A few days ago I wrote about Apple’s announcement regarding updates to the Apple Podcasts app itself and their new tools for podcast creators, which include the possibility to create paid subscriptions.
The question I raised was: will subscriptions take over the podcasting scene entirely? It’ll take a few years before we can answer that question, but what seems abundantly clear is that all major podcasting platforms are doubling down on paid subscriptions.
On April 27th, Spotify, the other major player in the podcasting ecosystem, took its turn in announcing new tools for podcasters to monetize their work. No doubt Spotify would have liked to break the news before Apple, and it’s quite possible that Spotify had to hasten its announcement schedule due to all the buzz around podcast subscriptions.
Here are the key takeaways from Spotify’s announcement and how its offering differs from Apple’s:
Spotify is rolling out a paid subscription platform for podcasters, which will be available through Anchor, a podcasting company Spotify acquired in February 2019. My own experimentation with podcasting has been done on Anchor and I can testify that it’s a simple and straightforward tool for publishing podcasts. You can have a podcast up and running literally in minutes.
When publishing your podcast through Anchor, you’ll be able to mark episodes as subscriber-only. The integration with Spotify will be, as you’d expect, seamless. The subscriber-only episodes will show up in your Spotify podcast feed, but they will be marked with a “lock” icon. Clicking on the icon will guide listeners how to become a subscriber and “unlock” the content.
Interestingly, Anchor’s subscriber-only episodes can also be discovered and listened to on other podcast players, like Overcast or Apple Podcasts. Sure, this means fiddling around with private RSS feeds, but it’s nevertheless an important difference to Apple’s solution, where subscriber-only episodes published via the Podcasts Connect dashboard will only be available on the Apple Podcasts app.
Spotify has decided that for the next two years, the paid subscription program will come at no cost, meaning that 100% of subscriber revenues (excluding payment processing fees) will go to creators. This is a big difference to Apple’s fees, which are 30% for the first 12 months of each new subscriber and 15% from there on.
It’s worth noticing, however, that starting from 2023, Spotify will introduce a 5% fee (on top of payment processing fees), which will to some extent even out the difference to Apple. Check out a comparison table at stratechery.com.
Spotify also announced an Open Access Platform (OAP), which will let your listeners hear your content on Spotify using your existing login system. OAP is based on an open technology called OAuth. This gives podcasters with existing subscriber bases the option to deliver paid content to their paying subscribers using Spotify, while at the same time retaining control over the subscriber relationship. Again, this is a major difference compared to Apple’s solution, which is a completely closed system.
One of the key problems with Apple’s subscription solution is that podcasters will have no access (or visibility whatsoever) to the subscriber base. Spotify and Anchor will introduce a Q&A feature, which allows podcasters to take paid content even further by inviting subscribers to interact directly with the show. They will also add an “email subscriber” functionality that enables creators to contact their subscriber base directly. This could be used for example to offer additional perks like merch, promo codes, and more. Make no mistake however, it will be Spotify and Anchor who owns the subscriber base, not the creator.
To summarize, just a week after Apple’s podcast announcements, Spotify rushed out to announce a lot of interesting tools of their own, directed towards podcasters who want to explore new ways to monetize their work. At the same time they immediately addressed many of the concerns people had with Apple’s offering.
While subscription-based podcasts aren’t a new thing per se, the tools from Spotify and Apple make setting up and maintaining a paid podcast a lot easier than it was before. Discovering and listening to paid podcasts will also become much more convenient. Additionally, it’s great that creators finally have other ways to monetize their work than just the traditional ad-based model.
Finally, when comparing the new tools from both Spotify and Apple, I must say that has Spotify surprised positively, and at least on paper it looks like Spotify has produced the winning concept. Therefore, for my own part, I will definitely continue my podcast experimentations on the Anchor / Spotify platform.