Apple Makes Move into Subscription Podcasts Market

To secure a coveted spot at the top of the Apple Podcasts feed, podcasters have two main options. The traditional route involves filling out a form, submitting it to Apple, and waiting for approval, hoping for a featured placement. However, a faster alternative is available: sharing a portion of their revenue with the company.Recently, five out of the initial seven podcasts highlighted on the "browse" carousel within the Apple Podcasts app were actively engaged in Apple Podcasts Subscriptions.

This program, introduced by the tech giant in 2021, enables shows to monetize additional content such as bonus episodes and exclusive segments.It seems that Apple's promotion strategy within the Apple Podcasts app isn't purely coincidental.According to executives from independent podcasts, when they inquired about being featured in the carousel, Apple representatives suggested participation in the platform's subscription program. While Apple Podcasts Subscriptions may not always yield significant revenue for podcasters, some see value in participating to secure prime placement within the podcast feed.

Although Apple's podcast team does include various shows in the top slots, regardless of their participation in revenue sharing, the company has been actively directing podcast creators toward its subscription service since its launch in 2021.Additionally, Apple seems to prioritize features for shows that opt into its subscription product, even reserving carousel slots for them within the app.

Unlike many other online media industries, podcasting has maintained a decentralized distribution model, resisting domination by powerful digital platforms. Most podcasts are available across various platforms, ranging from major tech companies' apps to specialized services like Overcast. Moreover, many podcasters choose to sell their own advertisements and foster direct relationships with their audiences, retaining a level of independence and control over their content and monetization strategies.

Indeed, while Spotify and YouTube may have larger listener bases, Apple Podcasts remains a pivotal platform for the podcasting community. Its clean and dedicated interface for podcasts makes the top of Apple Podcasts homepage a coveted space for podcasters seeking visibility. In an era where the podcast landscape is saturated with content, having one's show featured prominently on Apple Podcasts can significantly boost discoverability and audience reach. As a result, many podcast creators prioritize getting their shows showcased on Apple's platform, recognizing the promotional opportunities it offers amidst the competitive podcasting landscape.

The banner promotions serve as one of the primary incentives that the tech platform can provide amidst its otherwise less favorable subscription margin structure. Apple Podcasts imposes a significant revenue share model, taking 30% of subscriber revenue in the first year that a show signs up, and 15% in each subsequent year. This rate is comparatively higher than competitors in the space: Substack, which also hosts podcasts, takes 10% of its podcasters’ revenue, while Patreon, in partnership with Spotify, applies a revenue share ranging from 5% to 12%. Given these varying rates, podcast creators weigh the benefits of Apple Podcasts' promotional opportunities against the higher revenue share demanded by the platform.

Apple's push to dominate the podcast subscription market coincides with increased scrutiny from the Department of Justice over its alleged monopolistic practices. Despite the absence of specific mention in the DOJ's lawsuit, Apple's control over podcast promotion raises concerns similar to those surrounding its App Store operations. Many podcasters rely on Apple's platform for visibility, creating a situation where paying for advertising becomes almost necessary for discovery. While Apple may not wield the same level of dominance in podcasts as it does in the smartphone market, its podcast subscription model serves as another avenue to incentivize content creators to prioritize its platform over competitors.

Apple's silence in response to inquiries about its podcasting practices contrasts with its historical relationship with podcasters. Unlike platforms like Spotify and YouTube, which insert ads and promote subscriptions, Apple has refrained from cluttering its feeds with third-party advertisements, maintaining a more minimalist approach. However, the introduction of subscriptions indicates a shift in strategy, potentially offering a mutually beneficial model for both the platform and creators.

In the past, Apple's editorial decisions often seemed spontaneous. For instance, one podcast network executive recalled a meeting where an Apple employee hinted at promoting their show to the top of the Apple Podcasts feed if the network promoted Apple Podcasts on social media and encouraged users to listen specifically on Apple's platform. This anecdote sheds light on Apple's informal approach to content promotion in the podcasting realm.

Prominent placement in the Apple Podcasts app can significantly boost a show's visibility, potentially leading to thousands of additional downloads per day. However, placement at the end of Apple's carousel, while still beneficial, may have a more limited impact, resulting in relatively fewer additional downloads.Apple views its newly introduced transcription feature for podcasting as a significant advancement for the service. This feature enhances accessibility to podcasts and generates valuable data about the content of shows, which can be beneficial for both advertisers and subscribers.