Apple recently announced it would be offering subscriptions for podcasts, allowing creators to charge for their content, while taking a percentage of the profits from each subscription. Now, though, Spotify has revealed its plan to launch its own competing podcast subscription service, with the company letting creators keep 100% of their earnings. Experts say that, along with several other factors, could help make Spotify more appealing to podcasters and their audiences. “The fact they’ve said they won’t be taking a cut of subscriptions is going to be a big driver, particularly for the majority of emerging or fledgling creators/podcasters,” tech economist and advisor Will Stewart told Lifewire in an email. “The first was with their recent live-audio acquisition, in response to the rise of Clubhouse, as well as recently outlining—unlike Apple—they won’t be taking a cut of subscription revenue.”
Cutting Corners
Apple always has taken a cut from the App Store, so it isn’t unusual to see the company taking a similar cut from podcast subscriptions. While 30% for the first year of revenue might not seem like much, for podcasters that don’t draw massive numbers—or even those just getting started—that percentage could put a sizable dent in the income they’re able to make. With Spotify, users would be able to monetize their podcasts without worrying about the company taking a cut. But money isn’t the only cost here. You also have to look at the value Spotify offers creators over Apple. “Unlike Apple Music, an Android version of Apple Podcasts doesn’t yet exist,” Stewart explained. “This means that Spotify offers its creators a massive reach across iOS, Android, as well as a masterfully redesigned web app for both Apple and Windows.” Stewart also noted that Spotify’s current reach is roughly 345 million listeners each month—with 155 million of those opting into one of Spotify’s paid subscriptions, as of December 2020. As a podcaster, choosing to release your content on Spotify gives you a much larger pool to push it to. Spotify also has overtaken Apple this year in terms of podcast listeners, with Insider Intelligence reporting that 28.2 million people will listen to podcasts on Spotify at least monthly, compared to the 28.0 million people using Apple Podcasts. While 0.2 million might not seem like an impressive amount of growth, Insider Intelligence believes we could see that gap grow each year. Spotify is estimated to reach 37.5 million podcast listeners by 2023, while Apple Podcasts sticks closer to 28.8 million. Apple has a fairly good reach with its devices, but locking your podcast into the Apple ecosystem might not be the best idea, especially if you’re trying to grow and attract audience members from all over the world. And while Apple has a high market share in the United States—making up roughly 60%—Android holds a much higher share worldwide, with 71%.
Casting a Line
Spotify’s podcast subscription service could be a good way to make the service more appealing and useful for both creators and users. The wider availability of Spotify is definitely a boon that creators and users can make use of, especially if more podcasts start to make the jump. Spotify also acquired Locker Room at the end of March, which Stewart says could be another plus for podcasters looking to find new ways to engage their audiences and monetize their content. “The fact that Spotify is not going to be asking for a top-line cut of revenue, and they’ve been very public that live-audio will be on the horizon, it will likely be a very preferred place [for] podcasters large and small to [test] out monetizing via subscriptions,” he said. Update: (April 27 / 1:32pm EST) - This story previously said there were reports suggesting Spotify may launch a podcast service. This has been updated to reflect Spotify’s official podcast subscription announcement.
