To diversify the revenue of podcast producers who rely on the booming advertising market, the tech giant is offering a new tool to build a monthly subscriber base.
Against the backdrop of the podcast gold rush Advertising – Total advertising revenue is projected to exceed $1 .3 billion this year. That figure will rise to $2 billion by 2023 – Spotify and Apple are launching a new tool for YouTubers in a growing area: subscriptions.
In April, Spotify filed a lawsuit, disclosing its service through Anchor, a podcast platform it acquired in 2019 that allows creators to set a monthly price of $2.99, $4.99, or 7.99 dollars set for users. Apple countered June 15 by releasing its tool that allows developers to set prices starting at $0.49 per month.
Creators will keep 100% of their sales (excluding processing fees) on the Spotify service – only available to Creators in the US – until 2023, when Spotify drops 5%. However, maker Apple – which is available in more than 170 countries and has 28 million listeners in the US on eMarketer – had to forego a 30% reduction in sales in the first year and 15% in the following years.
Creators must also accept that they will not have access to critical customer data, including email or other contact information for their paid viewers. The final caveat can be a hurdle for some YouTubers and businesses where access to email lists and audience data is critical if they want to move their followers to other platforms in the future.
Simon Sutton, CEO of podcast network Luminary ($4.99 per month via Apple), said he anticipates that subscriber revenue will eventually account for 50% of all industry revenue, with the remaining 50% still coming from advertising.
But the damage “is still a long way off,” he notes, and until then, most podcasts are still primarily focused on advertising and revenue sponsorship. “It’s still a fast-growing, young industry driven by a young population,” said Sutton. “It will take years before it reaches maturity.”