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Friday, April 23, 2021

2 Announcements This Week Shape Podcast Wars


A pair of announcements this week— Apple Inc.’s introduction of paid podcast subscriptions and Facebook Inc.’s new partnership with Spotify Technology SA to spur discovery and listening on the social network’s platforms—are the latest for a rapidly growing medium that is attracting top talent and top dollar, The Wall Street Journal reports.

“With Apple making its move into subscription, there is this platform war emerging,” said Josh Lindgren, head of Creative Artists Agency’s podcast department.

Podcasting, already on a tear before the coronavirus pandemic, exploded in popularity during the lockdown, and is on track to bring in more than $1 billion in revenue this year from advertising in the U.S. for the first time. An estimated 116 million Americans, or 41% of the U.S. population over the age of 12, are now monthly podcast listeners, an 11% increase over 2020, according to Edison Research and Triton Digital.

Wall Street Journal Graphic
For years, competition in podcasts has been a lopsided one: Apple—responsible for the namesake of the industry, a portmanteau of “iPod” and “broadcast”—enjoyed its status as the default destination for listening while doing relatively little to enhance offerings or profits. Spotify, meanwhile, has lavished hundreds of millions on popular creators and companies—sparking an arms race among iHeartMedia Inc., Audacy Inc. (formerly Entercom), Sirius XM Holdings Inc., and Amazon.com Inc., which all now see podcasts as vital for keeping customers engaged with their services.

Dawn Ostroff, Spotify’s chief content and advertising business officer, said the rush of other bets on podcasting validates the company’s early moves.

“We saw the opportunity before anybody else did, and we’ve been at it significantly longer than anyone else,” she said.

To some observers, Apple’s podcast news this week is akin to the awakening of a sleeping giant. More than 15 years after adding podcasts to its iTunes software, the tech company introduced a way for podcasters on its platform to sell subscriptions. Until now, the company has neither offered paid access for podcasts nor earned a commission from ads that appear in the more than two million shows on its platform. Apple declined to comment.

Podcasters will pay Apple $19.99 a month to enable subscriptions, and set their own prices for listeners. Apple will take a 30% cut of subscription revenue the first year, and a 15% take thereafter.

“For any industry to be sustainable, we have to be able to generate revenue from more sources,” said Donald Albright, co-founder of Tenderfoot TV, the maker of hit shows including “Up and Vanished,” “To Live and Die in L.A.” and “Atlanta Monster.” Tenderfoot will keep its shows free for now, but will explore releasing exclusive bonus content and early access to subscribers via Apple’s new program, he said. “It creates a more healthy industry.”

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