Neil Young leaving Spotify boosts rival streamers
When folk-rock musician Neil Young chose to sever ties with Spotify over concerns about misinformation on Joe Rogan’s podcast, it created opportunities for smaller rival music streaming services.
Among them is the Qobuz, a Paris-based streaming service that touts high-quality audio and is named after the kobyz, an instrument used in rituals to dispel evil spirits.
Qobuz – which has hundreds of thousands of subscribers compared to Spotify’s massive audience of at least 380 million – has started to see a surge of new users. Thousands of people – at least double what is typical at this time of year – signed up after Young encouraged his fans to listen to his music on the app, among other platforms, Dan Mackta said, CEO of Qobuz USA.
“Sometimes you see things and wonder what caused them,” Mackta said. “It was, ‘Thank you, Neil.'”
Although smaller rival streaming services have received a boost from fans of Young and other artists who have joined his protest, the effect of the boycott on Spotify has been minimal so far, analysts said. Major pop stars haven’t left Spotify, and app analytics data indicates Young’s protest hasn’t diminished new signups.
Spotify and Rogan released responses to the controversy on Sunday, allaying some of the concerns raised about podcast episodes that discuss COVID-19 with guests who have been widely discredited by the medical community.
Still, the controversy isn’t going away as Spotify continues to face intense scrutiny, from inside and outside the company, over its misinformation policies.
On Monday, key people running the popular science podcast “Science Vs” wrote a letter to Spotify chief executive Daniel Ek, saying the company’s support for Rogan’s podcast felt like “a slap in the face.” And on Tuesday, two other musical artists, Graham Nash and India Arie, left Spotify.
“The concern from an investor perspective is that this will trickle down to more artists potentially pulling their music and following Neil Young’s path,” said Daniel Ives, managing director of Wedbush Securities. “The concern is that this will not end what has been a nightmare situation for Spotify.”
Since the latest Rogan controversy erupted, some Spotify employees have expressed their frustrations on the company’s joint Slack channels, sharing their opinions, experiences and doubts about the company’s direction, according to two Spotify employees who declined to be named because they were describing internal staff. conversations.
“There were even people who directly tagged Daniel Ek in comments, saying, ‘Daniel, I hope you read all these comments,'” one of the employees said.
Some workers shared stories about the company’s handling of the situation, while others shared tweets or comments favorable to Spotify, which is based in Stockholm but has a large presence in the downtown arts district. city of Los Angeles.
Some staff make “emotional appeals about how seeing these stories in the press every day affects their ability to work here, their desire to work here, their recruitment efforts to attract others to work here,” the employee said.
A similar internal uproar ensued in 2020 over Rogan’s comment about transgender people.
“There’s a fool me once, fool me twice aspect,” the employee said. “So what happens when there’s controversy next year, and the year after, and the year after? Because there have been all these warning signs along the way.
A second employee said concerns from internal employees have been bubbling since Rogan became exclusive to Spotify in 2020.
“I have personally been involved in conversations with co-workers about being uncomfortable or ashamed of being under the same umbrella,” the employee said. “People were upset when [Rogan joined Spotify]and Joe Rogan has done very little to allay concerns since it happened.
The company is expected to hold a Wednesday morning town hall with staff the same day it releases its fourth quarter results, employees said.
Spotify did not respond to a request for comment.
In a blog post on Sunday, Ek wrote “it’s important to me that we don’t take the position of content censor while ensuring there are rules in place and consequences for those who break them” .
The number of people paying to listen to ad-free music on Spotify is expected to hit 180 million in the fourth quarter, up 16% from a year ago, according to an average of analyst estimates from FactSet. Analysts forecast revenue of $2.97 billion, up 14%, and a net loss of $93 million in the quarter.
Shares of Spotify closed Tuesday at $203.62, up 4%.
Michael Morris, senior managing director at investment and advisory firm Guggenheim Partners, said he doesn’t believe there will be a significant effect on Spotify’s finances due to the handful of artists who have left. Spotify.
Global installs on the Apple App Store and Google Play Store for Spotify remained unchanged before and after Young’s actions, according to San Francisco-based Sensor Tower, which tracks app installs.
“Consumers’ level of passion for the topic or individual content is no more important than their broader appetite for the platform as a whole,” Morris said.
Nonetheless, Spotify’s competitors such as Qobuz and Tidal received a boost in app installs, according to Apptopia, a Boston-based app data company. Qobuz installs grew by 64% and Tidal’s by almost 23% based on an average of global app installs from January 26-31, compared to January 20-25, Apptopia said.
“We can confirm that we are seeing strong interest and are always welcoming new members to our platform,” Tidal spokeswoman Sade Ayodele said in an email.
Qobuz’s Mackta said, “It’s been a great opportunity for people to learn about our service…although it probably won’t be in the news for very long.”
Qobuz subscriptions start at $10.83 per month for access to over 70 million songs, many in high resolution. The streamer also sells music downloads.
Spotify entered into a multi-year podcast deal with Rogan in May 2020. “The Joe Rogan Experience” was the most streamed podcast on Spotify last year. It’s part of several other exclusive podcast deals Spotify has signed, including with Barack and Michelle Obama’s production company, Higher Ground, and with influencers like Lele Pons.
But some believe the Rogan blowback could cause Spotify to rethink some of those high-priced deals. If controversial podcasts were widely available on multiple platforms, any protests would target the podcast creator’s content rather than a single streaming platform.
“Other controversial podcasts that aren’t exclusive and widely distributed across platforms haven’t been met with the same cancellation by Neil Young, despite very similar messages,” Morris said.
For now, Spotify has tried to calm the situation by posting its content moderation policies and adding COVID-19 advice labels to some of its podcasts.
It was a welcome development for John P. Moore, professor of microbiology and immunology at Weill Cornell Medicine, who was one of more than 200 signatories to an open letter asking Spotify to post a misinformation policy.
“Spotify responded to pressure from its user community and at least did something,” Moore said. “Something is more than I expected them to do.”
It was also seen as a positive move by the Biden administration, whose officials have urged digital platforms to do more to combat potentially harmful misinformation about COVID-19 and related treatments on their services.
“We want each platform to continue to do more to expose misinformation and disinformation while providing accurate information,” White House press secretary Jen Psaki said Wednesday. “At the end of the day, our view is that it’s a good step, it’s a positive step, but there’s more that can be done.”