Spotify recently announced that it's launching a paid subscription platform for podcast creators — and it's already looking like a better option than Apple Podcasts in more ways than one. Apple recently made a similar announcement for its own podcast app, but for creators trying to get the most out of their podcast business, Spotify is shaping up to be the better solution.
Spotify unveiled its podcast subscription service on April 27, and all-in-all, it looks like a fairly simple setup. All existing podcasts will remain free for people to listen to, but if a creator wants to offer premium content, they now have that option. Whether it be deleted scenes, ad-free versions of a show, or something else, creators can now offer those additional things for a $2.99, $4.99, or $7.99/month fee. Subscriptions in Apple Podcasts work essentially the same while. All existing free shows will remain free, but creators can now create premium shows/episodes that require a subscription.
If all of that is so similar, why is Spotify's approach the better option? There are two key reasons for this, the first of which is how podcasters will distribute their premium shows between the two platforms. It's been confirmed that premium content locked behind an Apple Podcasts subscription needs to be uploaded directly through Apple's own backend instead of through a standard RSS feed. While that may not mean much for average listeners, it's a huge stumbling block for creators trying to manage their shows across different platforms. Spotify is currently in a similar boat, with its paid podcasts needing to be hosted on Anchor. The difference, however, is that Spotify is working to allow podcasters to bring existing subscription businesses over to Anchor and start offering them with Spotify subscriptions that way. Speaking to The Verge, Spotify's head of podcaster mission — Mike Mignano — said, "it’s new technology that we’re building now."
Spotify Takes Considerably Less Money From Podcast Creators
Perhaps more important than that, however, is the difference between how much money Spotify and Apple take from these subscriptions. If someone is hosting a paid subscription on Apple Podcasts, Apple takes a 30 percent revenue cut for the first year and then 15 percent after that. By comparison, Spotify isn't taking any revenue cuts at all for the first two years. When that changes in 2023, Spotify will only get a 5 percent cut.
While this again doesn't directly impact people that listen to podcasts, it's important to keep in mind when deciding how to support a favorite creator or show. Running a podcast is no small feat, and whether someone is listening to an independent show or a nonprofit like NPR, they likely want as much of their money to go to those creators as possible — not Apple or Spotify. This is an area where Spotify has an undeniable lead, and when podcasters are deciding where to host their premium shows, that may be reason enough for them to choose Spotify over Apple.
It's still very early days for both Spotify and Apple's subscription models, meaning they're bound to change and evolve as time goes on. For right now, though, Spotify appears to have the better strategy. It's not taking any money from creators for the first two years, the eventual 5 percent rate is far and away better than Apple's, and it's encouraging that Spotify is looking for ways to make the hosting side of things more open. For creators looking to dive into the paid podcast world, that's a lot to consider.
Source: Ashley Carman, The Verge