What oil and gas can learn from Spotify
Targeted takedowns, similar to what the energy transition lobby has managed, can be pushed back on, but it takes guts (and a strong board)
When I first penned “The Great Shrug,” the concept was “Oil and gas will never win in the court of public opinion, it can only win in the courts.”
The narrative has been controlled, managed and curated to build support for rebuilding the entire energy complex and making trillions for the bankers and resource owners of intermittent energy. Consumers wouldn’t listen to the industry, no matter how loud they yelled and only letting prices crush them by “shrugging” production growth would counter the work the energy transition lobby had done. Gravity always wins, sometimes it just takes a little push.
Similarly, in the world of media, we are witnessing corporate activists (since there is no “environmental movement” to hide behind) attempt to destroy Joe Rogan in order to strengthen their own positions. If you want to go way down the rabbit hole, here is the whole piece from this week, and I won’t rehash today.
The biggest risk for Rogan was not his listeners. We all heard the shows, and tune in by the millions each week and the controversy now is directly from shows he’s released over the last 14 years.
It’s not from the polls “they” are commissioning to show that 19% of Spotify listeners “may cancel their subscription.” How many more will join just to hear what Joe has to say. Recall Tyrion Lannister said “When you tear out a man's tongue, you are not proving him a liar, you're only telling the world that you fear what he might say.”
Rogan himself would just move to his own platform and millions would follow, leaving Spotify out their $100 mm deal to get him there in the first place. So it was always about “What will Spotify do?” Yesterday, we found out and in so doing, perhaps they will be the light that shows the world is ready for a new path and is tired of the cancel culture. Perhaps Spotify will show that the path to quieting the small, but very vocal minority of activists, is to acknowledge the challenges but steadfastly maintain your position.
They have a tough job but if they can win the moderates with humility and true character, perhaps it is the global path to less polarization, more pragmatism and a happier, more inclusive world.
So today, we look at what we can learn from Daniel Ek, the CEO of Spotify, in his handling of the “Joe Rogan crisis.” Who knew that the Swede’s were so pragmatic, Greta and the Chefs from the muppets notwithstanding.
“Follow the money.”
Let me be clear: absolutely nothing is done without the profit motive as the driver. This is especially true in business and CNN has a problem, which means AT&T has a problem, since they spent $85 billion to buy Time Warner 3 years ago and have a $43 billion merger pending with Discovery to spin off their media group.
Since hiring Jeff Zucker in 2013, CNN pivoted (hard) from “the most trusted name in news” to an opinion/entertainment network. Their business model depends on eyeballs and the ability to sell ads. But Rogan is a huge threat to that business. Listeners tune in at 11 million per episode while CNN draws 600,000 per hour show. Their January ratings were down 90% year over year and so, it’s no coincidence that the Jeff Zucker relationship with Allison Gollust came out at exactly the same time as the war on Joe Rogan began. In Jeff’s world, Allison was to become the head of CNN and this, a continuation of the beatdown. In the new world, CNN needs a pivot and their biggest competition destroyed.
To that point, Rogan hasn’t been knocked out yet. I’m not convinced they can be successful, and lord knows I’ve gone into a political battle in my career, lost and got fired for the effort. But CNN has no choice and there is at least one more shoe to drop in the Rogan saga.
Their strategy, a proven one of late is to pull the “discredit bingo card.” It’s simple. First, you go after the “untrustworthy” box, COVID misinformation with help from the White House! Check!
Then amp up the stakes with the “racist” box, with an assist to UMG.
And coming soon will be coming with the “misogynist” box. You can check out the preview from 2020 at that link.
Of course, a power closer would be the “transphobic” box, but public sentiment against Lia Thomas competing as a woman definitely plays in Rogan’s favor (Here is the piece I wrote about Lia.) Bottom line, his comments about the MMA and unfairness of birth gender were as spot on then, as they are now.
Rogan has a trump card in the bingo game that Cuomo didn’t have. Rogan is the brand, unlike an Anderson Cooper who is more or less told what to say by CNN. They made him, they could destroy him. Rogan is uniquely positioned to handle this crisis. If you’ve seen the apologies, you will know that he’s so transparent and genuine, they resonate (unlike the old Tiger Woods).
Where Rogan had the biggest risk was the reaction of Spotify. Their employees had already caused a fuss when he moved over, and this crisis will clearly feed the woke beast. But for oil and gas, it offers an opportunity to learn as the situation has parallels with the “energy transition” narrative, let’s introduce the characters.
Joe Rogan: the production of fossil fuels, he represents all the CO2 emissions and therefore his “speech” is bad an must be phased out (canceled).
Spotify: the oil and gas industry, and in particular the Exxon’s, Chevron, Oxy and Pioneer’s of the world. I specifically exclude Shell and BP from this group.
Employees of Spotify: the investment community for oil and gas and specifically includes the group influencing the investors (pensions, LPs etc)
Media: the same with one notable difference. With climate change, they benefit from the flow of money into renewables. Michael Bloomberg as a perfect example. For COVID, they got better ratings which increased the amount they could charge for ads and companies like Google and Pfizer who benefited from COVID pay for ads. In the Spotify case, it’s much more personal for them because they are fighting for their corporate lives (and personal wealth and power).
This weekend, Spotify had a choice, as to how it would react to “the crisis.” The entire letter to employees (which was an open letter to the world, let’s be clear) is below and you must ignore all the headlines which mischaracterize the apology to employees. Here are the two key excerpts.
While I strongly condemn what Joe has said and I agree with his decision to remove past episodes from our platform, I realize some will want more. And I want to make one point very clear – I do not believe that silencing Joe is the answer.
Translation: we will not cancel things. If you don’t like it, stop buying it. Until then, F off.
The equivalent to this in oil and gas is as follows: We understand that the burning of fossil fuels emits CO2 and while extremely complex to model, there are links to rising temperatures and CO2. However, life expectancy of the planet has increased from 30 - 80 and energy is directly correlated to the wealth and standard of living of nations. We do not believe in direct subsidies as they disrupt and distort market signals for price and have led to huge volatility around the world as it has massively over invested in intermittents. We will continue to produce as long as there isn’t a viable alternative and we strongly support consumers choice to reduce their own consumption. We just make the stuff. YOU buy it.
The second brilliant piece from Spotify was this:
If we believe in having an open platform as a core value of the company, then we must also believe in elevating all types of creators, including those from underrepresented communities and a diversity of backgrounds. We’ve been doing a great deal of work in this area already but I think we can do even more. So I am committing to an incremental investment of $100 million for the licensing, development, and marketing of music (artists and songwriters) and audio content from historically marginalized groups.
Translation: where talent exists AND we can make money on them, we will. There are a lot of famous minorities with podcasts and music.
The equivalent in oil and gas is: “As a company, we are constantly evaluating the best opportunities to bring affordable energy to your communities. We will invest in all the economic projects for energy that we see available and compete in our portfolio. We will leverage our science and our people to work with the government on research grants and carbon capture markets that make financial sense.”
On this point, the oil and gas industry has done better, but in my view is looking to make virtue signaling investments in illogical early stage projects rather than waiting for the green tech bubble/valuations to explode and then buy them on Wall Street rather than build them on Main Street from the ground up. There will be a huge amount of wasted capital on many of these projects.
I have for years said we need Darren Woods, Mike Wirth, Toby Rice and Vicki Hollub to grab the microphone and use their substantial platform to push back on the narrative. They have the truth about the costs, trade offs and challenges on their side. On this, I have long given Chris Wright a lot of credit for his use of his voice and platform for the good of raising people out of poverty.
The industry needs to find someone to become the “Elon Musk” of oil and gas. A big personality that can’t be canceled. We only need one, and the whole industry would rally behind them, followed closely by the lobby groups and trade organizations.
But someone needs to take a stand, and so I give Daniel Ek an A+.
Spotify Team,
There are no words I can say to adequately convey how deeply sorry I am for the way The Joe Rogan Experience controversy continues to impact each of you. Not only are some of Joe Rogan’s comments incredibly hurtful – I want to make clear that they do not represent the values of this company. I know this situation leaves many of you feeling drained, frustrated and unheard.
I think it’s important you’re aware that we’ve had conversations with Joe and his team about some of the content in his show, including his history of using some racially insensitive language. Following these discussions and his own reflections, he chose to remove a number of episodes from Spotify. He also issued his own apology over the weekend.
While I strongly condemn what Joe has said and I agree with his decision to remove past episodes from our platform, I realize some will want more. And I want to make one point very clear – I do not believe that silencing Joe is the answer. We should have clear lines around content and take action when they are crossed, but canceling voices is a slippery slope. Looking at the issue more broadly, it’s critical thinking and open debate that powers real and necessary progress.
Another criticism that I continue to hear from many of you is that it’s not just about The Joe Rogan Experience on Spotify; it comes down to our direct relationship with him. In last week’s Town Hall, I outlined to you that we are not the publisher of JRE. But perception due to our exclusive license implies otherwise. So I’ve been wrestling with how this perception squares with our values.
If we believe in having an open platform as a core value of the company, then we must also believe in elevating all types of creators, including those from underrepresented communities and a diversity of backgrounds. We’ve been doing a great deal of work in this area already but I think we can do even more. So I am committing to an incremental investment of $100 million for the licensing, development, and marketing of music (artists and songwriters) and audio content from historically marginalized groups. This will dramatically increase our efforts in these areas. While some might want us to pursue a different path, I believe that more speech on more issues can be highly effective in improving the status quo and enhancing the conversation altogether.
I deeply regret that you are carrying so much of this burden. I also want to be transparent in setting the expectation that in order to achieve our goal of becoming the global audio platform, these kinds of disputes will be inevitable. For me, I come back to centering on our mission of unlocking the potential of human creativity and enabling more than a billion people to enjoy the work of what we think will be more than 50 million creators. That mission makes these clashes worth the effort.
I’ve told you several times over the last week, but I think it’s critical we listen carefully to one another and consider how we can and should do better. I’ve spent this time having lots of conversations with people inside and outside of Spotify – some have been supportive while others have been incredibly hard, but all of them have made me think.
One of the things I am thinking about is what additional steps we can take to further balance creator expression with user safety. I’ve asked our teams to expand the number of outside experts we consult with on these efforts and look forward to sharing more details.
Your passion for this company and our mission has made a difference in the lives of so many listeners and creators around the world. I hope you won’t lose sight of that. It’s that ability to focus and improve Spotify even on some of our toughest days that has helped us build the platform we have. We have a clear opportunity to learn and grow together from this challenge and I am ready to meet it head on.
I know it is difficult to have these conversations play out so publicly, and I continue to encourage you to reach out to your leaders, your HR partners or me directly if you need support or resources for yourself or your team.
Daniel
Great take as always. To your point about the oil industry needing an elon musk, I agree. I think you can be that personality and in a way you already are.