With the roll-out of paid subscriptions to access some podcasts, Apple has introduced a new era of podcast listening. Although listeners accessing shows through Apple Podcasts may have to pay a subscription fee, Apple will let podcasters keep a cut.
We take a look at what this means for podcast publishers and listeners.
What Does The Podcast Subscription Mean?
On April 20, 2021, Apple announced that it was introducing Apple Podcasts subscriptions. This enables podcast publishers sell subscriptions for listeners to access their content. There are three different levels available, so listeners can choose the right plan for them.
The first option is that podcasters can continue to offer their shows for free. This means that there is nothing to pay for, and all content is free to listen to.
A second option that Apple has called Fremium, means that podcast fans listen for free but pay a subscription for additional benefits. This could be exclusive access to extra content, ad free shows, or the ability to listen to archived content
The last option is that podcasters charge fans subscription options to listen to any content, usually with ad free listening.
What Are The Benefits?
Apple promotes this as a way of helping fans to get the most out of their podcast listening while also helping publishers with their audio ambitions.
The initiative is designed to be creator-friendly and flexible with podcasters able to offer annual or monthly subscription plans at their own pricing. This will be available in over 170 countries and regions.
Setting the level of the subscription will be down to the creator of the podcast content and there is no obligation to charge at all.
One of the selling points for Apple is that its customers are familiar with paying for certain services and that the company is trusted in that respect.
They also say it will increase podcasters’ audiences citing figures that indicate one in five subscriptions had an adoption rate of over 10%
The biggest benefit to podcast publishers is that they will be able to retain the biggest percentage of the fee that they decide to set for paid subscribers.
How Much Does It Cost?
The amount of the subscription for paid listening will be determined by the creator of the podcast. If a publisher decides to charge listeners they have to join the Apple Podcasters Program.
Apple podcast app will then distribute the show episodes and promise to protect them. However, they insist that publishers will always own the show and decide where it is listed.
Publishers will pay an annual fee to Apple to join the program. They then sign an agreement if they want to sell subscriptions and will receive their payments via Apple.
Podcasters then add subscriber audio or create a show in Apple Podcasts Connect which will have subscriber audio.
It is possible to add a subscription to a single show or to create a channel with subscribers having access to multiple shows.
What Percentage Will Podcasters Get?
If a podcast publisher decides to charge a subscription fee then they will decide how much this fee will be for their listeners. Apple will then take 30% of the fee and the remaining 70% will go to the publisher at each billing cycle.
When a subscriber reaches a year of paid service the amount that the podcaster receives goes up to 85% with the remaining 15% going to Apple. All of these percentages are minus any applicable taxes.
Any other revenue that publishers receive from their podcasts such as ad revenue remains 100% with the podcaster (also see, ‘How Much Do Podcasters Make?’).
Do Apple Competitors Offer Subscriptions?
When podcast listeners pay a subscription fee they will gain benefits such as being able to automatically follow a show. The page will also have a Subscriber Edition label to demonstrate that it has premium access.
If listeners subscribe to more channels the Listen Now tab extends to new rows so that there is better access to all subscription content. But will Apple competitor Spotify offer subscriptions, and with what benefits?
Not to be left behind, Spotify has decided to launch its own paid-subscription program in response to Apple’s move to introduce them in 2021. They promise to offer better economic terms and a wider reach than Apple.
They offer two monetization possibilities for creators, beginning with paid subscriptions. In the first two years, their podcast subscriptions will have no creator fees so those participating will get 100% of the revenue. Only payment transaction fees will be deducted.
From 2023 Spotify will take a 5% cut of the subscription revenue.
Like Apple, Spotify is introducing a three tier system for subscribers. However, unlike their competitor, Spotify will set the fees chargeable to listeners rather than letting podcast creators decide. The choices will be $2.99, $4.99 or $7.99 per month.
Apple is also charging $20 per year for the use of its podcast subscription tools, but Spotify doesn’t seem to be applying an annual fee.
Pros & Cons Of Subscription Podcasting
As a podcast creator, you may be deliberating whether to use a subscription on your show. There are advantages and disadvantages to this service, so it is worth careful consideration.
The most obvious upside is that there is money to be made by charging listeners to listen to either all or some of your content.
If you decide to split your podcasts into free and paid subscriptions then this will inevitably mean more work for you as you will need to produce extra or different content for paying listeners.
With a subscription, you will also reduce the reliance on advertising revenue as you will be directly monetizing your content. You can also concentrate on advertising your own product, your podcast.
Podcasting as a medium continues to grow, and the two biggest platforms continue to invest and find ways to make money for both themselves and podcast publishers.
Only time will tell if charging subscriptions will continue and develop or whether it will cause listeners to migrate to free platforms.