April 27, 2021
The rivalry between Apple and Spotify to dominate the growing podcast market has heated up. Apple launched paid podcast subscriptions and Spotify recently partnered with Facebook to spur discovery. In its latest move, Spotify also launched a podcast subscription model but, unlike Apple, which keeps 30 percent of the fees, Spotify will allow content creators to keep 100 percent. Podcasting, which skyrocketed in popularity during the COVID-19 pandemic, is expected to bring in $1+ billion in advertising revenue this year.
The Wall Street Journal reports Edison Research and Triton Digital estimated that, “116 million Americans, or 41 percent of the U.S. population over the age of 12, are now monthly podcast listeners, an 11 percent increase over 2020.” For 15 years, Apple has been the “default destination” for podcasts.
Spotify, meanwhile, “lavished hundreds of millions on popular creators and companies” to best iHeartMedia, Audacy, SiriusXM and Amazon, “which all now see podcasts as vital for keeping customers engaged with their services.”
“We saw the opportunity before anybody else did, and we’ve been at it significantly longer than anyone else,” said Spotify chief content and advertising business officer Dawn Ostroff.
But Wedbush Securities analyst Daniel Ives noted that, “Apple, where podcasting originated, cannot lose out on the podcasting battle … it’s now or never.” “It’s both a defensive move toward Spotify but also offensive in terms of monetizing,” he added.
Apple will charge podcasters $19.99 to enable subscriptions and then take 30 percent of subscription revenue the first year and 15 percent thereafter. Spotify has seen its podcast inventory soar from 450,000 in 2019 to 2.2+ million today, and “is on track to overtake Apple Podcasts’ [listenership] this year,” according to eMarketer. Apple’s market share, 34 percent in 2018, is now 24 percent.
WSJ notes that Apple and Spotify are “likely to make paying for podcast content more mainstream.” With regard to music, Spotify, with 155 million global subscribers. is far ahead of Apple, which “last reported 60 million subscribers in June 2019.” Spotify continues to make major podcast deals with notable personalities, including a $100+ million licensing agreement with leading podcaster Joe Rogan.
Variety reports that Spotify, which has been a “very vocal critic” of Apple’s App Store policies, “doesn’t allow customers to pay for subscriptions through Apple in-app purchases,” adding that “similarly, you won’t be able to purchase Spotify podcast subscriptions through Apple (or via Google Play, either).” Facebook, via its Project Boombox, will “launch an integrated version of Spotify’s audio player … to provide access to songs and podcasts directly within the Facebook app.”
It opines that Spotify is allowing podcasting to keep 100 percent of the revenue for paid subscriptions to “make it as attractive as possible for creators to make Spotify their preferred platform — and to dissuade them from participating in Apple Podcasts Subscriptions,” thereby attracting more listeners.
Spotify chief financial officer Paul Vogel, in reporting Q4 results, said “25 percent of its total user base engaged with podcast content in the quarter (up from 22 percent in Q3 and 16 percent in the fourth quarter of 2019) … [and] podcast consumption hours in Q4 nearly doubled year-over-year.”
You Can Now Play Spotify Directly in Facebook Mobile App, Variety, 4/26/21