The effort to sell podcast subscriptions also mirrors the efforts by publishers to generate more reader revenue by implementing digital paywalls amid declines in advertising sales. Privacy-focused Apple generally shuns advertising sales, except in its App Store and Apple News app, while focusing on subscriptions.
Revenue for its services business, which includes things like subscriptions to Apple Music and its Apple News+ digital newsstand, grew 16% to $53.8 billion last year. Considering that sales of iPhones -- its biggest source of revenue -- slipped by 3%, Apple's subscription business is a key source of growth.
Apple's commission structure for podcast subscriptions resembles the one for the App Store. After paying a flat fee of about $20 a year to offer subscriptions, podcasters need to hand over a 30% cut of their first-year revenue to the company. The commission rate drops to 15% in subsequent years. That's still higher than the 12% Patreon charges to creators and the 10% collected by Substack, the platform for self-published email newsletters.
Apple's fee structure for the App Store has become a major source of contention for app publishers, especially rivals like the streaming audio platform Spotify, which competes directly with Apple Music. To differentiate itself from Apple, Spotify has worked to build out its exclusive audio programming by acquiring podcast studios and licensing hit shows like "The Joe Rogan Experience." The company is said to be preparing a plan to let podcasters charge subscriptions, and not collect a commission, The Wall Street Journal reported.
As antitrust authorities scrutinize Apple's near-total control over app distribution on its devices, and publishers ponder how the company's new privacy policies will affect their CPMs, it's worth considering: Does Apple seek to turn all content distribution into an ad-free subscription service -- with the App Store collecting a hefty fee?