Social currency = future currency.
Joe Rogan got hosed. Big time.
Which seems comical to say given he earned $100-200M supposedly on the Spotify acquisition deal.
But hear me out for a minute, I see three trends coming at us like a freight train that will alter how creators earn and what we define as a “corporation.”
The Future of YOU
#1 Audience = Future Currency.
Cash may not be king in the future, your audience will be.
#2 Audience is an Annuity.
It is a cash-flowing asset. It continues to pay and unlike an annuity, as they only have one revenue stream, your audience has numerous.
#3 You-Corps.
The next wave of companies is and will be creators. We increasingly do not trust institutions so we increasingly may move towards trusting individuals. With the tech onslaught, why can’t the next group of Unicorns all be You-Corps. Aka You!
#4 WTF are NFTs
We’ll cover this in next week’s post. But if you aren’t tracking NFTs (non-fungible tokens) aka a way to buy digital things, track them and make sure they’re real. AND the fact that people are buying NFTs worth $MILLIONS.
Sometimes I struggle to explain exactly how important an audience is and will be going forward. Building in public and being public is scary for many. I understand that. I want you all to understand the value of an audience to build or sell just about anything. I want you to understand that the way the world worked in the past will not be the way it does in the future.
A power balance is slowly occurring and shifting, I wrote about how Platforms are Eating the World. I still think that’s true but with an unexpected twist.
We are firmly entrenched, and drilling deeper, into the Creator Economy.
Why The Creator Economy & You-Corps Will be the Future
We’ve talked at length about leverage and 21st-century leverage being audience paired with code. That trend is shaking out faster than I ever anticipated.
From Mr. Beast slanging cheeseburgers faster than Ronald McDonald.
To Bitcoin becoming worth $1Trillion with ZERO employees.
The future may look nothing like the current landscape in corporations. In fact, I think increasingly technology will enable me and you to become our own corporations.
What does this mean? It means KEEP CONTROL OF YOUR AUDIENCE.
Do not do what Joe Rogan did (even though $100M is pretty rad) which is to sell away his control and touch with the same people who created him. Let’s break it down.
Spotify Took Joe for a Ride
It will go down in my opinion as one of the worst deals in the podcast field. For Joe that is. For Spotify, they nailed it.
See that 15% increase in share price overnight on Spotify? That equals $4.93MB in market cap growth. So you buy out Joe for $100M a year or so and you get a $5 BILLION kicker…OVERNIGHT. That’s my kind of acquisition.
And of course, now the company is up to 2x their size during the Joe acquisition.
Why was Spotify up so much?
Do Wall Streeters just love them some Rogan? No. It’s because they saw what I saw and what I’m only now really starting to understand. The power of the audience, and how platforms can eat content creators for breakfast if you let them.
Joe Rogan’s Spotify Deal
I think Andrew Wilkinson has the best piece on why Joe should have told Spotify to pound sand. He summarizes it as:
Joe’s Deal Terms w/ Spotify
- Joe’s deal terms were $100Mish
- For exclusive rights to the podcast for a number of years. I’d guess 3-5.
- No more posting his podcasts via video on YouTube
Rogan’s Stat Sheet:
- 190 million downloads a month
- 8.42M viewers on YouTube
- Andrew estimated in his last post, Rogan was making around $64MM/year pre Spotify
So, the Spotify deal gets him 2-4x what he was making, and he probably gets a giant team and doesn’t have to run the business. More time for running around in the woods shooting animals with arrows. 🙂
Not bad, right?
Here’s why I think he did it.
- Pandemic hit and ads and sponsorships probably went down
- But more importantly, it’s this quote that Forbes said, “Getting users to pay directly for podcasts will continue to be a tough challenge, because—unlike music—people have no history of ever paying for them. Instead, we’re headed for a market with a choice of models, more like television.”
- $100MM sounds like a lot and if it’s only a “few years” what’s the big deal?
He was dead wrong.
Here’s why: Andrew lays it out perfectly. If Rogan would have stayed independent he’d have:
- Ad revenue
- Subscription revenue
- Youtube Ad revenue
- Kept control of his audience
So Rogan Could Have Had $100-300M A Year ALONE
But he’d also have a business that had incredible margins growing at mid to low double digits every single year.
Andrew compares Joe Rogan’s deal to Howard Stern. Oh, for you Gen Z’ers who have no idea about that crimped-haired hysterical lunatic he was the Joe Rogan before Joe Rogan. He single-handedly brought people onto Sirius radio. But now, he’s irrelevant. Why? Because in order to stay relevant you have to be where your audience IS RIGHT NOW.
Imagine the biggest influencer on Myspace. Who cares? The biggest on Facebook? Quickly moving to who cares?
The same story happened to Dave Chapelle, he sold his actual NAME, the Chapelle Show. and just now got it back. When you sell your rights to a platform, be ready to die with it.
But Will People Really Pay for Podcasts?
Come on friends, look at the history of the publishing industry of content in both tv and even more in print and newspapers. It’s not about licensing deals on content it’s about subscriptions for the users to consume the content.
Now I understand why users won’t pay any longer for music from one-off artists given the library of content on Spotify etc. But content, they pay without blinking.
Think about what you pay $1 month for:
- Upgrade to organic berries (cuz we fancy) at a difference of $1.50 a pint
- 2 hours of running your water heater and clothes dryer
- 2 days of having a refrigerator plugged in
- 12 hours of medium-speed wifi on 1024 GB/month plan
With this in mind, don’t you think Joe’s loyal listeners would pony up a sheckle (or two) to listen to his curated content multiple times a month?
We’ll be Like China.
What? A bunch of commies??! No easy bud. We’ll put podcasts behind paywalls just like they do. China is already there and podcasters are absolutely raking it in, to the tune of $3.8B.
That’s right. Podcast consumers pay almost $4 billion a year for the right to listen to their favorite podcasters. So in the future… We’ll have newsletters behind paywalls like they do, podcasts, and even videos on YT will have premium paywalls. Why? There’s a war going on.
Platforms vs Content Creators
- Platforms need content creators to grow – You go on Tik Tok to see what… CREATORS, doing weird dances with words scrolled over them and filters that make wrinkles see so 2008. You do not go on platforms if there are no creators.
- Platforms seem to like a quickie but not a marriage w/ content creators – This is why Facebook, Twitter, Instagram, LinkedIn change their algorithms constantly. They value and help creators up front because bring the money to the platform in the form of audience BUT they eventually make creators pay for up-voting their content. Platforms are smart, they make it fun and easy to start and then they begin the torture.
The Biggest Problem for Creators Today: Ignorance
They don’t yet know how to monetize fully. Case in point I have a friend with 1.4M followers. She makes $24k a year pimping out bikinis and tea. Not the brightest strategy.
Creators haven’t done the math. But let me tell you, they are about to figure it out.
Then watch how content changes.
Power to the people, to the You-Corp, and to the Creator Economy.
Question everything and be careful hitting the send button,
Codie
