Spotify Set to Rival Apple Podcasts Subscriptions With New Service That Won't Charge Content Creators

[MacRumors]

Apple this week announced a new subscription feature coming to the Podcasts app in May that will let podcast publishers sell subscriptions to an individual show or a group of shows, with pricing starting at 49 cents per month.

Publishers will be able to set their own pricing, but Apple will reportedly take a 30% of subscription revenue that creators generate in their first year on the platform, and after that, Apple will collect 15%. This is the same pricing setup that Apple uses for other subscription options.

According to a new report from The Wall Street Journal, Spotify will announce a similar podcast subscription feature next week, but in contrast to Apple, the rival streaming service won't be collecting revenue on any of the content it hosts.

The potential announcement from Spotify will pose a dilemma for some content creators looking to monetize their content on Apple devices. On the one hand, Apple's Podcasters Program, which is priced at $19.99 per year, promises a streamlined method of distribution through the Podcasts app, which comes pre-installed on all Apple devices.

On the other hand, Spotify commands a much larger subscriber base and isn't locked into Apple's ecosystem. Spotify has also been making inroads in the podcasting market over the course of the last few years, ramping up its original podcast offerings and making major acquisitions like Gimlet Media, Parcast, and Anchor, as well as scoring key deals such as the rights to the popular Joe Rogan Experience podcast. According to one prediction, Spotify could soon have more podcast listeners than Apple.

How Spotify's announcement goes down will be interesting to watch. Apple won't require podcast creators to create content exclusively for Apple, but it does have a number of partners on board ready to create premium podcast content, including Tenderfoot TV, Pushkin Industries, Radiotopia from PRX, and QCODE, NPR, the Los Angeles Times, The Athletic, Sony Music Entertainment, and more. How many grassroots podcast creators it will be able to attract remains to be seen.

Article Link: Spotify Set to Rival Apple Podcasts Subscriptions With New Service That Won't Charge Content Creators

 

[imlovinit]

Hmm I like Spotify but I don’t think it’s too smart not to collect any revenue off of hosting creative podcasts especially given the bigger platform. They would eventually need to collect something and better off asking lower amount IMO.

edit: just saw the other article about Spotify claiming they have to charge more for iOS users bc of apples cut, yet they’re willing to give away free hosting for content creators. yikes.

 

[farewelwilliams]

yet, they have one of the lowest royalty rates paid out to musicians for music streaming. how about fix that problem.

 

[mnsportsgeek]

Do you know what else they won’t be doing? Paying Artists.

 

[1258186]

Smart move by Spotify.

 

[1258186]

Do you know what else they won’t be doing? Paying Artists.

It says in the article the podcaster gets to keep all of the subscription revenue from their podcast on Spotify instead of giving up 30% commission to Apple.

 

[1258186]

yet, they have one of the lowest royalty rates paid out to musicians for music streaming. how about fix that problem.

And yet they pay out far more money to artists than Apple do because of their larger customer base. It’s not unusual for different retailers to pay different rates based on their volume of business.

 

[farewelwilliams]

And yet they pay out far more money to artists than Apple do because of their larger customer base. It’s not unusual for different retailers to pay different rates based on their volume of business.

That's a bit of a stupid comparison. Spotify is valuing artists' work less. Free-plan customers don't earn artists the same amount as premium users, which basically means the artists are subsidizing Spotify's free customer base. Free plan is what draws more customers in.

Imagine if Apple made artists pay for Apple Music service. Oh wait, they did that, and artists' cried outrage so Apple reversed course.

 

[jimbobb24]

I guess this makes Spotify a monopoly of the not charging creators podcasts world and they need to be sued and investigated by the DOJ. Oh wait that was Apple hater fantasy logic.

Back in the real world - smart competitive move Spotify.

 

[mnsportsgeek]

It says in the article the podcaster gets to keep all of the subscription revenue from their podcast on Spotify instead of giving up 30% commission to Apple.

*Woosh*

 

[contacos]

Do you know what else they won’t be doing? Paying Artists.

labels take most of the money anyway. The biggest problem are the labels, not the vendor

 

[lkrupp]

Smart move by Spotify.

Smart move? Ha ha ha ha! Providing a service that makes no money is a smart move? This is simply Spotify gasping for breath. A loss leader that will eat up profits with no positive results is not a smart business move.

 

[1258186]

That's a bit of a stupid comparison. Spotify is valuing artists' work less. Free-plan customers don't earn artists the same amount as premium users, which basically means the artists are subsidizing Spotify's free customer base. Free plan is what draws more customers in.

Imagine if Apple made artists pay for Apple Music service. Oh wait, they did that, and artists' cried outrage so Apple reversed course.

You clearly don’t know what you’re talking about. Artists do get paid when their songs are streamed on Spotify free tier because that is supported by adverts which generate revenue.

 

[Richu]

Hmm I like Spotify but I don’t think it’s too smart not to collect any revenue off of hosting creative podcasts especially given the bigger platform. They would eventually need to collect something and better off asking lower amount IMO.

edit: just saw the other article about Spotify claiming they have to charge more for iOS users bc of apples cut, yet they’re willing to give away free hosting for content creators. yikes.

I think you’re missing a few pieces.

- Free hosting on this may have a great conversion rate towards Spotify’s paid offering. Netting profit. While having far greater customer attraction than a paid version.
- The podcast segment is immature and growing, the big companies are fighting for turf. Having an attractive offer towards content creators like this dents Apple’s current value proposal.
- Apple’s cut has a massive impact on a substantial share of their revenue. Also it impacts the entire customer lifetime value for a subscription service. I have no opinion on this, but that’s why Spotify engages in the mechanic.

Will be interesting to see if Apple responds. Typically they’re very hesitant to change subscription mechanics. So it’s probably an effective move by Spotify.

 

[1258186]

Smart move? Ha ha ha ha! Providing a service that makes no money is a smart move? This is simply Spotify gasping for breath. A loss leader that will eat up profits with no positive results is not a smart business move.

How will it lose them money? It will encourage more Podcasters to join Spotify which will in turn encourage more users to join Spotify instead of Apple. It’s a win win.

 

[farewelwilliams]

You clearly don’t know what you’re talking about. Artists do get paid when their songs are streamed on Spotify free tier because that is supported by adverts which generate revenue.

Where did I say artists DIDN'T GET PAID AT ALL from free tier?

You completely failed to understand what I said.

 

[farewelwilliams]

You are just another Spotify hating Apple fanboy. I’ve no desire to engage in any further conversation with you.

I guess you found out you were wrong.

 

[1258186]

I guess you found out you were wrong.

Nope, just can’t be bothered wasting my time on people like you.

 

[zeezun]

buhaha spotify beating them on music streaming subscriptions, now dealing them a huge blow thru podcasts

*dont come with that spoti doesnt pay well for artistes, hold the ESL-like record companies responsible*

welp if u dont like how much spoti pays, move ur catalogue elsewhere. yawn

 

[jamcgahey]

This move makes sense due largely in part that Spotify is suing Apple on taking percentage cuts through their app store. What happens when the lawsuit is over? What happens if/when Spotify corners/dominates the podcasting department? Do they then decide to take cuts from content creators? Or do they decide instead to charge subscribers to use their platform to listen to podcasts? A combination of both? Please don't be mistaken. Spotify, like Apple, is a corporation. It is in their best interest to make as much money as they can. They are playing the long game here.

For now I will stick with using Apple Podcasts mostly with a sprinkle of Spotify for my Rogan fix.

 

[5H3PH3RD]

Nope, just can’t be bothered wasting my time on people like you.

And yet, you are.

 

[farewelwilliams]

Nope, just can’t be bothered wasting my time on people like you.

You're still engaging with me even after saying you have no desire to continue. Do you still want to engage with me or not? Confusing.

Let me make it easy. I'll end it here.

 

[1258186]

And yet, you are.

Whatever dude.

 

[eplusg]

As many other companies do, they start with low fees (or none) and when they have a large user base the fees start to roll out.

 

[0982786]

Is Spotify trying to become another Facebook? The MO seems to be to vacuum up as much personal data as possible about people using their service and then figure out how to profit from that later.