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Spotify, a leader in music-streaming services, has rapidly grown its podcasting category through acquisitions and multi-million dollar deals with big names like Joe Rogan. But recently, the oft-off-the-cuff Spotify-exclusive podcast caused a stir with paying customers, health care professionals and, most recently, Canadian-American singer-songwriter Neil Young.
While, for the most part, Spotify has managed to keep its distance from negative press, Young has just become the first artist to ditch the platform—and he might not be the only one to do so—causing investors to question whether or not the backlash will burden business and, ultimately, increasing investor curiosity about alternative streaming services.
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Rogan’s podcast is coming under fire for allegedly spreading misinformation about the COVID-19 vaccine. Already, over 270 doctors and physicians have signed an open letter asking Spotify to remove the podcast from its platform.
“With an estimated 11 million listeners per episode, JRE, which is hosted exclusively on Spotify, is the world’s largest podcast and has tremendous influence,” reads the letter. “Spotify has a responsibility to mitigate the spread of misinformation on its platform, though the company presently has no misinformation policy.”
Young made moves in response to the controversy, sharing a now-deleted letter to his management team and record label, according to Rolling Stone.
“I want you to let Spotify know immediately TODAY that I want all my music off their platform… I am doing this because Spotify is spreading fake information about vaccines—potentially causing death to those who believe the disinformation being spread by them,” he reportedly wrote, according to Rolling Stone. “Please act on this immediately today and keep me informed of the time schedule.”
Young reportedly continued that Spotify could have him or Rogan, but “not both.” Pulling his music from the popular platform means that he’s expected to lose 60 percent of his streaming revenue, according to a post he shared on his website explaining his exit to fans and thanking them for their support.
After all, his most popular songs, including “Heart of Gold” and “Harvest Moon,” have attracted hundreds of millions of listens on Spotify. His other songs have attracted many more, as well. He’s been creating world-renowned music for decades.
Spotify swiftly responded to Young’s request, beginning to remove his music from the platform. In a statement on Wednesday, the company reportedly said: “We want all the world’s music and audio content to be available to Spotify users. With that comes great responsibility in balancing both safety for listeners and freedom for creators. We have detailed content policies in place and we’ve removed over 20,000 podcast episodes related to Covid since the start of the pandemic.”
Amid the controversy, investors are waiting and wondering whether or not Spotify stock will take a hit—especially if other artists follow suit.
“I sincerely hope that other artists and record companies will move off the Spotify platform and stop supporting Spotify’s deadly misinformation about COVID,” Young said in his post.
If they do, investors would be wise to keep tabs on their funds. Already, Spotify stock is a seemingly volatile one. In fact, it’s lost nearly 25 percent of its value at the start of 2022 already—and we’re only a month into the year. Meanwhile, it’s lost 45 percent throughout the past year.
Alternative competitors, like Apple Music and Amazon, may be worth looking into for investors.
While Apple’s value had indeed declined by more than 10 percent since it hit the $3 trillion market cap space earlier this year, only time will tell how it performs this quarter. The company’s push to subscription-based models across its services—from Apple Music to iCloud Storage—could be a key driver in its growth.
Apple Music’s projected Q1 earnings come as no surprise as Apple currently has more than 745 million paid subscribers across its portfolio of services. The tech giant announced the financial results for its fiscal 2022 first quarter, which culminated in December, posting an all-time record of $123.9 billion in revenue. That’s up 11 percent year over year. Meanwhile, Amazon is set to announce its earnings on February 3, 2022. In 2020, the service surpassed 55 million subscribers worldwide.
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