Of Course Spotify Is Trying to Undercut Apple on Podcasts

Of Course Spotify Is Trying to Undercut Apple on Podcasts
Image: Spotify

Spotify has officially announced its rumoured paid subscription platform for podcast creators, and the company appears to be asking for a much smaller cut of profits than Apple from creators who use its service.

Spotify on Tuesday announced the launch of Paid Subscriptions, its creators subscriber platform that will allow them to monetise their podcasts. Available through podcast creation app Anchor — Spotify acquired the app in addition to Gimlet in 2019 as part of a deal valued at $US340 ($438) million — Spotify says the feature will allow creators to publish their content on a subscriber-only basis within their existing podcast feeds.

Most interestingly, Spotify says it will not charge creators for using the tool (though they will still be expected to pay for payment transaction fees) — at least not right away. But beginning in 2023, the platform will charge a 5% fee for using the service’s Paid Subscriptions tool. That is a far more competitive offering than what Apple is said to offer.

Recode reported last week that Apple plans to take a 30% cut of subscription revenue from its own recently announced Podcasts Subscriptions program, which allows creators to charge for things like ad-free, bonus, or exclusive content. After the first year, Apple’s cut will reportedly be reduced to 15%. That’s what’s to be expected as far as the Apple tax tends to go — the company takes a similar commission from apps on the App Stre — but it’s not exactly an enticing offer for creators, even if Apple Podcasts is the app du jour for the medium.

Spotify undercutting Apple’s podcast subscription offering comes on the heels of what appeared to be a jab at Spotify on Apple’s part over the way that it pays its music artists. Though specifics about how its payouts are broken down weren’t shared, Apple said earlier this month that it pays an average of a penny per stream (which is a little confusing, as it technically pays rights holders and not artists themselves).

Spotify had earlier revealed it pays significantly less, although the company has said that there were “a number of factors that contribute to that ratio looking small, which we understand can seem problematic.”

“We don’t believe it is; we are confident our model is maximizing revenue for everyone,” Spotify says on its Loud & Clear website. Neither company, in other words, is doing a particularly great job at rewarding creators, but each would seemingly like you to believe it’s at least doing a better job than the other.

Spotify said this week its new program will kick off with a group of 12 podcasters, including an ad-free version of the Planet Money podcast that will be labelled Planet Money Plus. Other creators can apply to Spotify’s waitlist, and the company says it will be expanding the program “over the coming months.”