How the Streaming Exclusive Died and Came Back to Life
“I said no quickly, brashly, abrasively. Do me a favor — don’t present that to me again.”
Rap expert and podcast host Joe Budden doesn’t mince words in describing the crumbling relationship between his show and Spotify. According to Budden, who ran through a list of candid grievances in a recent episode that aired on Spotify’s own platform, next Wednesday (September 23nd) marks the moment that The Joe Budden Podcast will end its two-year exclusive deal with the tech platform.
Budden claims the relationship soured after Spotify didn’t pay him a $500,000 performance-related bonus payment in September 2019, despite The Joe Budden Podcast being the platform’s most popular podcast at the time; he also alleges that Spotify failed to offer him an acceptable renegotiation package following the explosion in the podcast market — and the $600 million-plus that Spotify’s spent on podcasting — since 2018. He says he rejected a renewal offer from Spotify last year that he characterizes as a “we own all your shit” deal.
“I can’t quote this,” he says, “but they didn’t like that.”
In castigating Spotify, Joe Budden is also (perhaps deliberately) alerting all of Spotify’s competitors to the fact his show is now open for business on a similar exclusive deal elsewhere. Expect a bidding war to break out soon. In that way, Budden’s outburst also highlights a crucial difference between Spotify’s relationship with podcasting stars and its relationship with music’s biggest names — particularly as it relates to the idea of exclusive content.
To date, any exclusive deals struck between music rightsholders and streaming services have centered on frontline releases — most typically by “windowing” new albums on a service like Apple Music for a two-week period. But following experiments of this ilk by artists like Frank Ocean, Chance The Rapper, and Drake, the practice largely wound down in late 2016, hastened by an irked Universal Music Group Chairman Lucian Grainge instructing his labels to stop it. Since that point, the music industry has appeared largely unwilling to experiment with streaming release exclusives again.
Last year in this column, I suggested that an alternative strategy the record business may adopt would be to mirror the film and TV world, inking deals that leave the back-catalogs of “evergreen” artists — be it Queen, Lady Gaga or Drake — exclusively available on singular services willing to pay large minimum guarantees for the privilege.The Beatles, exclusively available on Amazon Music. That kind of thing.
Joe Budden’s rant reminds us that this kind of deal is actually already happening in podcasts — with Spotify paying large advance payments to lock in multi-year talent exclusives that can bring vast audiences to its platform. Spotify’s biggest gamble of this kind to date is the $100 million-plus it’s paying for the Joe Rogan Experience, the biggest podcast the world.
In a recent chinwag on his show with fellow comic Bill Burr, Rogan let slip what this deal comprises. “I got a lot offers to buy half of the podcast or buy a [piece], but I won’t do it,” he said. “Then Spotify came along and said: ‘We’ll give you a licensing deal. Just put it on our network for three [years], but you still own it. I was like, alright, we’re in!” (Rogan actually said “months” but this appears to be a snafu; the official announcement of JRE going to Spotify called it a “multi-year exclusive licensing deal.”)
So what if the shoe was on the other foot? What if, like Joe Budden, musicians start peeling their recordings off Spotify’s platform and striking exclusive Rogan-esque “multi-year” licensing agreements with rival companies?
In its Q2 2019 results, Spotify proudly told shareholders that 21% of its global Monthly Active Users (MAUs) are now accessing podcasts on its service. With 299 million MAUs using Spotify at the close of June, its global podcast listenership therefore equated to 62.8 million people. And yet Drake — currently Spotify’s second-biggest artist — attracts very close to this figure (62.6 million) on his own, in terms of his monthly listeners on the service.
What if Drake was to walk away from Spotify and ink a multi-year exclusive agreement with Apple, Amazon or YouTube? What kind of check would said services write Drake, not to mention his recorded music partner Universal Music Group — and how much could it damage Spotify?
The fact that Universal has just inked a global, catalog-wide licensing agreement with Spotify worth billions of dollars in minimum guarantees suggests the dawn of widespread fractional artist licensing may yet be some time away.
There is, however, already a quiet precedent for it. Back in 2016, country superstar Garth Brooks inked a multi-year exclusive streaming deal with Amazon Music Unlimited. Amazon Music is still the only place you’re able to stream Brooks’ music, with no trace of his biggest albums on the likes of Spotify or Apple Music. Well-placed rumors at the time suggested that Spotify was interested in locking down the Garth Brooks exclusive, but missed out. Amazon ultimately paid a reported $30 million for Brooks’ music four years ago — an amount that it’s presumably re-upped since then.
Spotify is now well-accustomed to handing over checks worth multiples of this sum to bring podcasts exclusively to its service. Joe Budden’s exodus reminds us that streaming platforms may soon have to start paying out similar checks to retain big-name talent, too — begging the question of whether big-name artists will get in on the Budden game.
Tim Ingham is the founder and publisher of Music Business Worldwide, which has serviced the global industry with news, analysis, and jobs since 2015. He writes a weekly column for Rolling Stone.