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April 20, 2021, 3:53 p.m.

Apple wants you (and it) to get paid for your premium podcasts

There’ll now be a dead-easy way to pay for a podcast on your iPhone. Will there be a market, and is this the end of the open podcasting ecosystem?

Apple has finally made its long-awaited move into monetizing podcasting, the medium it kinda-sorta invented and definitely brought to a mainstream audience. (What did you think the “pod” stands for?)

Podcasting’s first boom in 2005 came when Apple added podcast support to iTunes, and its second boom nearly a decade later came when it preinstalled its Podcasts app on every iPhone. While that app leaves a lot to be desired, it was instantly the No. 1 way to listen to podcasts — a title it still holds by most accounts, though Spotify is breathing down its neck.

Through it all, Apple has mostly avoided making money off the app — leading some podcasters to thank their benevolent overlord and others to wonder if that meant Apple’s interest in the space was waning.

At today’s “Spring Loaded” event, Apple announced that it wanted to make money off of podcasts in pretty much the same way it makes money off of apps. Most of them will remain free, supported by ads sold by their creators. But some will cost money, and Apple will take a cut. Here’s The Verge:

A monumental change is coming to Apple Podcasts’ business: the company is launching subscriptions within the Apple Podcasts app. During its spring event today, the company announced that people will be able to subscribe to content from the app for extra perks, like ad-free and bonus content, as well as early access. It’ll launch in 170 regions and countries next month.

Initial partners include Pushkin Industries, QCODE, and NPR. It appears that content creators will have to pay Apple $19.99 per year in order to offer subscriptions, and Apple will take 30 percent of revenue for the first year and 15 percent for the years following.

That 30/15 is the same cut Apple takes for in-app subscriptions. (Having a paid-subscription model probably made it more urgent for Apple to change what it used to call “subscribing” to a podcast to “following” a podcast. Awkward to use “subscribe” to describe both the paid and unpaid things you do with a show.) It also closely resembles how Apple handles “Channels” on Apple TV.

Perhaps most interestingly, Apple is allowing podcast publishers to create “channels” that bring together multiple shows under a single banner. For instance, a news site could offer a daily news podcast, a weekly opinion show, and an interview show and group them together under a single paid subscription. (It’s not clear to me yet how well those channels will play with publishers’ existing off-podcast subscriptions. For instance, if I’m a paying Washington Post subscriber, can I get access to an Apple WaPo paid podcast channel without paying again? Will there be any way to give subscribers access outside of Apple Podcasts — like in the publisher’s own apps? There’s good info on the subscription mechanics here and here.)

The most obvious beneficiary of this model is Luminary, the paid podcast subscription app that has done good work but struggled to find an audience. Putting a Luminary channel inside Apple Podcasts should do wonders for visibility and discovery. (Luminary will offer the same monthly rate in its app and in Apple Podcasts — $5.99 — but keep its $34.99 annual rate for its own app.) But Luminary’s meh performance was probably also a cautionary tale for anyone who wanted Apple to launch a unitary “Apple Podcasts+” subscription. People get excited about shows, about hosts, about topics, and those are very individual; it’s hard to get the value proposition right when you’re lumping together shows across genres, formats, and audiences.

The news publisher best positioned here might be NPR, the nation’s top producer of popular shows. Our old friend Nick Quah has the scoop (and for longtime NPR watchers, it’s pretty massive):

I’ll be very curious to hear how the member stations who predominate on the NPR board feel about a paid “public radio podcast subscription service” at the network level — something there’s long been major resistance to. Apple’s press release includes a screenshot of NPR’s Code Switch with a show-based pitch: “Support bold conversations on race, sponsor-free,” for $2.99 a month.

Setting up paid podcast subscriptions has been possible for a long time, but it’s been a real pain to handle things like bonus content, free trials, and other subscription basics in a user-friendly way. Apple can solve a lot of those problems with the flip of a switch, and it can market the hell out of paid shows. (And it’ll now have a reason to — that 30 percent cut.)

The flipside, of course, is that openness has been one of podcasting’s best features for as long as it’s existed. Anyone can start a podcast anywhere, and listeners could find them in any podcast app they pleased. One of the most prominent advocates for that open vision of podcasting was PRX and RadioPublic co-founder Jake Shapiro, who wrote about it here in 2019:

There is an industry trend toward more direct listener monetization and engagement. This includes crowdfunding, membership, tipping, and donations, as well as exclusive and premium content…

[The need for subscriber authentication] introduces obstacles and opportunities for the industry. There’s a risk that podcast listening apps become the default brokers of identity verification and authenticated access in podcasting. In other words, as a listener you may find yourself having to install five different apps to get all your favorite shows exclusive to a platform, and copying/pasting private feed URLs to access others.

More problematic, podcasters may find themselves locked out of a direct relationship with their truest fans, relegated to the role of a content supplier to platforms that control their experience. Ultimately, listeners are being asked to trade control and privacy for access and participation.

Apple, Google, Spotify, and perhaps other new entrants could “solve” this at scale by driving a dominant platform-based identity layer and monetization approach of their own, as they have done in other markets (alongside Facebook, Amazon, and Netflix)…

But at the logical extreme, app-based identity results in either winner-take-all platform hegemony or further fragmentation of podcast distribution, discovery, and monetization. At a moment when podcasting is still reaching new audiences and diversifying its business models, that kind of bundling comes at a cost to growth in podcasting.

I was wondering what Jake thought about today’s potential shift toward app-based identity and winner-take-all platform hegemony. But then I remembered Apple…hired him a few months ago to be its head of podcast creator partnerships! So, er, yeah, he likes it!

Seriously, though, with someone like Jake in a leadership position, I’m substantially more optimistic that the partnership decisions being made in Cupertino will be good ones for the broader field. (Can he sneak PodPass in there?) Still…30 percent is a big cut, and Apple’s slice could have a real impact on the pricing and marketing decisions podcast publishers have to make.

So Apple’s going paid. Spotify is testing per-show paid subscriptions right now. Will their paid catalogs be mostly mirror images — like, say, the iOS and Android app stores, where the big apps feel obliged to be in both? Or will they evolve into two highly distinct walled gardens, each with its own exclusives and special offerings?

What about Google and Amazon, each of which has its own dominant platform (Android, Echo) to experiment from? Will there be any market share left to share for the Pocket Casts, Outcasts, Castros, and other indie or third-party podcast apps? Do off-platform subscription services like Stitcher Premium have a viable free-standing path forward? And how many people really want to pay for a podcast, anyway?

Can podcasting’s benevolent overlord become a profit center without losing its soul? Consider that a good teaser for the next episode.

POSTED     April 20, 2021, 3:53 p.m.
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