Subscription Podcasts Are DOA. Apple Will Change That

There have been past attempts to get consumers comfortable with the idea of paying for podcasts, but the current push to do so feels different.  

It’s hard not to feel that way when tech giants get directly involved.  

Spotify, which counts 208 million monthly users, in late April started allowing podcast creators to offer subscriber-only podcasts on its platform. And today, Apple Podcasts, consistently one of the biggest podcast listening platforms, is launching in-app subscriptions after pushing back the rollout from May. 

It’s curious these companies are making such a push given the reluctance that so many have toward paying up for podcasts. 

In an early March survey YouGov conducted for Variety Intelligence Platform, 75% of U.S. podcast user-respondents said they had never paid in any way to listen to a podcast. That figure was almost flat from the percentage who said as much when asked the same question in June 2020.   

Moreover, 83% of surveyed podcast listeners said they were “not very” or “not at all” likely to pay in some way to access podcasts over the next year, a figure not significantly changed from June. 

But consider the possibility that some consumers answering these survey questions have had to go through a cumbersome process to pay for a podcast previously. These respondents also weren’t aware that Apple Podcasts would be launching in-app subscriptions, which were officially announced in April. 

That’s not something to gloss over because it’s likely that while some of the current hesitance toward paying for podcasts stems from the fact the overwhelming majority of them have always been available for free, there is also an inconvenience factor to consider. Paid podcasts are offered by a wide array of businesses, but the transaction is powered separately from the podcast platform via third parties like Patreon. 

This suggests the experience of many podcast listeners getting access to a paid show has involved hearing about the existence of a premium podcast (on something like Apple Podcasts), downloading a separate platform (Patreon) and then entering their credit card information. 

That’s not rocket science, but it’s far from a seamless process.  

And that’s why Apple’s in-app podcast subscriptions are so interesting. The exact user payment process wasn’t made clear in Apple’s announcement, but it’s hard to imagine paying for podcast subscriptions wouldn’t be as simple as downloading an app from the App Store (i.e. click some buttons and scan your face to use the payment information that you already have saved with Apple). 

This differs from the process on Spotify, where users are directed to a separate website outside of the app to sign up for a paywalled podcast (this circuitous process allows Spotify to avoid Apple taking a cut of this premium podcast revenue). 

This level of ease is likely to spur podcast subscriptions that wouldn’t have otherwise occurred, from users who users who don’t want to have more than one podcast listening app and consumers who’ve impulsively signed up for exclusive podcast content. 

Jacob Weisberg, who helped launched Slate’s subscription offering that included ad-free podcasts, recently said, “...the thing that I was always banging on about at Slate was we’ve got to reduce the number of clicks to get the bonus content for subscribers.” 

Ultimately, podcast subscriptions that occur via Apple Podcasts could lead to some consumers gaining an appreciation for premium podcast content and becoming willing to pay for podcasts hosted on other platforms like Spotify, even if there isn’t as seamless of a payment process. 

This process could trickle down to benefit other platforms that offer paid podcasts (like Luminary), and that should be exciting to podcast studios looking to have a more predictable revenue stream.  

And it may help some influencers be not as discouraged by the current apparent hesitance toward paying for exclusive content (like podcasts). 

If the process for premium subscription sign-ups within Apple Podcasts for some reason isn't as simple as anticipated, willingness to pay for podcasts likely wouldn't increase as heavily. But willingness to pay for podcasts could still improve to some degree simply because there will be a larger base of consumers who are exposed to the option of accessing paywalled podcast content.

Over the past few years, there’s been a strong push in the media business toward generating revenue from subscriptions as opposed to other means.    

Many publishing execs now consider subscription revenue to be a more important revenue stream than ads. And just look at the dizzying number of paid video streaming services that have launched since late 2019.  

It will likely still be a while until all the major companies in the podcast space start similarly prioritizing subscription revenue, especially if Apple doesn’t get some of its recent technical issues with its podcast app fixed. 

But Apple’s move into the paid podcast space at least makes it more likely that there will be a future where podcasts aren’t so reliant on advertising.