Apple and Spotify have both announced plans to introduce payment options that will let podcasters create subscriber-only episodes. The moves break with podcasting’s open access history, but some commentators welcome the opportunity to diversify podcast revenue.
- Podcasts have historically been open and freely distributed. Support for podcast paywalls from the two biggest podcast listening platforms – Apple, with 30.5% of the market and Spotify with 28.1% – could change that.
- Both companies recently moved to support podcast subscriptions in what is being seen as an important step in diversifying podcast monetisation. Although podcast advertising revenues are growing quickly, the potential for ad income is strongest for the biggest shows.
- Individual creators, responsible for the bulk of the estimated 730,000 active podcasts, are less likely to secure significant advertising income. They will, however, benefit from being able to offer subscriptions to their highly engaged niche audiences.
- “We have found that, through our research, it seems to work especially well for creators who have really engaged and dedicated audiences — regardless of the audience size,” Michael Mignano, co-founder of Spotify subsidiary Anchor, told TechCrunch.
- The Apple Podcasters Program will include all the tools podcast creators need to offer their audiences subscriptions through Apple Podcasts. They will need to pay $19.99 a year for the service and Apple will take a 30% cut of all subscriptions in year one, 15% in subsequent years.
- Apple is also redesigning its podcast analytics platform – “Podcasts for Creators” – to help creators access more data about how their content is performing. This will help creators decide what content to make free, subscription or “freemium”.
- Podcasters selling subscriptions on Spotify will need to use Spotify’s podcast creator platform Anchor. They will be able publish episodes marked as subscriber-only to Spotify, but also to other podcast listening platforms. The programme is free for two years; a 5% fee will be introduced in 2023.
Growing the market
The entry of podcasting’s giants into the subscription space is likely to grow awareness of the potential for subscriptions among podcasters.
- David Stern, CEO of Supporting Cast, an established podcast subscription platform says his biggest challenge is to convince podcasters to consider asking people to pay to listen. “Apple’s push into premium content will help the industry understand how much revenue they are leaving on the table by not giving their listeners something to pay for.”
- The development of payment technology inside popular apps will simplify the process. To pay previously, listeners were often required to paste exclusive links into their listening apps. Apple and Spotify’s offerings will let subscribers pay and listen in the same place.
The emergence of a paid podcast sector will dismay the purist elements of the podcast community, who desperately want to hold on to podcasting’s open-access ethos. But both platforms have said they will support a mix of free and paid content.
NPR, the podcasting powerhouse that arguably launched the podcasting boom with Serial, will trial ad-free, subscriber-only content on Spotify and Apple. Listeners will still be able to listen for free, but will have to put up with sponsorship messages.