Apple's podcast subscriptions are good for business

More money is good, but only if you can command it.


During its “Spring Loaded” event on Tuesday, Apple did what Apple does. Exciting new gear was shown, rival products were imitated, computers were upgraded (just with fewer ports). Between the hardware fanfare, though, was the confirmation that the company would soon offer paid subscriptions for podcasts — a potentially significant change for the ever-growing industry.

Starting next month, podcasters can set their own price and Apple will take 30 percent of the first year of each subscription, dropping to 15 percent thereafter. Apple is pitching the service as a way to enable creators to offer either a vanilla paywall, early access or unique premium content (all of which would be hosted on Apple’s platform only — though it appears without exclusivity).

Monetizing a podcast isn’t new, of course, but it’s a bit of a wild west right now. For smaller or independent creators, Patreon is a popular way for fans to be able to access premium content. Acast takes that a stage further, with the option of baking Patreon into your show’s page. Then there are alternatives like Libsyn’s hosted subscriptions or Audioboom’s advertising and sponsorship offerings. Or maybe you want to use Podbean’s monetization tools or Supercast’s premium plans. Options there are, but most require sending your listeners off-site or come with some compromises.

At face value, Apple’s approach has a couple of advantages. The obvious one is just its sheer brand dominance. You can get your podcasts from any number of apps and locations, but everyone knows Apple Podcasts. If you use any Apple services, there’s also a good chance it already has your payment info, so subscribing for one more thing is entirely frictionless. You also won’t need to leave the podcast page you’re on, just to access all the bonus or premium content which is another big lure for creators and consumers alike. But it’s not all perfect. There are some genuine concerns, too.

Apple Podcast subscriptions.

For one, there’s Apple’s cut. At 30 percent for the first year of a subscription (and then 15 percent thereon) that’s a reasonable chunk of your earnings. It’s a little surprising, too, given that after years of charging app developers 30 percent the company recently lowered its cut to 15 for those that make less than $1 million per year (which is likely most of them). Patreon, by comparison, charges between 5 and twelve percent (plus processing fees) depending on what plan you have.

Apple’s tight rules on app revenue share has been a source of controversy recently with a very public spat between Epic Games over its insistence on taking a share of in-game transactions. Fortunately, at least as far as we can tell, you’ll be free to offer the same premium content elsewhere without restrictions as far as podcasts are concerned.

Nonetheless, Apple’s move this week will undoubtedly have profound implications for the industry as a whole. Mostly positive, but not all creators are convinced. Sarah Myles is a professional podcast producer, but also runs the Rise and Shine initiative that offers free workshops for small independent creators. “I think putting money in the pockets of DIY shows is great but it will only be worthwhile with a sizable audience,” she told Engadget. “The DIY podcasting space is incredibly creative and diverse so working to identify, showcase and fund emerging skilled creators is only a good thing for the industry.”

Not all creators are so sure, though. Indie podcaster Carrie Morrison is worried the fees might not work for those with smaller audiences “Doing my show requires so much of my time and energy and if I were to start charging, my small audience will probably stop listening and pay for bigger, more popular shows. It makes me feel disposable, I suppose,” they said.

This is the conundrum. Smaller shows, by definition, don’t have the audience to lure in advertisers, but likewise don’t have enough listeners for a subscription model to make total sense. Large companies, like Wondery, already have the budget and commercial interest, but are also the ones most likely to benefit from subscriptions.

It’s tempting to look to YouTube as an analogous model. But the video site’s near-exclusive hold on video shows and its vertical integration with advertising and premium subscriptions make it easier for grassroots creators to edge their way up the scale and earn as they go all on the one platform. With a subscription, you’re asking people to put faith in you first, and asking them to possibly change listening habits (say, moving from Pocket Casts to Apple) if they want to support you.

Advanced podcasting gear guide.
James Trew / Engadget

This is why Patreon has been so successful with podcasters to date. Alex Graham, founder of end-to-end production company Audio Coast thinks subscriptions might even lead more creators back to Patreon. “Perhaps something like this (subscriptions) will make a service like Patreon a little bit more popular in the sense that, instead of choosing Apple, Spotify, Google or whatever it might be at the time, you can decide just to take one approach and use across all your all your platforms instead,” he told Engadget.

And Graham is correct on one thing, for sure. It already looks like other major platforms are lining up to offer something similar — potentially unifying and dividing (further) the payment landscape all at the same time.

The real winners here might actually be those in the middle ground or those trying something different. Graham Hodge is a Director at production company Cup & Nuzzle, which regularly makes shows for clients like the BBC and Spotify. (Disclosure: I have produced an episode of one of their client-based shows.) For him, subscriptions represent an opportunity to monetize shows that require a lot of work but perhaps have an audience baked in through other channels.

“I think the advertising model, you know, works for a certain kind of very easy to produce very successful podcast,” he told Engadget. Hodge referenced an example of working on a scripted comedy show with a known host. “That's work. There's time and money that goes in. And it's very hard to recoup money for, your routes are: get a commission from BBC Radio 4 or Audible.” Obviously, not options for most of us. In this case, with a potential audience already lined up, he believes the subscription model might be a better fit. “Hopefully, people will be like, you know what, I love this show, I'm gonna pay a quid a month, to make sure the show can keep going.”

What Apple can do here is normalize paying for shows you love. Unlike TV streaming, where we can buy into a world of content for one fixed price, the challenge is making sure that listeners aren’t burdened with subscription fatigue. Not just by signing up to two or three of your favorite shows, but the other monthly media payments you already have — be that Netflix, Substack, Google’s Stadia or PlayStation Plus (and so on). Right now we’re paying more for entertainment than ever before, and it’s bewildering.

Perhaps, then, Apple’s main gift to podcasters will be the aforementioned normalization of paying directly for shows in a way that the existing platforms haven’t been able to manage. If there’s one thing the Cupertino company can do, it’s make an already existing thing suddenly seem more desirable or normal.

As more companies offer competing services, the podcaster can hope for better deals. They also need more flexibility. Apple’s service offers some, but with an obvious omission — one-off payments. Tipping has been a common, non-committal way for creators to receive payment for their work. With one-off payments, you can be rewarded for one single episode, or just because that’s all someone can afford to pay. It also means you can even pay more if you’re feeling particularly generous and feel like making someone’s day.

Obviously, this isn’t a system Apple offers on any of its other platforms (another plus for Patreon here), but one that might help fill in some of the gaps between those who can command an ongoing payment and those who can’t (yet).

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