Feb. 24, 2022

Why Spotify Chose Joe Rogan Over Neil Young

The business of audio streaming, and why podcasts matter

Streaming now accounts for 84% of music revenue, according to a report from RIAA. Scott and Nora dive into the business of audio streaming with George Howard, associate professor of music business/management at Berklee College of Music, who details how music streaming services make money from music, how artists are (and aren't) profiting. Then, a look at how podcasts fit into the equation with Ashley Carman, senior reporter at The Verge and lead writer for Hot Pod.

Hosts: Nora Ali & Scott Rogowsky
Producer: Bella Hutchins
Production, Mixing & Sound Design: Daniel Markus
Music: Daniel Markus & Breakmaster Cylinder
Senior Producer: Katherine Milsop
Director of Audio: Alan Haburchak
VP, Head of Multimedia: Sarah Singer

Full episode transcript below.


Ashley Carman: Our eyes are accounted for at this point. If we're not doing something at work on a screen, we're watching Netflix. If we're not watching Netflix, we're on TikTok. If we're not on TikTok, we're playing a video game. Like our eyes are accounted for. So I think these tech companies see an opportunity where they're like, "Okay, if everybody's eyes are already busy doing other things, where can we fit into their life in other ways?" And that's through your ears. And so they're competing now for the ear attention rather than your screen time.

Nora Ali: From Morning Brew, this is Business Casual, the podcast that reveals the unexpected business story behind everything. I'm Nora Ali.

Scott Rogowsky: And I'm Scott Rogowsky. Nora and I are here for your ears, bringing you conversations with creator, thinkers, and innovators who can tell us what it all means, and why we should care. Now let's get down to business.

Nora Ali: Scott, I have a question for you because we got a little nostalgic in this conversation. We brought up Napster, music "streaming" of the olden days. So I was thinking about my first albums that I legally purchased. But I want to ask you first, do you remember what your very first album one was that you ever had?

Scott Rogowsky:

I have distinct memories of my first cassette. I go back to the cassette era, just at the cusp of cassette to switching to CDs.

Nora Ali: You do, you do.

Scott Rogowsky: And my first cassette tape was Alanis, Jagged Little Pill.

Nora Ali: Wow. Well, your music tastes are vastly cooler than mine. My first cassette tape was the soundtrack of Aladdin.

Scott Rogowsky: Oh.

Nora Ali: Of course, I listened to that on repeat. I also remember consuming music on those little MP3s that you would get in your Happy Meal at McDonald's. Do you remember that? It'd be one song. I remember, “It's Gonna Be Me” by NSYNC. It comes with a little earbud and all it plays is the one song in this little piece of hardware.

Scott Rogowsky: Really?

Nora Ali: Yes. How times have changed?

Scott Rogowsky:

It's gonna be me. I was not a big McDonald's guy back then, so-

Nora Ali: Okay. Well, I was.

Scott Rogowsky: How about the Zune, did you have a Zune? 

Nora Ali: No. What is a Zune?

Scott Rogowsky: The Microsoft Zune, that was the iPod competitors. 

Nora Ali: Oh. No.

Scott Rogowsky: No, neither did I.

Nora Ali: Nope. No, thank you.

Scott Rogowsky: That's at the Museum of Civilization now.

Nora Ali: So, Scott, it is safe to say that it was a little bit more challenging to acquire music when we were growing up, but now it's at the edge of our fingertips and it's so easy to consume music and podcasts wherever and whenever we want. And that's what we got into. We got into that and the business models behind it. We are breaking down the business of audio streaming, from music all the way to podcasts. And first, we'll hear from George Howard, who is a former music industry executive and is currently an associate professor of music, business and management at Berklee College of Music. And then we're going to hear from Ashley Carman, who is a senior reporter at The Verge and lead writer for Hot Pod, covering the podcasting and audio industry. So first up, here's our conversation with George Howard. George, let's start with some context on the streaming industry overall before we get into all the Spotify specifics. So Spotify first really came onto the scene in 2006. So can you set the scene for us? What was the state of music streaming at the time? Where were people going to both legally and illegally stream their music?

George Howard: Spotify launched in the States in actually in 2011. It launched in Sweden and other territories in 2006. And that's an important detail because the reason Spotify didn't launch in the States is that licensing of music over here is arguably a more challenging thing to do because in other parts of the world, you can get what's known as compulsory licenses, where content holders can't not give you their rights. Whereas the States, it has to be a negotiated license. So Napster launched in 1999 and then right around there is also the Diamond Rio player, which pre-dated the iPod. And I have this thesis, I don't know if it's terribly unique, but new paradigms emerge when you've got kind of cognitive dissonance where something is not being satisfied, and then you get technological innovation. So the cognitive dissonance that was going on at that time that led to things like Napster and to Spotify eventually was that we had been consuming music in kind of the same manner for the last 70 years leading up to that part. The whole notion of streaming really didn't emerge kind of until Napster. And Napster was a really significant player. I think history will view Napster not just as a disruptive force with respect to the music industry, but if you think of it and particularly in today's kind of language, it was the first decentralized social network. It was running on nodes. Those nodes were college kids with computers. And the cognitive dissonance was, because of a lot of market forces, we had reduced the perceived value of music down to kind of next to nothing. And then music got digitized. And when anything becomes digitized, it becomes information and humans want to share information. So it was very, very natural for college students to be like... They didn't view it as stealing. They didn't view it as anything other than this music is like a shorthand of my personality, and I want to get it and I want to collect it. And Napster made that really easy and very, very natural. It can be said that Spotify is really a legalized, centralized version of Napster, if you think about it. Napster was like, "Here's all the music that you want, but it's decentralized." And it was, at the time, arguably infringing upon copyrights. Spotify figured out... And this was really Daniel Ek's brilliance, and I'm not a Daniel Ek fan, but his brilliance was, let's just legalize it and centralize it. And he did that first in the UK, in Europe. And the States is like, "Well, I want that too. And all we have right now is Napster and LimeWire and Grokster, and those were not great user experiences." When Spotify comes into the States in 2011, it was embedded in people's Facebook sidebar. So you would see what your friends were listening to, and that created the most amazing network effect marketing where it's like, "Well, I want to listen to that, Too." And that's what really spurred their growth. Now over time, just as Facebook did with like Farmville and other things, they booted them off. But 2011, that's what set the stage. And that was kind of the history leading up to it.

Scott Rogowsky: Can you walk us through how Spotify went about taking this illegal gray market, Napster situation and putting the professional polish on it and getting labels to buy in?

George Howard: The way that Spotify kind of legalized Napster can be summed up in one word: equity. When they came to the States, they essentially said, "Look, we'll give you a piece of the company and we're going to kind of pay you whatever you want." And this is what really screwed things up for artists, because now you've got the labels and Spotify in this codependent relationship, but there's been this massive wealth transfer where they've been able to take money from one pool and transfer it to others. So the labels all wound up when Spotify IPO'd with another billion or so dollars on their balance sheet because of their equity. In addition to the firehose of money that the labels receive, because they get the massive amounts of royalties from these streams, it does not distribute it all evenly or equally to individual artists, independent artists, etcetera. So a lot of my bias against Spotify is that it is very much a mutually dependent relationship where the major labels and Spotify are this kind of cabal, they mutually share the wealth, but that never finds its way down to the individual artist level.

Nora Ali: Yeah. Can we take a step back and in just very basic terms, what is the relationship and flow of money between record labels, artists and streaming platforms? Who gets what, and at what point?

George Howard: Sure. So the way it works with Spotify is, Spotify doesn't pay on what's known as a listener-centric model. So in other words, Nora, like if you listened to the Meat Puppets all day long, the Meat Puppets would never see any money from you listening. They're not sitting there going, "Okay, Nora just listened to Up on the Sun five million times." Right? They don't do it that way. They look at market share and they go, "Okay, what percentage of catalog from Sony, Warner, Universal is being listened to by the whole schlemiel of people? And they kind of prorate it that way. They don't have to do it that way. If you look at Deezer or SoundCloud, they do it on a listener-centric model. So they pay out based on what people are actually listening to. But so the fundamentals are, Spotify collects money from subscribers and ad revenue. Those are their two top line ways that the money comes in. They then have this kind of Byzantine formula that I kind of described about market share, et cetera, and they distribute the money out to their two different streams of money. One goes to the people that hold what's known as the sound recording. So that would be the label and the performers, so that money goes to the label. The label then takes the money in. They recoup whatever money that they've paid out on behalf of the artist for marketing, etcetera. And then whatever is left over, flows to the artist at roughly 10 to 15 cents on the dollar, brought it. The other side of the equation goes to the songwriter. So when Dolly Parton wrote, I Will Always Love You, and then Whitney Houston recorded it. When the Whitney Houston version is streamed by Nora, in theory, some money goes to Arista Records for the sound recording and some money goes to Dolly Parton, who is the writer of the song. And Spotify, for many years, just kind of abjectly refused to pay songwriters. They're just like, "Yeah, no." So there were many, many lawsuits that made Spotify start paying. But then there was this legislation called the Music Modernization Act and it made it impossible for songwriters to now sue Spotify for nonpayment. And that was because, again, the labels are in this codependent relationship and they can't afford for Spotify to go down.

Scott Rogowsky: Well, let's take a quick break with George Howard. When we come back, we're talking about the future of music streaming.

Nora Ali: I'm so interested in the evolution of record labels. I wonder, has the value of record labels changed at all?

George Howard: There hasn't been any.

Nora Ali: That's what I mean. At this point, artists perhaps can be, in the near future at least, less reliant on the labels because it's in some ways easier to get organically discovered on social platforms, on TikTok, or find distribution directly via streamers. What is the future for record labels? Is it going to change, do you think, their value?

George Howard: The major record labels have never been fatter and happier. Bear in mind, the record labels and the music industry generally innovates just slower than the Amish, right? And they do that because they don't need to, they own all the intellectual property going back forever. And so they have this massive firehose of money. So the evolution, the innovation never takes place at the incumbent level, the major label level. It always takes place on the margin and from the marginalized. What I'm excited about now is, going back to my kind of cognitive dissonance line and what's happened with Joe Rogan, a lot of this other stuff, there are people now really going, "I'm not sure I'm cool with this as a consumer, as an artist, etcetera." And the artists haven't had a lot of alternatives, but substitutes and alternatives always emerge when you have that cognitive dissonance in new technologies. So the new labels will be very, very focused on Web3, like blockchain, etcetera. And the new labels will work to have a much more symbiotic relationship with their artists and their consumers. But the major labels don't need to do that because they could have some dude on a skateboard drinking Ocean Spray and singing along to Fleetwood Mac's “Dreams,” and then just reap the windfall of money that comes in, that they did zero to do. I mean, what did they do for that? They just owned the IP. And there's a growing kind of movement, this doesn't make any sense. And right, their contracts have not evolved, their means of promotion have not evolved. Why? They've had no economic imperative to do so, but that opens up a space for those that do.

Nora Ali: I want to get your take on what would be a net positive then? Because you talked about this notion of cognitive dissonance, there is a need to improve on the industry overall. And it feels like the music industry is often ahead of other industries and testing out emerging tech and testing out new business models. So you alluded to Web3 and blockchain, and all of that. Why is it important for artists to pay attention to that kind of emerging tech and what do you think can be done now with blockchain technology?

George Howard: The first thing that you need to understand is that a fundamental element of Web3 is transparency. Like that you can, if you so choose, make your transactions transparent. One of the fundamental kind of misalignments is the incumbents, whether they're publishers, labels, streamers, or whatever, have a very kind of antithetical relationship to transparency. In other words, much of their business model predicated on obfuscation. And so if you go to them and say, "We have this new technology that will allow you to have permanent records, that will allow for people to see the number of actual transactions they have", their bias is going to be, "But we don't want those things." Much of the record industry is kind of riddled with what I would call rent speakers or free riders. And these are intermediaries that kind of sit between the creator of the art and the consumer of the art, and they extract value along the value chain. And it occurred to me at some point ago that many of those were non-value additive. So I created a project a few months ago called The Song That Owns Itself, which is a song where we transferred the rights of the IP into the central, like an LLC agreement that's baked onto a blockchain, so you don't have any human intervention. And then we were able to measure where value was being created to give the song what it wants. And you might ask, "Well, what does the song want?" Well, song wants to be heard, but a song wants to be heard by the people that are predisposed to tell their friends about something they discover. If you think about your favorite artist, Nora, or your favorite artist, Scott, or your favorite book, or your favorite restaurant, 99% of the time it came from a friend. And in business speak, we call that Net Promoter Score. Bands, brands, etcetera, who have high Net Promoter Score almost always win. And the great myth of modern day marketing is that marketers, whether that's Netflix or what have you, are able to kind of inform you of what you want. It's just not true. What informs you is your friends telling you that. And what Web3 allows us to do is to create incentives around that, so those people who are predisposed to care and like something and share something can, a, be found and then, b, be incentivized, not in a monetary way but through some type of token, etcetera, that gives them access to more of what they want. So the new and emerging models will absolutely make hay with that. I'll give you an example, right now you both probably pay between five and $15 a month for Spotify. And as part of what you pay for, you have the wonderful opportunity to curate playlists for Spotify. Somehow they have tricked you into paying you to do the work for them. They take the curation that you do with your playlist, scrape the data and then spit it back out. We need to completely jujitsu that, and we now have the tools to do that with Web3. Now, the major labels, the Spotifys as it were, they'll be fine. They will reap the benefits of this, but it does open up a space for innovators to kind of do this before they even figure out what's going on.

Nora Ali: Well, George, thank you so much for joining us on the show. George Howard is an associate professor of music, business, and management at Berklee College of Music. He's also the author of the book, Everything in Its Right Place: How Blockchain Technology Will Lead to a More Transparent Music Industry.

Scott Rogowsky: We're going to take another quick break. When we come back, we'll hear from Ashley Carman, the author of Hot Pod, a podcasting newsletter from The Verge. Ashley Carman, welcome to the show. To start us off, I want to ask an obvious seeming question to get our bearings as we talk about the economics of audio streaming: How do podcasts make money?

Ashley Carman: So podcasts make money by selling ads typically. So host-read ads are typically what do we think of a podcast, like those promo codes, MailChimp, vanity URLs. Increasingly, we're starting to see more automatically inserted ads, like Bank of America or something randomly being inserted. And then the newer thing is subscription, so like Patreons.

Nora Ali: So going back to the advertising revenue streams, you had mentioned MailChimp. We have all these brands in our heads that we're so used to hearing on podcasts and advertisers inserting themselves into the podcast. But you reported recently that there's been a big shift in the industry. The companies like MailChimp, Casper, cetera, are getting priced out or pushed out by some of the bigger brands, like a Capital One or an Amazon, who can spend more on advertising. What does that mean for podcasters? What does that mean for the industry?

Ashley Carman: To understand that we have to take a little bit of a step back and talk about what's happening in podcast land, which is all these big tech companies, Spotify, Amazon, Apple, even Facebook now, are starting to care about podcasts. And Amazon and Spotify more specifically have made really major investments, like spending millions of dollars to sign deals with podcasters, acquire companies, make moves in the space. So naturally, when you spend a ton of money in your business, your investors, your stockholders are going to say, "When are we making that money back? And when are we going to make more on top of it?" And so the answer to that question is, well, we need to start selling a lot more ads for a lot more shows. And the best way to do that is not to go to the host directly and say, "Hey, you seem like a cool person. Why don't you sleep on our Casper mattress, try it out, and do a little read for us?" Instead, it's more of these at-scale brand advertisers, like the Banks of America, Amazon, whoever else. They just care about brand awareness. So they just want you to hear their name, maybe think of them every so often, maybe go check them out. And so that's how they're really trying to scale these advertising platforms, and it's just a lot easier to automatically insert them. And so it just changes the way that podcasters might think about their relationship to advertisers is not so person-to-person, and instead is more like machine.

Nora Ali: It feels like these smaller advertisers would be suffering as a result, because they're not getting that hands-on relationship with the podcaster, maybe the ads that get read aren't that targeted or specifically targeted to the listeners. So this sounds like it's bad, right, for the smaller brands?

Ashley Carman: It sort of depends. The reason the advertisers really like the traditional way of doing things is because if you or Scott vouch for a product, even if you're not really vouching for it but you're reading an ad, like I, as a listener, might really trust you and think that, "Yeah, I should try out this brand. I'm going to buy it." But for the podcasters themselves, maybe it's easier to actually just have ads automatically inserted, like what happens on YouTube. If you're a small creator, it's probably hard to get those brand deals. But if Spotify could just automatically insert ads into your show, for example, and you can make five bucks even, you're going to feel pretty good. So it's kind of a trade-off, but you can see both sides of it for sure. A lot of people have strong opinions on both sides.

Scott Rogowsky: Interesting. So you're saying it comes down to making more money, you say?

Ashley Carman: Always does.

Scott Rogowsky: Okay. Well, how about we take a step even further back. I like where we're going here. Nora and I are podcasters, so we're in it. I mean, I thought to myself back in 2009, podcasts were over, it's too late. My mom's like, "I heard about podcasts on the radio, you should get into this." I was like, "What are you talk about? Everyone's got a podcast already." I was wrong. Here we are in 2022, podcasts are still growing, growing, growing. But how many people are listening to podcasts versus playing video games, watching TV? Is it still the minority of consumption when it comes to media? Where does it fit into the larger media landscape?

Ashley Carman: It's definitely not on the level of streaming Netflix or something like that. Especially in different age groups, different backgrounds of people. There's just different consumption across the board, but it's definitely not like a majority are listening to multiple podcast a week and like, no. So there is still a ton of growth to happen as far as on the listener space. And you're kind of speaking to this idea that it feels like everybody has a podcast, which it does feel that way. But I think there's still a lot of room to actually appeal to whole new audiences that are barely... like, I would be curious if your mom listens to podcasts.

Scott Rogowsky: No.

Ashley Carman: Right.

Nora Ali: She listens to this one, hopefully.

Scott Rogowsky: I hope.

Ashley Carman: Well this could be her entry way to start finding other shows that she really enjoys. And so there's obviously a lot of opportunity there too.

Nora Ali: There is a lot of growth and that's probably why the big tech companies, the big banks, the big players are interested. What is your sense of why they are now pouring money into podcast more and more?

Ashley Carman: Some companies that kind of comes down to their business models. Like Spotify's always been a subscription company and in some extent an advertising company, but the thing is since they were always music, they had to pay royalties on the music. So every time you listen to music, they're losing money a little bit. Instead, when you listen to a podcast and specifically a podcast that Spotify licenses or creates on its own, it makes money every single time you listen, because even if you're a premium subscriber, you're still going to hear ads. So, that's Spotify's ambitions. But the broader picture is that our eyes are counted for at this point. If we're not doing something at work on a screen, we're watching Netflix. If we're not watching Netflix, we're on TikTok. If we're not on TikTok, we're playing a video game. Like our eyes are accounted for. So I think these tech companies see an opportunity where they're like, "Okay, if everybody's eyes are already busy doing other things, where can we fit into their life in other ways?" And that's through your ears. And so they're competing now for the ear attention rather than your screen time.

Scott Rogowsky: Interesting. I didn't think about that, the fact that, yes, I'm a paying Spotify subscriber. So I'm paying to get my music ad free. But yes, every podcast I listen to still has those ads baked in, even though I'm paying that premium subscription. It's like a double dipping into the revenue pot. And with music, you can't insert an ad four minutes into "Bohemian Rhapsody." They're not going to start breaking up some of those songs.

Ashley Carman: Exactly.

Scott Rogowsky: So that's very interesting. I didn't think about that. So sounds like the podcasting industry is becoming more and more like commercial radio. Is that fair to say?

Ashley Carman: I think that's definitely a concern that lots of people in the industry have because radio actually makes a lot of money, but it's so filled with advertisements. And I think that's the concern is that, as these companies want to make their money back and make more money on top of it, the answer is to keep inserting more ads. So yeah, I think that's kind of where it's headed, but also a big concern for people as well.

Nora Ali: Let's dig into the Spotify situation a little bit more specifically. Obviously, the big deal everyone's talking about is their exclusive relationship with Joe Rogan, which the New York Times recently reported is now worth closer to $200 million versus the 100 million that was reported before that. So, put into context, how much of a game changer this exclusive deal was? Does this change how Spotify and other platforms are going to be approaching podcasters in the future?

Ashley Carman: Joe Rogan is the biggest podcaster in the game. He is widely considered the most popular podcast before he was even on Spotify. He never was on there until they made this deal with him. He was the number one searched for podcast, so people want to listen to him. And Spotify has said internally, leaked internal town hall, that basically the reason that they needed this deal was to have leverage over all these companies that issue hardware devices, so like Tesla, Amazon, Google, who maybe want you to listen to their own streaming platforms and want to forget Spotify. Now, Spotify can say, "Well, we have Rogan. So if you want to make your users happy, you're going to need us on your platform." So that is why they got into exclusives. That's how they ended up with Rogan. They needed a big fish because when you buy ads on Joe Rogan's podcast, you have to buy ads on the rest of Spotify's catalog. That's how they're starting to prop up their advertising machine. And so they really needed that person. As far as how it will affect the industry going forward, I mean, we've started to see there's tons of deals happening. Lots of podcasters are being signed to Amazon or they're signing monetization deals with other companies like Sirius XM. I think it does make the podcast industry seem like it's this massive place where there's riches to be had. But I think this is a very massive one-off huge deal that Spotify made.

Nora Ali: And for context, you had reported that prior to the $1 million cost of ads for Joe Rogan before this exclusive deal was something like tens of thousands of dollars. So the magnitudes have completely changed.

Ashley Carman: Yep.

Nora Ali: What will it take for streamers, podcast platforms to understand the value that this exclusive deal with Joe Rogan has brought to Spotify? Is there any risk to being so closely attached or tethered to one personality, or time will tell and we'll find out?

Ashley Carman: For sure. I mean, building a business around any one person... I don't own a company, but I'm just going to tell you that doesn't sound like a good idea. But I think Spotify's betting that they needed him to kind of launch all of this. And according to the Times, he's on a three and a half year contract, I believe. So, I think they assume, in three and a half years, we can get this thing running. Like, we can get more advertisers, we can get them hooked on our platform. We can get more listeners. We can become dominant in the next three and a half years while we have Rogan. And then, if he doesn't resign or whatever happens, well, we'll probably be okay without him, is how I would assume they're thinking about it.

Scott Rogowsky: And you recently reported on Spotify's acquisition of Podsights and Chartable, which amazingly you had predicted at the end of last year. I saw your Twitter thread there, that was pretty impressive. These are companies that are known for tracking pixels that allow marketers, advertisers, and podcasters to measure the success of their shows. What does this purchase mean for Spotify and the company's future goals?

Ashley Carman: Yeah. So these are super nerdy wonky companies that most people outside of podcasting probably haven't heard of or really think about. But again, it comes back to advertising because the broad goal for these tech companies is to get podcast advertising to look more like the web. So web ads, you're tracked all over the web. You looked at a vacuum in one tab and the next tab, all of a sudden, the ad for the vacuum shows up. You're on your phone, something you looked up in one place shows up in another place. Like, you're being tracked around the web and that's how ads are targeted to you. And that's what they want to happen in podcasting. So to be able to get advertisers to be down with this vision and spend more money in the space, they need to know that their ads are working, and promo codes and vanity URLs aren't really going to cut it for these big brands. Instead, they want to know who heard our ad? Did they do anything when they heard our ad? Did they come visit our website? Did they buy something? Also, is our marketing working for these shows? And that's what these companies allow Spotify to do. The broader picture is that this also gives more complete analytics, which I think is a way to compete with YouTube, who is also a competitor for Spotify right now.


Nora Ali: In addition to these new forms of revenue, new models, Spotify has said that they're super focused on creators. And Spotify CEO, Daniel Ek, even said that the company hopes to reach 50 million creators who are going to make money through the platform. What does that mean for Spotify and for creators? What do you think are going to be the tools that Spotify starts to offer? How are creators going to have more agency of their own monetization, which we learned in our previous conversation on music streaming, they don't actually get a lot of the cut when they're music gets streamed on the platform?

Ashley Carman: Yeah. And this is why I think Spotify's been making a lot of acquisitions. I think YouTube is what we should be looking at. So YouTube, for example, anyone can go upload a video. Even if you don't have that many viewers, you can kind of try to monetize your show. You can make a few bucks and you're going to feel really good. That's what Spotify wants to happen for audio. They want to make it super easy for you to make a podcast, super easy for you to click a box and have it monetized. They can insert those ads and you might make some money. And that's the ultimate goal here of what they're trying to achieve. So to get those creators on the platform, it needs to be a place where they know they can make money. They like the advertisers and trust the platform. They're surrounded by other content that they either agree with or feel like works with them. And yeah, broadly that they feel like they can actually build a business there because that's the key to beating out YouTube and becoming this great creator app that everyone wants to use.

Scott Rogowsky: Ashley, the number of podcasts on Spotify, I saw this chart, it went from I think 185,000 maybe back in 2018 to now 3.6 million today, or in the last year it's probably even growing. At what point do we reach saturation with this? Are there too many podcasts? How can we possibly listen to all this stuff? What do you make of that? I mean, I guess you compare to YouTube, but there are hundreds and hundreds of millions, if not billions, of videos out there. So is that what this is going to become? I mean, that's what Spotify wants, I assume, to get to that scale.

Ashley Carman: Yes, they want it to be huge. But one thing that has always been kind of unclear is, Spotify hasn't said how many of those shows regularly put out episodes. And I think that's a pretty key metric that they're not sharing, which is how many people pick up Anchor, which is an app they acquired to make it easier to make podcasts? Did it once during the pandemic, because they were bored. It's onSpotify, but they never picked it up again.

Scott Rogowsky: Right.

Ashley Carman: So according to Podnews, another podcasting newsletter, only 19% of Anchor-created shows had been updated in the past 90 days. And so I think that's something I'm always thinking about and curious about as well.

Scott Rogowsky: Wow. 19% in 90 days.

Nora Ali: You've also written about content moderation, with the higher volume of podcasts means more humans and/or algorithms who are listening to these podcasts to weed out anything that is harmful. What do we know or what don't we know about Spotify's attempts at moderation?

Ashley Carman: Spotify has truly, notoriously, not shared any information about really how they moderate. For example, we know Facebook uses third-parties and we know that those conditions for moderators on Facebook is pretty treacherous and can lead to PTSD. So we know what that is like, and we know what Facebook's doing and we know they want to try to automate it more. We have no clue what Spotify's up to. Are they making people listen to these shows? Are they using transcripts? Are they doing both? We have no idea. And up until this whole Joe Rogan saga recently, their rules about what was allowed on the platform were never even public. They only made them public recently. So on the moderation front, there's a lot of open questions.

Scott Rogowsky: I guess, finally, Ashley to wrap this up, what's the right move here for a consumer? George, our other guest, told us Napster pays out the highest percentage to artists. So as want to be ethical consumer of audio, what's your advice?

Ashley Carman: I think everyone has to decide for themselves truly. But I think the questions that people are weighing is, yeah, I guess there's the music component of this, so how they treat artists and if you want to be part of that. And the other component, as far as it relates to podcasts is, knowing Joe Rogan makes $200 million, do you think Spotify should let him kind of do whatever he wants? Or are you sort of like, "Well, I want to tell Spotify I don't agree with them spending their money that way. And therefore, I am going to not subscribe and listen there?"

Nora Ali: Ashley, thank you so much for joining us on Business Casual. Ashley is a senior reporter at The Verge. Thanks again, Ashley.

Ashley Carman: Thank you.

Scott Rogowsky: And now it's time for Quizness Casual, the Business Casual quiz. For today's quiz is all about the music biz and the news of the music industry. We're throwing it back to former record label executive and current professor at Berklee College of Music, George Howard, who's going to be working with Nora to answer my questions.

Nora Ali: It's a team event.

Scott Rogowsky: George, you can lean on Nora, but Nora might be leaning on George here.

Nora Ali: Yes.

Scott Rogowsky: We'll see what happens. Here we go, three questions are coming at you fast. Qumero numero uno about the music biz: Which of the following artists have not sold their entire songwriting catalog, Whitney Houston, David Byrne, Barry Manilow, or John Legend? One of these artists has not sold their entire catalog.

George Howard: Well, David Byrne hasn't.

Nora Ali: Well, he knows it. All right.

Scott Rogowsky: This is going to go fast.

Nora Ali: Good.

Scott Rogowsky: Yes, correct. The founding member of Talking Heads has not sold his catalog as of this recording.

Nora Ali: Boom.

Scott Rogowsky: He is very much against this streaming model. He has been very vocal about it. Okay. Question two: As of this recording, which of the following streaming platforms has the highest pay rate per stream, Apple, Amazon, Napster, Tidal?

George Howard: Napster.

Scott Rogowsky: Isn't it amazing, Napster. 

Nora Ali: You-

Scott Rogowsky: Napster's correct. Final question, we're steam rolling through this thing.

Nora Ali: Wow.

Scott Rogowsky: Nora's sitting in passenger seat.

Nora Ali: I'm here along for the ride.

Scott Rogowsky: Yeah, along for the ride. Here we go, final question. Which artist or band played their first concert in the Metaverse on Super Bowl Sunday: Foo Fighters, Justin Bieber, Smash Mouth, or Ariana Grande?

George Howard: You're going to have to tell me, Nora. I didn't watch the Super Bowl, the stupid bowl. I don't even... you know what I mean? Like I know I'm supposed to pay attention to that stuff, but I-

Nora Ali: Wait, this Super Bowl or previous-

Scott Rogowsky: This one. Just a couple-

Nora Ali: This Super Bowl, like as of this recording last weekend?

Scott Rogowsky: This past Super Bowl.

Nora Ali: Yes.

Scott Rogowsky: Right.

Nora Ali: Can you say the options again real quick?

Scott Rogowsky: It was Foo Fighters, Justin Bieber, Smash Mouth, or Ariana Grande.

Nora Ali: I'm going to go with Foo Fighters for no particular reason.

Scott Rogowsky: The Foos?

Nora Ali: The Foos.

Scott Rogowsky: You're going to go for it?

Nora Ali: Yes, I'm going for it.

Scott Rogowsky: All right. Yes, Foo Fighters played a concert in the Metaverse, 10-song, 46-minute set viewable on the band's Facebook and Instagram pages.

Nora Ali: Yes? Oh my gosh.

Scott Rogowsky: Well, there you have it, music in the Metaverse. George, it's coming.

Nora Ali: Yes.

Scott Rogowsky: Get ready for it.

George Howard: Yeah.

Scott Rogowsky: I want to see Alex Chilton's metaverse avatar.

Nora Ali: It's here. Yeah.

Scott Rogowsky: That's the beauty, we could bring Chilton back. We can bring him back on the Metaverse.

George Howard: Scott, between you and me, we probably could, to be honest. So you let me know. I'd love to work with you and Nora on it.

Scott Rogowsky: All right. We love hearing from our Business Casual listeners. So please hit us up because we just said, we love hearing from you. And we can't hear from you if you don't speak to us. We're working on an upcoming episode about influencers and we want to hear your thoughts about them. Do you like the whole influencer thing? Who are your favorite social media influencers? Do you like the term influencer? I kind of hate it. But who should we talk to? We're going to take our cues from you. Influence us as we put this next episode together. Send us an email at businesscasual@morningbrew.com or DM us on Twitter @bizcasual pod. That's B-I-Zcasualpod.

Nora Ali: You can also leave us a voice memo on our website, businesscasual.fm. Or, give us a ring, leave us an old fashioned voicemail. Our number is 862-2951-135. And as Business Casual grows, we are excited to get to know our listeners, old and new, drop us a line. And don't forget to leave your name and where you're calling or writing from, so we can hear from you in a future episode.

Scott Rogowsky: Business Casual is produced by Katherine Milsop and Bella Hutchins, additional production sound design and mixing by Daniel Markus. Alan Haburchak is director of audio of Morning Brew and Sarah Singer's our VP of multimedia. Music in this episode from Daniel Markus and the Mysterious Breakmaster Cylinder. If you like what you heard, please follow Business Casual on that podcasting platform we just talked about, or Apple Podcasts, or wherever you go for ea candy. And we'd love it if you give us a great rating and a review.

Nora Ali: Thanks for listening to Business Casual. I'm Nora Ali.

Scott Rogowsky: And I'm Joe Rogan.

Nora Ali: Keep it business.

Scott Rogowsky: And keep it casual.