Smacked Voodoo

4y

So he's mad he signed a bad contract and actually believed Spotify would do the right thing and give him money he wanted.

I really can't help but think of all those times Joe would pocket watch artists and roast them for their contracts. Telling artists to not trust these labels, brands, companies, etc because they'd never act in good faith.

Now here we are...

atthepyramids

4y

good points. this tweet comes to mind

Smacked Voodoo

4y

Yeah Spotify dumb as f*** in this situation, but at the same time, issa business. This is what they do. For Joe to believe they'd give him his proper due in a contract renegotiation when they were already able to get him for essentially pennies originally is very naïve of him.

safe

4y

Someone asked for this and I felt like it would be an interesting topic to cover. There’s not a lot of technical details here but I think I can hopefully give a good overview of what happened between the Joe Budden Podcast and Spotify.

We really have to start with Everyday Struggle. The show was a Complex Magazine regular Hip-Hop talk show and it started in April 2017. It originally featured DJ Akademiks, Nadeska Alexis and Joe Budden. The show took off almost immediately with episodes of the show garnering into the millions of views and becoming a staple in the culture. In December 2017, Joe Budden announced he would leave the show. At this point, the Joe Budden Podcast was successful but Everyday Struggle remained his main cultural impact in terms of discussion. In order to understand the Spotify deal we need to look at why he left Everyday Struggle.

Joe was the creator of Everyday Struggle. While it may have been the combination of himself and AK that led to a lot of its success, Budden ultimately was the creator. In December he wanted to negotiate a new contract. There’s a lot of rumors about this – one of which was that he wanted 4x the salary and 3-5% of Complex. Given Complex’s valuation in 2017 that’s around $7-10m along with whatever the salary was. Again we don’t know how true this was, but what is clear is that Budden wanted a lot more than he was getting.

Following the failed negotiations around Everyday Struggle, Budden tweeted the following:

The Joe Budden Podcast already existed but Everyday Struggle had given it a new life and his many fans flocked from Everyday Struggle into his podcast which became his main cultural impact. The podcast continued to grow throughout 2018. In his video on Spotify, Joe talks about how at this point in time, he realized that he was getting offered millions from a number of places. He was getting offered money by Viacom and Revolt and many more companies to work and produce content for them and this money was a lot. Despite this, at the time, his main time sink was the podcast. He realized that despite the podcast being the thing he spent the most time on, it was making him the least return. So, he started to look into monetization options. In August 2018, Spotify, Tidal and several other companies reached out enquiring about the podcast.

There’s obviously a limited amount of information out there about all of this so I’m largely going off Joe’s word here. He met with Spotify and they laid out their plan for podcasting and as he said, it aligned very closely with how he saw the industry in the future. He signed a 2-year deal with Spotify in August and said that at the time he knew they didn’t know how to value his brand. He wasn’t sure either and the Spotify deal would give him the opportunity to see how the market developed and to see what value he was bringing – part of the reason he chose Spotify was that he would be able to have people look at the a***ytics and value it. The deal was a licensing deal exclusively centered around the podcast – not allowing Spotify to cut into merch and the like. It didn’t require ad placements – something Budden is generally against – but it did allow Spotify to take a cut of the touring in exchange for promotion and assistance. Episodes would now happen twice weekly and Spotify would have them exclusively for a period before they became available on Youtube. Budden says at this point Apple had the marketshare but weren’t capitalizing – the vast majority of podcast listeners were just using the Apple Podcasts app. Spotify told Joe that if they could even cut into a few percent of the market share that would be incredible.

Spotify launched the Joe Budden Podcast in September 2018. It immediately topped their podcast charts. Budden says that from Day 1 it was incredibly apparent that they had been undervalued. This began the tension between Spotify and Joe. He viewed it as being a situation where, while he would honor the contract, he felt that Spotify from early stages should have renegotiated.

A few months later Spotify purchased two podcast networks, Gimlet and Anchor. The overall deal for the two companies was over $300m. Despite this, Joe Budden Podcast remained the top podcast on Spotify.

8 months into the deal, Spotify asked to renegotiate the contract. This was exactly what Budden had wanted. But the deal that Spotify offered was a 360 contract. He admitted it was plenty of money but it would allow Spotify to own the podcast and not just the podcast – it would allow them to take a cut of albums, of merchandise, of touring. Basically anything members of the Joe Budden podcast did, Spotify would take a cut. To Budden, this was disrespectful. He was undervalued from the start and the Gimlet and Anchor acquisitions were enormous but yet Spotify when trying to keep him on their service were still trying to screw him with a 360 contract.

King Joffrey

4y

I'm the one who asked for you to make this thread but what I wanted wasn't really a thread on Joe Budden, my interest lied on the massive investment on podcast media as of late:

• The billions invested and how they expect to recoup that.
• How Spotify strategy of ownership will influence the market and consequently The public experience(cause as JB said corporations move off of number and creators off of energy).
• The future of podcasting.

King Joffrey

4y

I'm the one who asked for you to make this thread but what I wanted wasn't really a thread on Joe Budden, my interest lied on the massive investment on podcast media as of late:

• The billions invested and how they expect to recoup that.
• How Spotify strategy of ownership will influence the market and consequently The public experience(cause as JB said corporations move off of number and creators off of energy).
• The future of podcasting.

BMZ

4y

get u sum p**** fam

safe

4y

Thanks for the advice fellow Kanye fan forum poster

BMZ

4y

exactly.

safe

4y

Man
We all post on a forum lmao I just put time into posts every now and then because I’m on a gap year and this stuff is a career interest for me so I’m doing the reading anyway
It’s cool tho if you’re not interested just tune out

safe

4y

@Maputo

This market share is what's so invaluable because right now that market share is up for grabs.

this is the market Spotify are trying to get on their platform. because in 10 years time, those people will have chosen their streaming service and guess what? people dont change services often. so right now Spotify want to capture as many people as they can while those people are still available because chances are that those people will stay with Spotify. that is what's worth the billions - not necessarily the actual podcasts.

you also asked about user experience and the future of podcasting. I think podcasting is the future of news. Facebook and other social media are under fire for fake news and regulations are likely coming. already tons of newspapers are moving into podcasting and news shows like The Daily are some of the most popular podcasts in the world. I think your average person nowadays will get their news from short 15 minute podcasts. its better than tv news because you can do it on your commute, its better than articles because its faster and you dont have to read and its better than social media cause its accurate and more detailed. this goes for all news too - Budden covers hip-hop news for example and the ringer covers sport and pop culture. all these review publications are dying too and podcasting seems like the answer.

I think the rest of podcasting is still up in the air. will there be ads run regularly to recoup some losses? maybe. or maybe the value of having no ads will entice users onto other platforms. thats what Joe talked a lot about - he wants podcasting to have a future thats focused on consumer experience rather than taxing the consumer at every step with ads and the like.

TLDR: Spotify is overpaying for podcasts in order to grab market share. thats what's valuable not the actual podcasts which can only be monetized with ads and the like. the future of podcasting is very bright and to me represents the future of print media companies like NY Times through to Pitchfork.

Larry Ishvalan Fox

4y

Hardest part though is turning those customers into 💰. I’m shocked Spotify hasn’t made everyone they bought exclusive and only for premium members already. I know rogan will be in December, but the ringer still isn’t. I feel like the longer they’re wait the less resistance people will be.

safe

4y

alright here we go

Spotify is in trouble

They are losing market share to Apple at a rate of around 0.3-0.5% per month. they already have less paying subscribers to Apple. Apple are doing this while also paying artists more per stream.

At the same time Spotify have only just become profitable. Therefore its vital that they find a way to maintain or pull back market share from Apple. The difficulty is that Apple already have deals with a lot of artists, they have music videos, they have lyrics etc. Theres not a lot of room for Spotify to offer an advantage to consumers in terms of music. But Spotify looked at the massive and growing podcast audience and decided that could be a point of difference.

not only are podcast audiences growing massively but they also represent the ideal consumer for Spotify - the type of consumer to pay for their service.

The issue here is that no-one really knows how podcasts work. THey're a whole different terrain. Someone can listen to your song for 3 minutes but if they're listening to your podcast they're listening for 2 hours. Podcasts are also typically free. So Spotify started out their venture into podcasting with Budden and underpaid him. This wasn't necessarily intentional - no-one just understood the value yet. The Budden podcast helped Spotify to get a better idea of the value they could bring and they used that to buy bigger fish like Joe Rogan and The Ringer.

You asked how they're gonna recoup those hundreds of millions. Well they aren't. Spotify unquestionably overpaid for these podcasts. Why? Because its all about market share. Streaming is still growing and podcasts are still growing. Spotify by getting some of the biggest podcasts exclusive to their platform is pulling marketshare away from Apple in both podcasts and music streaming.

safe

4y

I think Spotify at some point are gonna cut their free tier and that’s probably when a bunch will become premium only

They’ll be trying to find a way to turn all their free tier customers into premium subscribers though

safe

4y

alright here we go

Spotify is in trouble

They are losing market share to Apple at a rate of around 0.3-0.5% per month. they already have less paying subscribers to Apple. Apple are doing this while also paying artists more per stream.

At the same time Spotify have only just become profitable. Therefore its vital that they find a way to maintain or pull back market share from Apple. The difficulty is that Apple already have deals with a lot of artists, they have music videos, they have lyrics etc. Theres not a lot of room for Spotify to offer an advantage to consumers in terms of music. But Spotify looked at the massive and growing podcast audience and decided that could be a point of difference.

not only are podcast audiences growing massively but they also represent the ideal consumer for Spotify - the type of consumer to pay for their service.

The issue here is that no-one really knows how podcasts work. THey're a whole different terrain. Someone can listen to your song for 3 minutes but if they're listening to your podcast they're listening for 2 hours. Podcasts are also typically free. So Spotify started out their venture into podcasting with Budden and underpaid him. This wasn't necessarily intentional - no-one just understood the value yet. The Budden podcast helped Spotify to get a better idea of the value they could bring and they used that to buy bigger fish like Joe Rogan and The Ringer.

You asked how they're gonna recoup those hundreds of millions. Well they aren't. Spotify unquestionably overpaid for these podcasts. Why? Because its all about market share. Streaming is still growing and podcasts are still growing. Spotify by getting some of the biggest podcasts exclusive to their platform is pulling marketshare away from Apple in both podcasts and music streaming.

King Joffrey

4y

I think I got another one bro, what about a thread on the music industry circus:

• The gimmicks, how they create whole personas to make them appealing to certain demographics and potential deals with other brands.
• The making of industry plants and clones.
• Basically the BTS of tricks used by labels to make something seem organic.

Cause I think that most us take the music and art industry as whole close to the heart when it's in fact a business and taking in consideration how influential it is I think you should educate us on how to spot sellout techniques and maybe the effects on the mental health of not only the artist(who is actually the product).

safe

4y

I’ll definitely have a look
This thread has some stuff like that:
https://ktt2.com/billboard-charts-label-manipulation-safe-67073
Mostly around how labels manipulate the charts

The one issue will be whether there’s info about this online but maybe I’ll put some extra work in and email some people I know in the industry

King Joffrey

4y

I didn't know you were industry connected, I'm finna flex on my boys like: Trust me bro, I know somebody who is in the music business.

I already ate the charts thread n still go back from time to time, timeless.