In recent years, the business landscape has witnessed a significant shift towards collaboration, marked distinctly by revenue sharing and licensing deals. This trend isn’t just a fleeting strategy but a profound evolution in how companies approach growth, efficiency, and market reach. 

A prime example of this shift is the landmark deal between Spotify and Joe Rogan, which not only redefined podcast distribution but also spotlighted the benefits of collaborative growth strategies.

How can this strategy be employed by startups? How could corporations leverage off startups to create new revenue opportunities and remain relevant? What are the lessons for investors in guiding their portfolio companies?

In the past, businesses focused on building their internal lead generation networks and sales capacity to scale. This approach required significant venture backing and often led to cutthroat competition. However, the new model of collaboration, licensing, and revenue sharing offers a different path to growth.

By aligning interests and sharing revenue, businesses can leverage each other’s strengths, reduce risks, and access new markets. This shift from owning to sharing and from competing to collaborating allows companies to scale more efficiently and effectively without the need for substantial venture backing.

1. Maximising Reach and Reducing Exclusivity Costs:

   – Spotify and Joe Rogan’s Deal: Initially, “The Joe Rogan Experience” was exclusive to Spotify, a strategy to drive platform-specific user growth. However, the new deal, reportedly worth up to $250 million, allows for broader distribution across platforms like YouTube and Apple Podcasts. This move reduces the cost and risk associated with exclusivity while potentially increasing audience size and ad revenue. The non-exclusive nature means Rogan’s show can tap into diverse listener bases, enhancing global reach without the overhead of exclusive marketing or platform-specific content creation.

2. Leveraging Partner Strengths:

   – Synergy Over Competition: Businesses have realised that combining strengths with other entities can lead to better outcomes than going alone. Spotify, by allowing Rogan’s podcast on other platforms, leverages YouTube’s video reach or Apple’s established podcast audience, ensuring content permeates deeper into markets these platforms dominate.

3. Revenue Sharing as a Growth Lever:

   – Shared Incentives: Revenue sharing aligns the interests of all parties involved. For Spotify and Rogan, this means both are motivated to make the podcast as successful as possible across all platforms. This model encourages platforms to promote content more vigorously since their revenue directly correlates with its success.

4. Risk Mitigation:

   – Diversification: By not putting all their eggs in one basket, companies like Spotify spread their risks. If one platform underperforms, the presence on other platforms can compensate. This strategy also protects against changes in platform policies or market dynamics.

5. Innovation Through Collaboration:

   – Cross-Pollination of Ideas: When companies collaborate, there’s an exchange of ideas, technology, and strategies. Spotify’s venture with Rogan might inspire new features or content formats, encouraging innovation in how content is consumed or monetised.

6. Adapting to Consumer Behavior:

   – Accessibility: Today’s consumers expect content to be accessible wherever they are. The Spotify-Rogan deal acknowledges this by ensuring fans can listen on their preferred platform, thereby maintaining or growing listenership in an era where exclusivity might actually limit reach.

Conclusion: A Model for Future Business Strategies

The Spotify-Joe Rogan deal exemplifies a broader business trend in which collaboration, licensing, and revenue sharing are not just about immediate financial gains but also about strategic growth, risk management, and adapting to consumer behaviours. This model suggests a future where businesses thrive on mutual benefit rather than cutthroat competition. As more companies observe the success of such partnerships, we can expect this trend to continue and become the standard in how innovative businesses expand and evolve. 

This collaborative approach is the blueprint for the next generation of business growth, where the focus shifts from owning to sharing, from competing to collaborating, making the pie bigger for everyone involved.

When Spotify announced its new deal with Joe Rogan, it reflected a trend taking place in businesses globally: the move to create more licensing, Channel Partner, and revenue-sharing opportunities between businesses. I am now seeing this across so many areas. We have done it with our own business. As businesses look to create growth, they are now doing it less through their own internal teams and more through collaboration.