Spotify could take on Apple’s premium podcast service … with a twist

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Spotify is adding 2x as many monthly subscribers as Apple Music
Spotify reportedly won't take a cut of creators' subscription revenue.
Photo: Spotify

Earlier this week, Apple opened up its Podcasts service to subscriptions, calling it a “global marketplace for listeners to discover premium subscriptions offered by their favorite creators.” Now, The Wall Street Journal reports that Spotify is set to jump in with a rival premium podcast feature.

However, unlike Apple, Spotify supposedly won’t take a cut of podcasters’ subscription revenues.

Apple’s new service turned out a bit different from the Apple Podcasts+ rumor that circulated ahead of Tuesday’s “Spring Loaded” event. Many people expected Apple to announce a subscription service in line with the likes of Stitcher Premium — or Apple TV+, Apple Fitness+ and the like.

How Apple Podcasts Subscriptions work

Instead, Apple’s model works more like the App Store. Podcast creators can charge money for subscriptions, and Apple takes a healthy cut.

Reminiscent of the App Store, Apple will take 30% of subscription revenue in year one. In subsequent years, this drops to 15%. Podcasters also will pay Apple $19.99 per month if they want to enable subscriptions.

According to the WSJ, Spotify will offer something similar — except that it won’t charge creators for the privilege.

“Spotify plans to announce its own offering next week,” the newspaper reported, citing people familiar with the matter. “It will not charge podcasters, nor take a cut from their subscriptions, and will allow them to set their own pricing, one of those people said. Users of Spotify’s iOS app who subscribe will be routed to a website for the transaction, meaning that Apple won’t take a cut of that revenue, the person said.”

Spotify putting a dent in Apple’s plans?

This could put a big dent in Apple’s plans. Spotify has been gradually eroding Apple’s dominance in the podcast market. Through big licensing deals (such as the $100 million pact that brought in Joe Rogan), Spotify is announcing its intention to put podcasts front and center. Given Spotify’s momentum, Apple’s plan to charge creators for something they can do for free on Spotify could prove … well, difficult for the Cupertino company.

The WSJ report notes that Apple isn’t exactly throwing in the towel, however. Reiterating a story that first circulated in 2019, it says Apple is “in talks with podcasters about creating original and exclusive shows for its service, according to people familiar with the matter.”

Apple previously debuted exclusive podcasts. One, based on For All Mankind, serves as a sidebar to the Apple TV+ alt-history series. Another one, called The Line, is a documentary series about a Navy SEAL accused of war crimes.

Cupertino clearly hopes, as with Apple TV+, that securing exclusive originals will sway people to use Apple Podcasts. It’ll be interesting to see how this works out. Early on, Apple adopted a similar exclusives strategy for Apple Music. However, this appears to have shifted in recent years.

Source: The Wall Street Journal