But last week, when Spotify announced its re-signing of Rogan, the company sang an entirely different tune about exclusivity for what is one of its most listened-to podcasts. Under the new deal, The Joe Rogan Experience will now also appear on rival streaming services. The message from Spotify: Exclusivity is no longer the holy grail it once was. 

The reason for the reversal? Spotify isn’t Netflix, according to Spotify CEO Daniel Ek. 

When Spotify debuted its podcasting business in 2019, many people mistakenly thought it would be “an all-out exclusive effort similar to that of Netflix,” he said during the company’s earnings call last week. Netflix, of course, sank billions of dollars into creating exclusive movies and series for its streaming platform in an effort to attract new subscribers. 

The perception about Spotify following a similar strategy was partly driven by its exclusive deals making the biggest headlines, Ek said. In fact, Spotify didn’t prioritize exclusive deals, he said, and it’s now moving away from them entirely. 

At the same time it announced sharing Rogan’s podcasts with other services, Spotify said that it would do the same with Alex Cooper’s high-profile comedy and relationships show, Call Her Daddy.

Spotify tried various distribution strategies for its podcasts, including exclusives created by independent artists or its in-house studios, and licensed nonexclusive deals. And while exclusives were a “net positive,” according to Ek, they weren’t as big a boon to the business as expected. 

The problem was limiting these hot commodity podcasts to only Spotify’s audience, according to Brian Mulberry, client portfolio manager at Zacks Investment Management. In addition to selling subscriptions, Spotify makes money by selling ads during podcasts, with the audience size a factor in determining price. By forcing consumers to use its app to listen to exclusive podcasts, Spotify limited the potential audience, and therefore limited the ad revenue it could collect from the shows. Licensing shows to other services also may attract users to use Spotify’s own app for its bonus offerings, like video extras, polls, and Q&A features, Mulberry told Fortune. 

The company wants to reduce the upfront minimum guarantees it pays to podcast hosts—often huge, as was the case with Rogan—and emphasize sharing revenue with them from any advertising. Such deals reduce the financial risk for Spotify if the show is a flop. 

“That is the path we see going forward on more and more of our deals,” Ek said. While details of the revenue splits with specific hosts aren’t public, Spotify has previously taken a 50% commission on revenue from ads that podcast hosts read to listeners during their shows.

Under a new agreement with Rogan, who airs conversations with friends and celebrities, some of which have gotten him in trouble, Spotify will sell and distribute ads for the podcast, according to the Wall Street Journal. The deal reportedly includes a revenue sharing agreement with Rogan based on ad sales. It’s unclear if Spotify has the same terms for Call Her Daddy, though the company will reportedly retain rights to the podcast’s video version, which is not the case for Rogan’s show. 

Over the past year, Spotify has loosened its grip on other once exclusive podcasts that were among 2023’s top performing shows. They include comedy and lifestyle show Anything Goes With Emma Chamberlain, an interview podcast featuring celebrities titled Armchair Expert, and research-based myth-busting series Science Vs.

At the same time, Netflix is shifting away from its exclusive strategy, too. After a few years during which traditional studios refused to license their content to Netflix in order to build their own streaming properties, they are switching gears following massive losses—which has helped enlarge Netflix’s library.

Newcomers to Netflix include hits like Suits, which drove massive engagement for Netflix last year and inspired a spinoff show for NBCUniversal, the rights-holder. “Sometimes, we can uniquely add more value to the studio’s IP than they can,” co-CEO Ted Sarandos said during an earnings call last month. The company has also added a cheaper subscription option with ads as a revenue-driver, which is similar to what Spotify is doing. While Netflix isn’t abandoning its exclusive offerings, the shift signals a wider industry recognition that exclusive isn’t always king. 

Doubling down 

Over the past two years, Spotify has only turned a profit during one quarter, and it is facing pressure from shareholders to cut costs. Last year, ad sales contributed $1.68 billion, or 16% of Spotify’s total revenue, with podcast ad revenue growing “in the healthy double-digit range,” the company said in its earnings release without offering specifics. 

Last year, Spotify lost $575.7 million overall. But the podcasting business is near break-even, according to Ek, and he expects the segment to earn a profit in 2024. 

“We have doubled down on the deals that worked, and we have gotten out of a lot of the deals that didn’t work,” he said during the call. Those that didn’t work appear to include podcast deals with the Obamas and Prince Harry and Meghan Markle, with whom Spotify parted ways in 2022 and 2023, respectively.  

While ad sales are a key factor in Spotify’s revised strategy, Ek emphasized the company’s relationship with creators as the driving force during the earnings call. 

Exclusivity wasn’t what the podcast hosts wanted. “The creator obviously wants to be on many different platforms and wants to have as big of an audience as possible,” Ek said, adding that Spotify’s new strategy lets it both grow its ad revenue and keep its talent happy. 

“Spotify is, in many cases, the No. 1 podcasting player already,” he said. “Exclusivity makes sense when you’re the small player trying to scale. When you’re the bigger player, the additional value of exclusivity is far smaller than it is about being aligned” with talent.