Diversifying Content

Why Spotify Wants More Than Music

Spotify doesn’t want to be a “music jukebox” — it wants to be the global audio platform.
That means:

• Podcasts
• Audiobooks
• Spoken-word exclusives
• Anything that keeps you inside the app longer

The business logic is simple:

• Music licensing is expensive — 70% of your subscription goes to royalties.
• Original or exclusive content is cheaper in the long run and can bring in ad revenue.

The Joe Rogan Deal

In 2020, Spotify signed Joe Rogan to an exclusive deal reportedly worth $250 million.

How it was paid for:

• Rogan’s $70M/year comes out of Spotify’s 30% operating costs, not the artist royalty pool.
• It’s recouped through podcast ad sales, not music revenue.
• Rogan brought in millions of new listeners — all of whom still contribute $8.40/month to the royalty pool.

The irony:
Some people canceled Spotify in protest and switched to Apple Music…
…where they could still listen to Rogan for free on Apple Podcasts if the deal had never happened.

The Censorship Question

Much of the outrage around Rogan is less about economics and more about his views.
Calls to remove him raise a thorny question:

• If you ban Rogan, do you also ban Charles Manson’s music?
• Or GG Allin? Or 2 Live Crew? Or Lenny Bruce?

The danger is creating a modern PMRC — moral guardians who decide which artists are “acceptable.”

The Apple Connection

Podcasts got their name from the iPod, and were popularized by Apple’s iTunes.
Apple’s shift from selling music to offering free podcast hosting was part of a larger strategy:

• Digital downloads had already gutted album sales by letting fans buy only the singles they wanted.
• By the late 2000s, the iPod and iPhone made Apple the primary gateway for both music and podcasts.

When streaming emerged, Apple launched Apple Music — and built its brand partly on the idea of being a “more ethical” alternative to Spotify.

The Reality Check

Apple’s reputation glosses over its role in the industry’s collapse:

• The shift to $0.99 singles destroyed album-era economics.
• iPod/iTunes dominance pushed the industry toward à la carte consumption years before streaming.
• Revenue only began to recover after Spotify launched in the U.S. in 2011.

So while Spotify gets the bad press, Apple played a major role in creating the conditions that made streaming necessary.

Why Diversification Won’t Stop

Whether you like it or not:

• Podcasts and audiobooks will keep expanding in Spotify’s app.
• Exclusive deals will keep coming.
• Both are aimed at lowering reliance on expensive music licensing.

Myth vs. Reality

Myth: Spotify’s expansion into podcasts and audiobooks is a distraction from music.
Reality: It’s a survival strategy — and one Apple helped make necessary.

What This Means

If you hate the “bloat” in the Spotify app, you’re not alone.
But as long as music licensing takes 70% of revenue, streaming platforms will keep chasing other forms of content they can own outright.

One-Sentence Takeaway

Spotify’s push into podcasts and audiobooks isn’t about abandoning music — it’s about finding revenue streams that music royalties can’t eat.