With Joe Rogan signing an exclusive deal with Spotify, both Ben Thompson and Jon Gruber mentioned Howard Stern in their analysis.
Gruber, assuming Joe Rogan was making between $64mm-$240mm per year from his podcast wrote –
However much Howard Stern was getting underpaid by Sirius six months ago, it’s even more so now.
Since Joe Rogan’s multi-year deal with Spotify is being estimated in the ~$100mm range, the $64mm-$240mm estimate is most likely inflated.
Howard Stern’s deal with Sirius has long been estimated to be $100mm per year. Howard will get more in his next contract but to call him underpaid is an exaggeration. He is the highest-paid radio/podcast broadcaster in the world, by a large margin.
Ben Thompson wrote –
Lots of folks have drawn a comparison between Spotify’s deal with Rogan and the one Sirius made with Howard Stern back in the 2000s. The latter, though, required Stern fans to actually buy hardware and pay for a subscription service; it’s a testament to Stern’s popularity that this actually worked, and also a great sign for Spotify. After all, the company isn’t asking Rogan fans to buy a new phone, or even pay any money at all: the fact Spotify’s goal is first and foremost advertising means the cost imposed on users is simply switching to an app they have probably already downloaded.
It is Luminary that is a better analogy to Sirius: no, you didn’t need new hardware, but you did need to download a new app and pay money; without a singular star like Stern, the idea was doomed from the beginning (in fact, even with, say, Rogan, Luminary would have still had no chance: Rogan, unlike Stern in 2004, could already go direct to consumers, which would have given him leverage to take all of Luminary’s profits, were they ever to exist). I’m honestly baffled the company managed to raise more money no matter the terms.
Ben highlights that Howard has been a success with Sirius despite the incredible uphill battle of friction his listeners endured. This is why Howard is, and will continue to be, the highest paid broadcaster in the world.
The question is, where does Howard go at the end of the year when his contract is up?
Howard’s options are –
- Retire
- Go independent
- Go to Apple
- Go to Spotify
- Stay at Sirius
Does he retire? No. Howard’s price will be as high as ever, he’s in good health, and he’s good at what he does.
Will he create an independent podcast? Although he’s in good health, he’s 66yo. He’s scaled back his show to 100 a year. It’s unlikely Howard wants to take on the overhead of hiring staff, building studios, and selling ads.
Will he go to Apple? Apple is slowly but surely losing market share of podcast control to Spotify. An exclusive deal with Apple, which is a paid-only service, makes sense for both parties and get Howard a tremendous payday. Howard does not live a lavish lifestyle but he is competitive and views being paid the highest as validation that he is the best broadcaster alive.
Will he to go Spotify? Although Howard increased his pay, he lost total listeners when he went from radio to Sirius, which has a paid-only model. What’s appealing about this option to Howard is that he can get the payday he deserves while expanding his reach through Spotify’s free tier, increasing his relevance.
Howard would not want to go exactly the Joe Rogan route. Howard would want to be a Spotify employee and have Spotify build and maintain his studios, pay his staff, and sell his ads. Spotify has an advantage over Apple, having a major office in NYC, Howard’s home.
Finally, Howard may choose to stay at Sirius. Sirius has proven they are valuable partners to Howard and can continue to make him the highest-paid broadcaster in the world. They won’t be able to match an offer from Apple or Spotify but will they offer him enough that moving to another employer isn’t worth it? Howard has been with them for 15 years, he has his studio, his staff, and his show is running like a fine-tuned machine.
At 66yo, I expect him to stick with the familiar and stay at Sirius. But I hope he goes to Apple or Spotify.