Last month, both Apple and Spotify launched new paid subscription options for creators to monetize their work more effectively. For creators who publish podcasts through Spotify’s Anchor division, podcasters can now mark their podcasts as subscriber-only and can charge either $2.99, $4.99, or $7.99 monthly. Spotify has promised to pass 100% of subscriber revenues (excluding payment transaction fees) to podcasters, although the company will start collecting a 5% fee in 2023.
Unlike Spotify, Apple is allowing podcasters to set any price for subscriptions, which are billed monthly by default (although annual is also an option). Moreover, Apple will charge creators $19.99 per year to use the service while also taking a 30% cut of revenues for each transaction during the first year of usage – that cut then drops to 15% the following year onward.
In the battle for podcasting dominance, Apple and Spotify are neck-and-neck, and the fact that both companies launched subscription options for creators in the span of a week is no coincidence. Giving creators new options to generate recurring revenues from their work is likely to drive a flood of talent to both platforms, which in turn will lead to more content to attract users or keep existing ones engaged. While advertising around free podcasts is likely to still generate the bulk of revenues in the podcasting world, Spotify and Apple are giving listeners and creators more choices about how to monetize and spend – and that’s never a bad thing.
According to Interpret’s New Media Measure®, subscriptions in the podcasting world have a lot of potential, as 37% of US podcast listeners streamed a podcast during 2020 through a paid streaming app compared with 44% who did so through a free app. Additionally, those who don’t listen to podcasts were far less likely to pay for a streaming music service – meaning podcast listeners are generally more inclined to pay for entertaining content.