Paid subscriptions are quickly becoming the default way for content creators to monetize their work. This trend can clearly be seen in two different fields, newsletters and podcasts, where ads used to be the main way to generate revenue.
Though they are different mediums, they are still closely connected to each other because many podcasters have a newsletter, and vice versa. It’s not uncommon that creators offer some parts of their work for free, whereas other parts are put behind a “paywall”, accessible only through a paid subscription.
When it comes to newsletters, we’ve recently seen the rise of new platforms that help writers focus on writing by taking care of the logistics involved in building, maintaining, and distributing a subscription based newsletter. Examples of newsletter platforms include Substack, an online platform providing publishing, payment, analytics, and design infrastructure to support subscription newsletters, and Ghost, an independent open source alternative providing similar services.
Podcasts have been around for about 20 years and the concept is actually very simple. You just need to place your sound file (e.g. an MP3) on a server that’s capable of producing an RSS feed containing information about your show and its episodes. This information is then gathered by podcast directories, like the ones maintained by Apple/iTunes and Google, so that when you’re using a podcast player you can easily find shows and listen to them.
Setting up a new podcast has never been this easy. You can literally do it in minutes. Image by CoWomen at Unsplash
Apple has played a major role in popularizing podcasts. A key milestone was when iTunes added formal support for podcasts back in 2005. For a long time iTunes was the main avenue for people to discover and listen to podcasts and until recently, the Apple/iTunes podcast directory was the de facto universal podcast directory. Let’s hope it stays that way and you can read more about the recent directory debacle in one of my previous articles.
Due to the open nature of RSS feeds and how the entire podcasting ecosystem has been built, it’s been challenging to monetize podcasts in any other way than with paid ads. Thus, listening to podcasts has mostly been free, but just like with commercial FM radio, you’ve had to endure listening to ads (or fast forward over them).
Some podcasters have built subscription mechanisms of their own, but subscribing and adding a custom RSS feed URL to your podcast player has been a somewhat clunky experience.
Dithering, a podcast by John Gruber and Ben Thompson, is an example of a podcast that’s available only through a paid subscription. Making Sense with Sam Harris is an example of a podcast, where there’s a public, free RSS feed featuring selected content, but most of the content is being published through a private RSS feed for subscribers only.
Now that podcasts have exploded in popularity, we’re beginning to see interesting developments in the ecosystem and the big platforms are taking out the big guns. While there are several platforms out there and all Big Tech companies seem to have ambitions around podcasts, the two most important platforms are Apple and Spotify.
Spotify has placed a lot of big bets on podcasting, e.g. by securing mega popular shows that are available only on their platform, such as The Joe Rogan Experience and Renegades with Barack Obama and Bruce Springsteen. They’ve also made a lot of acquisitions in the space and are currently testing subscription podcasts via Anchor, which is one of the companies they’ve bought recently.
Apple made a big splash earlier this week by introducing major changes to Apple Podcasts in the “Spring Loaded” event. Besides making changes to the Podcasts app itself, they also announced new tools for creators, such as the possibility to offer paid subscriptions. Here’s how Apple describes it:
Starting today, all creators can access an updated Apple Podcasts Connect dashboard, which has new features that make it easier to manage shows on Apple Podcasts, including the ability to edit metadata, schedule and manage show availability, organize shows into channels, manage multiple users and roles, and learn how listeners are engaging with their shows through new performance metrics and visualization tools. From Apple Podcasts Connect, creators can enroll in the new Apple Podcasters Program, which provides access to all the tools needed to build and distribute premium subscriptions on Apple Podcasts.
What’s important to understand is that should you choose to offer paid subscriptions via Apple, it means that your customer needs to use the Apple Podcasts app. There will not be a public RSS feed that you can plug into a third party podcast player. Furthermore, the Apple Podcasts app doesn’t exist on Android, and even on iOS many listeners use alternative podcast players, such as the independent and popular Overcast. Listeners might also be tuning into their podcasts via the Spotify app, which contrary to Apple’s Podcasts app is available on all operating systems and devices.
As a creator of a paid subscription podcast, you will need to give Apple a slice of the pie, and it’s a pretty big slice. First of all, creators have to pay a flat fee of $19.99 per year to even offer subscriptions, and then they give Apple a 30% cut of the revenue for each subscriber’s first year and 15% for the years following.
Perhaps the biggest challenge for creators is however the fact that you will have no access or ownership to your audience. Apple will be the middleman taking care of sign-ups and payments, and creators will only see audience demographics and analytics to the extent Apple chooses to show them in their Podcasts Connect dashboard.
In other words, if you would like to send a weekly email newsletter as a side offering to your podcast subscribers, you won’t be able to do that. In fact, the only way you can engage with your entire fanbase is through the podcast itself, while hoping that some of them also are following you on Twitter or Facebook.
Given the constraints mentioned above, I would expect that far fewer podcasters than what Apple is hoping for will set up their paid subscription podcast on Apple Podcasts. It’ll be interesting to see what kind of a subscription concept Spotify will launch together with Anchor.
It’s quite possible that Apple needs to reconsider at least how much commissions they can take from the subscriptions. They might also find some creative solution to the audience access question, e.g. allowing you to send a weekly newsletter to your fanbase without actually giving you the entire list of email addresses.
In any case, there’s a lot going on in the podcasting ecosystem and it seems clear that more and more podcasts will become subscription based. It also means that there will probably be less ads in podcasts going forward and that’s also going to have an impact on AdTech development in the podcasting space.
However, subscription based podcasts aren’t for every creator, and I don’t expect that the majority of podcasts will end up behind a paywall. Many podcasters will probably do what’s commonplace in the newsletter space, i.e. offer selected bits of content for free to everyone, and then place the premium content behind a paywall.