In the world of big business, controversies arise. Audio streaming giant Spotify has navigated in recent weeks, facing calls to drop popular podcaster Joe Rogan from its platform over concerns he鈥檚 shared misinformation about COVID vaccines and repeatedly used racial slurs on his show.
How a company responds in times of trouble can say a lot about its corporate values. It can also pose a test of just how loyal users and customers are to a company, particularly in ethically charged situations like the Rogan one.
Spotify's response to the Rogan storm has so far been two-sided. It has slapped on any podcast featuring discussion of COVID-19, from its offerings, and distanced itself from Rogan's views. On the other hand, it has stood behind the podcaster, with CEO Daniel Ek telling employees in a that he doesn鈥檛 believe 鈥渟ilencing Joe is the answer.鈥�
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Oksana Shkurska, an assistant professor in the Rowe School of Business, studies corporate apologies and barriers to effective communication in big business. We spoke to her about Spotify鈥檚 response so far and what鈥檚 at stake for the company going forward.
How effective has Spotify鈥檚 response been so far compared to other similar situations you鈥檝e witnessed or studied?
Spotify is obviously in a challenging situation. On the one hand, the company is interested in higher revenues and has no intention to close Rogan's podcast, which it to acquire. On the other hand, it already lost money when its , in part due to the Rogan controversy.
Daniel Ek has written two open letters to the company鈥檚 employees since he received a letter from more than two hundred health practitioners bringing concerns about COVID-19 misinformation on Rogan鈥檚 podcasts. Ek鈥檚 apology letters, however, sent a message that Spotify had a low level of responsibility for its crisis, which damaged relationships with stakeholders.
Though in his second letter, Ek mentioned that he was sorry and 鈥榮trongly condemned鈥� what Joe said after Rogan鈥檚 videos with racial slurs came to light, many still have an impression that the CEO is on Rogan鈥檚 side because of the indirect language in his letter. It looks like Ek is trying to sit in two chairs while keeping Rogan鈥檚 show on the platform and making attempts to restore a damaged company鈥檚 reputation at the same time. It is the reason for growing disappointment among Spotify employees, artists, advertisers, and listeners, with听听听 hashtags trending on Twitter.
This situation reminds me of Donald Trump and Twitter, Alex Jones and Facebook, and PewDiePie and YouTube scandals. The majority of big platforms have similar issues when they have to choose between taking actions against big influencers who break the rules and keeping them on the platform because they generate revenue for the businesses. However, unlike Twitter, Facebook, and YouTube, Spotify refused to take action against Rogan for breaking the rules; on the opposite, the CEO emphasized that he was not going to 鈥榮ilence Joe,鈥� as 鈥榟aving an open platform is one of Spotify values鈥�.
Spotify faces a number of risks in the current situation. If you were a fly on the wall at Spotify鈥檚 corporate headquarters, what types of discussions do you imagine are going on at this stage in the controversy?
It looks like Spotify leadership understands that they did not handle the situation well, so they may be discussing different scenarios, weighing all risks, and looking for ways to mitigate them. Ek made it clear in his second letter that he had already taken a lot of measures to fix the situation. He promised to develop a set of rules for Spotify contributors, add a content advisory, remove a number of Joe鈥檚 episodes with COVID-19 misinformation, and invest $100 million to licensing, development, and marketing the content of the artists from historically marginalized groups. However, he understands that it is not enough.
The leadership understands that they may need to take more measures without putting the company at risk, especially if such big influencers as Ed Sheeran and Ariana Grande 鈥� who have the highest number of followers on the platform 鈥� . The company would lose millions of subscribers. So, the leadership may be discussing what other concessions they can make if the pressure from stakeholders increases. 听
What are the odds that Spotify eventually decides to walk away from Rogan?
Despite all the accusations of making money on the Rogan controversy, it is unlikely that the company will decide to walk away from Rogan. Spotify paid $100 million for exclusive rights to 'The Joe Rogan Experience' because he is a big influencer. However, this deal and promotion of Rogan鈥檚 show made the company responsible for its content. Not taking it into consideration was a big mistake from Spotify鈥檚 side.
To avoid more negative consequences, Spotify should go beyond making promises; it should commit to change and accountability. Ek should clarify what actions the company will take against those who break the rules and what the 'commitment to learning, growing, and evolving' means to Spotify. The CEO also needs to sincerely apologize to other creators, listeners, and Spotify employees for not having taken responsibility for enhancing platform policies and a content advisory. A sincere apology would help regain trust and rebuild the company's reputation. It will also contribute to Spotify's faster recovery from the reputation crisis.