Apple will let podcasters sell subscriptions and keep a cut for itself

Apple will let podcasters sell subscriptions and keep a cut for itself

2021-04-20 17:57:33
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Apple more or less invented podcasting. Now it's finally going to try to make money from it: the company plans to sell subscriptions to podcasts and keep a portion of every transaction for itself.

Apple CEO Tim Cook briefly mentioned plans to roll out a subscription feature during the company's keynote event Tuesday, without providing more details. But one person familiar with Apple's plans spelled it out to recode:

  • Starting next month, Apple will let podcast publishers sell subscriptions to individual shows or groups of shows and set their own prices, starting at 49 cents a month in the US.
  • Apple doesn't require podcasters to create exclusive Apple shows, but it does want them to distinguish between things they already distribute through Apple and things that appear on other platforms: that can mean ad-free shows or shows with extra content or brand new shows that only exist on Apple.
  • Apple retains 30 percent of the subscription revenue creators generate on the platform in their first year. After that, Apple's discount drops to 15 percent. That's the same pricing scheme that Apple already uses for other subscription services, such as TV streamers.

Apple's announcement comes as major tech companies are showing renewed interest in podcasting and audio in general. On Monday, Facebook announced plans to create its own version of Clubhouse, the social chat app, as well as plans to distribute podcasts of its own. Spotify has invested $ 1 billion in podcast shows and tech. Twitter already has its own Clubhouse clone, and strangely enough, CEO Jack Dorsey spent $ 300 million to buy the failed music streaming service Tidal for Square, the payment company he also runs.

We have yet to see a lot of evidence that consumers want to pay for podcasting, although there are some exceptions – usually through Patreon, the company that makes fans pay creators for exclusive podcasts or other creative content they want to sell. And even if Apple sells a lot of podcasts, it's unlikely to have an impact on its bottom line: Apple's service unit, which includes things like App Store sales and Apple Music, is already huge, reaching $ 15 in the last three months , 8 billion generated. from 2020.

It's still a meaningful strategic change for Apple, which more or less introduced podcasts in 2005 – the name is a nod to Apple's iconic iPod music players – to the mainstream audience, but has never tried to cash in on them until now. to earn.

The logic, as Apple executives have told me for several years, was that they didn't think podcasts could be a meaningful business for the company and were happy that podcast creators could distribute their stuff for free on Apple's devices. and software. Podcasters, by the way, still can: Apple doesn't require anyone to charge for podcasts.

In a way, this might be one of the few ways Apple can dive into podcasting. Podcasting is predominantly an ad-supported business for now (though it's still relatively small: the industry still hasn't cracked $ 1 billion a year in US ad sales: Facebook, on the other hand, reported $ 84 billion in ad sales in 2020). And while Apple trialled digital advertising years ago, it has since taken a pro-privacy stance, which pretty much means it can't exist in the advertising industry today – at least not with the data-centric tactics marketers now expect in their digital ad purchases.

We get a better idea 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 more about that later this month, according to someone familiar with the company's plans.


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