A slew of recent articles1 claim that Apple is creating a new paid subscription service providing premium podcasts. According to these reports, Apple thinks they need to start shelling out cash for big name podcasts in order to compete with Amazon and Spotify. This is the same Spotify that was recently downgraded from neutral to sell by financial group Citi because Spotify hasn’t seen the kind of returns they would like on the hundreds of millions they spent locking down premium podcast providers such as Gimlet Media, Joe Rogan, and others.
From fortune.com:
Apple has been the dominant distributor of podcasts in the U.S. for more than a decade, offering the programs for free. […] But the company now faces significant competition from two of its biggest rivals: Spotify and Amazon.com Inc.
So let me get this straight, Apple has been offering podcasts for free for almost 20 years and NOW they suddenly face significant competition to their FREE offering?
It’s not crazy that Apple may feel they are leaving money on the table. It’s not uncommon for Apple to discuss ways it could improve growth and it makes sense to explore the idea of bringing in top tier podcasts as an additional draw to Apple Music, but Apple does not care one iota about Spotify’s attempt to monetize podcasts. If anything they chalk it up as a win when people use their hardware more often regardless of the service they are using.
From The Information:
“Apple—long considered the sleeping giant in the podcast space—is waking up. The company, which runs the most widely used podcasting app in the industry, is discussing launching a new subscription service that would charge people to listen to podcasts, according to people familiar with the matter.”
Apple has plenty of “discussions” about all kinds of ideas. Don’t go to print until at least there is a hint that they’ve decided on something.
Here’s my Claim Chowder: There will be no premium podcast subscription service from Apple. If there is any truth to these rumours, it’s about Apple giving a little more love to their Podcast app (which has also been rumoured). If Apple were to offer “high quality”, “paid” podcasts, it will be tied into users’ existing subscriptions to Apple Music.
Update: They did it. Apple is now offering subscription podcasts. What I didn’t understand when I called down the idea was that they wouldn’t pay upfront for finished shows or personalities but would facilitate podcasts adding a subscription and then take a cut of the proceeds.
1. Apple Is Ready to Invest in Its Own Original Podcasts, Apple Developing Podcast Subscription Service to Better Compete With Spotify, Apple Plans Podcasting Subscription Service in Threat to Spotify, Apple Mulls Podcast Subscription Push Amid Spotify’s Land Grab.