Apple more or less invented the podcast. Now she will finally try to make money from it: the company intends to start selling podcast subscriptions and keep a portion of each transaction for itself.
Apple CEO Tim Cook briefly mentioned plans to launch a subscription feature during the company’s main event on Tuesday, without giving further details. But someone familiar with Apple’s plans explained it to Recode:
- Starting next month, Apple will allow podcast publishers to sell subscriptions to individual shows or groups of shows and set their own prices, starting at 49 cents a month in the US.
- Apple will not ask podcasts to create exclusive shows only for Apple, but wants to distinguish between things they already distribute through Apple and things that go on other platforms: this could mean shows without ads or shows with additional content, or new shows that only exist on Apple.
- Apple will keep 30 percent of the subscription revenue generated by the creators in the first year on the platform. After that, Apple’s discount will drop to 15%. This is the same pricing scheme that Apple already uses for other subscription services, such as TV streams.
Apple’s announcement comes as major technology companies show renewed interest in podcasting and audio in general. On Monday, Facebook announced plans to create its own version of Clubhouse, the social chat application, as well as plans to distribute podcasts. Spotify has invested $ 1 billion in podcast and technology shows. Twitter already has its own Clubhouse clone, and strangely enough, CEO Jack Dorsey paid $ 300 million to buy the failed music streaming service Tidal for Square, the payment company he also runs.
We haven’t seen much evidence that consumers want to pay for podcasting, although there are some exceptions – mainly through Patreon, the company that allows fans to pay creators for exclusive podcasts or any other creative content they want to sell. And even if Apple sells a lot of podcasts, it’s unlikely to have an impact on the company’s bottom line: Apple’s service unit, which includes things like App Store and Apple Music sales, is already huge and has generated 15 , $ 8 billion in the last three months of 2020.
It’s still a significant strategic change for Apple, which introduced more or less podcasts – the name is a sign of Apple’s iconic iPod music players – to the mass audience in 2005, but has never tried before. to make money from them.
The logic, as Apple executives told me a few years ago, was that they didn’t think podcasts could be a meaningful business for the company, and that they were happy to let podcast creators share their stuff on their devices and software. Apple for free. By the way, Podcasts can do this: Apple won’t ask anyone to charge anything for podcasts.
In a way, this might be one of the only ways Apple could do a bit of podcasting. The podcast, for the time being, is overwhelmingly an ad-supported business (though still a relatively small one: the industry still hasn’t made $ 1 billion a year in U.S. ad sales: Facebook reported $ 84 billion dollars in ad sales in 2020). And while Apple tried digital advertising years ago, it has since adopted a pro-privacy attitude, meaning it can’t be present in advertising today – at least not using the data-centric tactics marketers expect now. in buy digital ads.
We will have a better understanding of how the podcast landscape will change in the near future. Facebook has promised to provide more information about its podcast plans later this week. And Spotify, which has already teased plans to offer subscription options, will talk about it later this month, according to someone familiar with the company’s plans.
In the meantime, you can listen to a conversation about how high technology reshapes sound, introducing me and podcast producer Vox Media Zachary Mack Here: