Is Spotify’s podcast subscription service coming this week?
Spotify’s new podcast subscription service could launch as early as this week following rival Apple announcing a similar product, according to an insider who spoke to the Wall Street Journal.
Spotify claimed 2.2 million podcasts on the platform in its Q4 2020 financials. The company is associated with multi-million dollar deals with A-list celebs, but this move will see small independent creators find a new revenue stream.
“Our aim is to help podcasters maximise their subscription audiences and grow them from their existing listener bases,” the company said.
Already the battle lines between Spotify and Apple are drawn in the podcasting sphere.
Apple will let podcasters decide on what rewards to give their paying listeners, and has suggested options such as bonus content, early access, ad-free shows, free trials and sample episodes.
Spotify is expected to encourage similar rewards but has not officially named any.
However, in a survey of its subscribers in late 2020 on price tiers, it mooted $3 a month for “access to exclusive interviews and episodes” with ads.
The top of the range $8 per month could include access to “high-quality original content” and early access to some episodes, and no platform-inserted ads.
Speculation is that Spotify podcast subscribers will finalise their transactions via a third-party website, and not through Apple’s App Store which will deny it its usual cut.
Both companies will allow content creators to set their own price for subscribers.
But Spotify will let creators keep 100% of subscription revenue for at least the first two years (before a 5% fee kicks in) while Apple will keep 30% in the first year and 15% subsequently.
Spotify expanded its podcast base by buying Gimlet and Anchor in 2019 for US$340 million, and spending a reported US$235 million last November to acquire Megaphone, which offers hosting, ad insertion and targeted ad sales for brand partners.
Ad spend on podcasts are expected to hit US$1 billion, up from $800 million in 2020. Revenue is projected to more than double to $1.7 billion by 2024, according to Pricewaterhouse Coopers.
Various reports show that not only is the number of listeners rising (in the US, those listening at least to one podcast a month is 100 million, set to be 125 million in 2022), but more are spending their time on the platform.
Podcast listeners are younger, with a median age of 34 compared to broadcast radio (47) and network television (57).
In December 2020, Edison Research, Podcast One and Ad Results Media’s annual Super Listeners survey found that 49% agreed with the statement “Advertising on a podcast is the best way for a brand to reach you”, 54% are more likely to purchase the product or service, and 48% admit they pay more attention to advertising on podcasts than with other media.
Read more: Paywalls and podcasts: What’s going on?