Spotify Shares Off 18% As Demand For Neil Young Music Surges
Spotify who thought it was okay to let a podcaster spout off about COVID vaccinations, despite the detrimental effect on people’s health, is now paying a price with the streaming platforms shares falling 18% after it was revealed that subscriber numbers are falling.
Late last week singer Neil Young along with Canadian music legend Joni Mitchell pulled the plug on Spotify because of the comments of controversial podcaster Joe Rogan.
Demand for their content is surging on competitors streaming services such as Apple and Amazon Music.
One of the men who helped build the Spotify platform former chief economist Will Page, has run the ruler over demand for young’s songs and unearthed the surprising finding: streams are up 50 per cent since the Canadian-born performer made Spotify choose between him and Joe Rogan.
While Spotify agreed to take down his music as well as that of his contemporary Joni Mitchell, who followed Young out the door, both artists can still be accessed on the site.
It now appears that Young has profited handsomely from his decision to dump Spotify.
Last night company’s shares fell as much as 18% in late trading after Spotify reported a fall in subscriber numbers.
The outlook overshadowed fourth-quarter revenue, which came in higher than analysts’ estimates, as the music streaming company sold more advertisements and newer services such as podcasts, while recording a healthy 16% increase in paid subscribers for its premium service.
It was the free and general subscribers who deserted the platform.
The company, forecast current quarter paid subscribers of 183 million, below expectations of 184 million.
Revenue is expected to meet estimates of 2.60 billion euros.
Spotify said that they will longer offer annual guidance on subscribers.
The subscription music streaming service has invested over a $1 billion in the podcasting business, led by marquee exclusive shows such as The Joe Rogan Experience.
But the allure of the podcast star also drew condemnation after his show aired controversial views around COVID-19, drawing protests from artists Neil Young and Joni Mitchell.
Rogan, a popular internet commentator, has since apologized and Spotify said it would start adding content advisories to episodes discussing COVID.
Spotify ventured into podcasts in 2018 with a series of acquisitions to compete with Apple.
Since then, it has launched a paid subscription platform for podcasters in the US, opened it up for advertising, and became the largest podcaster dethroning Apple.
Unlike the music business, which is largely commoditized and low margin as it pays out a part of the revenue to the rights holders, podcasts engage listeners for hours on end, creating valuable advertising inventory that has underpinned the optimism by Wall Street over its long-term future.