Market News

Spotify Surges 8.4%, Joe Rogan Brings More Than Experience Says Top Analyst

Spotify (SPOT) closed 8.4% higher on Tuesday after announcing a multi-year exclusive licensing deal for The Joe Rogan Experience, which it calls ‘one of the most popular podcasts in the world.’

The Wall Street Journal reports that the deal was worth over $100 million, according to a person familiar with the matter.  

“The talk series has long been the most-searched-for podcast on Spotify and is the leading show on practically every other podcasting platform. And, like all podcasts and vodcasts on Spotify, it will remain free and accessible to all Spotify users” SPOT stated on May 19.

Indeed, Rogan’s podcast was downloaded a jaw-dropping 190 million times per month last year.

In addition to the podcast format, The Joe Rogan Experience (JRE) also produces corresponding video episodes, which will be available on Spotify as in-app vodcasts. 

While Spotify will become the exclusive distributor of the show, Rogan will maintain full creative control, Spotify said.

The full 11-year library of JRE will be released on Spotify on September 1 2020, and become exclusively available on the platform later this year.

According to top Rosenblatt analyst Mark Zgutowicz the agreement “substantially raises Spotify’s global podcast brand.”

JRE scenario analysis suggests a reasonable path to +3% ‘21E revenue contribution, says Zgutowicz, adding that “longer-term halo effects are likely more substantial including leverage with additional high profile deals, and subsequent engagement momentum, inching closer to label (podcast) leverage perhaps sooner than later.”

He has a buy rating on the stock and $190 price target. Overall SPOT shows a cautiously optimistic Moderate Buy consensus and $171 average analyst price target (2% downside potential). Shares are currently trading up 17% on a year-to-date basis. (See SPOT stock analysis on TipRanks).

In 2019, Spotify spent roughly $400 million to $500 million snapping up podcast rights- with CEO Daniel Ek saying the deals will “help accelerate our goal of becoming the world’s number one audio platform.” 

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