue streams.
If it comes down to Joe Rogan vs. Neil Young, let’s be real. Rogan is a more valuable property to Spotify. Spotify’s platform hasn’t been one that attractive one for the older musician demographic to begin with. As much as the artists wan’t to cut into Spotify’s profits, these actions aren’t going to move the needle too much. The short term panic on Spotify has quickly been offset. Spotify’s stock went up 13.5% on January 31st, and the stock price has recovered.
The same folks blasting Neil Young for leaving have been a little quieter when it comes to the COVID warnings Spotify is putting on its content. In the end, anyone bolting Spotify for this isn’t going anywhere at this time. Most music consumers who don’t follow consumer podcasts could care less.
The Social Media Political Pundits Win
Let’s not forget the social media political pundits. You know who they are. They come from both sides of the aisle, at every chance they get – ram their political thoughts down your throat whether you want to hear it or not. This has created a golden opportunity for those pundits to find something new to ram down your throat. How many posts have you seen about this on social media either bashing Neil Young and the artists who followed him, or those who support Young pushing the hashtag #boycottSpotify? Quite a few to say the least! In all cases, the social media political pundits (whether they want to or not) are keeping this story relevant, and putting the music industry in the mainstream spotlight from an industry perspective that we have not seen in quite some time.