16:51 PST 18-1-2021
by
Natalie Jarvey
The iPhone giant has been investigating the addition of a paid audio product, a risky move, given the rise of free, ad-supported programming.
Over the past decade and a half, Apple has built a significant influence in the podcasting industry by allowing creators to reach their large number of device owners without asking them for a penny. But the company’s recent discussions with creative partners about launching a subscription product to its podcasting business suggest that its government as a benevolent distributor may come to an end.
The conversations, first reported by The information, has been running since at least last fall, sources told The Hollywood Reporter, and eventually it can take different forms. Either way, it’s clear that Apple, led by Tim Cook, has been watching competitor-in-music streaming Spotify for the past two years, investing hundreds of millions of dollars to be among the most productive producers and popular personalities in podcasting. to adjust – no more content sitting on the sidelines. “There’s a huge opportunity to put 1.4 million iOS devices under their noses worldwide,” says Daniel Ives, an analyst at Wedbush Securities, “and they do not want to lose.” Apple declined to comment on its podcast plans.
Much of the growth of the podcasting industry over the past decade can be traced back to Apple and its former CEO, Steve Jobs, who declared in 2005 that he was bringing ‘podcasting mainstream’ by adding support for the medium to iTunes. A few years later, the company launched a separate Podcasts app that quickly became the leading distribution platform for the medium. But Apple, which earned $ 275 billion in sales in fiscal 2020, refrained from podcasting – still a relatively small industry that the Interactive Advertising Bureau estimates would generate nearly $ 1 billion in U.S. advertising revenue last year – in ‘ a money business.
Now, however, Apple’s position as the best platform for podcast listening is threatened because the company is experiencing strong competition from technology and media giants, including Spotify, Amazon and SiriusXM. In the years since the first podcast support was added, Apple has also focused on its growing services business, already offering subscriber products for music, television, video games and fitness videos.
But Apple will have to work carefully, as it is about launching subscribers to podcasting, a business that has long been largely funded by advertising sales. Many year old podcasters are a big supporter of keeping the medium free and widely accessible, and listeners have not yet shown a strong appetite for paid podcast services like the two-year-old startup Luminary. Even Spotify, which has a robust music subscription business with 144 million members, has refrained from placing any of its podcasts behind a pay wall. And Citi analysts recently questioned whether Spotify’s podcast investment could pay off, noting on January 15 that the company’s cadence of premium additions and download data ‘shows no significant benefit.’
Ives says Apple may find it easier to sell a podcast entry if it offers a compilation of exclusive and original popular talent shows, just like for video programming with Apple TV +, which was launched with drama in 2019. The Morning Show starring Jennifer Aniston and Reese Witherspoon. Apple has released a handful of in-house podcasts and discussed making podcasts that serve as companions to its original TV shows, according to sources, but it’s not yet necessary to work on high-profile projects or talent like Spotify did. Last fall, Spotify paid handsomely to bring it The Joe Rogan Experience, regularly the number 1 show on the Apple Podcasts map, exclusively on its platform.
Apple is currently enhancing Apple TV + subscriptions by offering a free subscription to people buying new devices. It also encourages people to pay for multiple Apple subscriptions by offering discounted Apple One bundles. LightShed’s media analysts recently wrote that they “believe that Apple can be successful” with a podcast product for a subscription if he uses his new bundles with his “leadership position in podcasting”.
The Patreon membership platform has shown that podcast subscriptions can work on an individual level, with fans paying for exclusive or ad-free content from their favorite personalities. Apple could use a similar feature, which allows people to pay à la carte to listen to programs without advertising. But to attract podcast partners, Apple’s transactions must cover any lost advertising revenue.
“It’s not like it’s a setup, ‘Ives says,’ but given how aggressively Spotify is heading towards this market in particular, they need to do something. ‘