Spotify's $100M diversity pledge is 'half-baked' and 'amounts to a bribe,' experts say

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"The thing that’s surprising here is that the CEO didn’t anticipate — and clearly had no plan for — reacting to controversy," said one expert.

Spotify’s pledge to commit $100 million to develop and market content from groups that have historically been marginalized is being seen as too vague and reactionary — and a clear example of a company being caught off-guard despite numerous warning signs about the controversial host, according to experts. 

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The move comes after the streaming platform faces continued backlash over its support of podcast host Joe Rogan, who repeatedly spread misinformation about the Covid-19 pandemic and made racist and offensive comments.

They’re trying to deflect the negative publicity with what amounts to a bribe.

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“It’s clear that there was no appetite to get out in front of this issue, it’s been very reactive, which sends the message that they would have rather not dealt with it and now the appearance is they’re trying to buy goodwill,” said Maurice Schweitzer, a professor at the University of Pennsylvania’s Wharton School of Business. “The thing that’s surprising here is that the CEO didn’t anticipate — and clearly had no plan for — reacting to controversy. On the one hand, he said to his employees, ‘This is going to be an ongoing struggle as we diversify content,’ but he’s clearly not prepared for it.”

The amount Ek pledged, $100 million, mirrors the amount Spotify paid Rogan to join its platform in 2020. It was announced in a memo, first obtained by Axios, and comes after multiple artists and podcast personalities pulled content from the platform in objection to Rogan’s unchecked offensive and false comments. But Schweitzer and other experts criticized the pledge for not clearly defining who these marginalized creators are and how they will be supported. 

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“These types of half-baked measures are not going to cut it. I would rather see a specific policy because this is so ill-defined. You don’t know who’s going to benefit. They’re trying to deflect the negative publicity with what amounts to a bribe,” said Anup Srivastava, a business professor at the University of Calgary. 

Tactically, the mistake was to “focus on the dollar amount rather than attempt to highlight those diverse voices,” said Ron Adner, professor at the Tuck School of Business Dartmouth College and author of “Winning the Right Game,” which looks at Spotify specifically.

“If they talked about how they’re going to give $50 million to creators and $50 million to create a platform for them, that would be really responding to what they’re confronted with. But just saying they’re going to spend $100 million isn’t going to do that,” he told NBC News.

The current controversy also highlights the lack of thorough guidelines about what content creators can and cannot say, the lack of disclaimers around certain content and raises questions about what Spotify embodies, experts agreed. 

Spotify did not immediately respond to a request for comment. But, in an earnings call last week, CEO Daniel Ek laid out the platform’s stance.

They need to make sure that the Black folks that work at Spotify also feel that same support and energy that the company has for Joe Rogan.

“We don’t change our policies based on one creator,” Ek said. “I do believe they’re right for our platform. And while Joe has a massive audience — he is actually the number-one podcast in more than 90 markets — he also has to abide by those policies.”

The licensing deal with Rogan gave Spotify the exclusive right to air his show, but enabled him to maintain ownership and prevented Spotify from exerting control over the content. However, that’s not how Spotify’s role has been publicly perceived and there’s growing concern about the nature of Rogan’s content given the fact that his show reaches an estimated 11 million people per episode. 

“Spotify is vulnerable as a media platform because it’s vulnerable to the people in charge of content,” Schweitzer said. “But Ek has missed opportunities to articulate what Spotify’s values are. So far there has been a weak commitment to countering the spread of misinformation and a really weak commitment to challenging the issue of racism.”

Rogan’s audience was a major draw for Spotify as it pushed into podcasting and attempted to compete with Apple by signing popular hosts to exclusive deals meant to attract paid subscribers.

Jemele Hill, a former ESPN host who has been outspoken about racial issues in the past, also has a podcast available exclusively through Spotify. Hill, who is working with Spotify to build a podcast network for Black women, has chosen to keep her show on the platform for the time being. But she has also called for more clarity around how Spotify will invest in and support Black content creators.

“If Spotify is as dedicated and committed as they say they are, particularly to marginalized groups, then they need to be actively seeking or developing Black content creators that are deserving of the kind of colossal deals that were given to Joe Rogan,” Hill said. “They also need to make sure that the Black folks that work within the company at Spotify also feel that same support and energy that they have for Joe Rogan.”

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