Podcast Wars: Spotify To Launch Subs, Forgo Taking A Cut

The podcast wars are escalating.

Last week, Apple announced it would let podcasters sell subscriptions, and Spotify is expected to do the same this week.

One difference: Spotify will forgo taking a portion of subscription revenue from podcast creators, according to The Wall Street Journal, while Apple will take its usual 30% cut in the first year and 15% therefter.

Other platforms, including Facebook, YouTube and Twitch, also take a cut of subscription fees or user payments.

Spotify actually announced plans to begin testing the subscription option to let podcasters earn revenue for access to exclusive content — as well as early development of its Spotify Audience Network advertising initiative — during an event in February. But the company did not release specifics about the subscriptions plan.



Last week, Spotify set the stage by announcing that it has partnered with Facebook to launch “Project Boombox” starting this week. That will give users access to Spotify’s podcasts and music directly within the Facebook app.

By forgoing subscription revenue and fees (Apple is also requiring podcasters to pay an annual $19.99 fee to use Apple tools required to sell subs), Spotify is hoping to be podcasters’ choice over Apple, and achieve listener numbers that will allow drive advertising and signups for its premium user plans.

Apple and Spotify have been facing off for some time now. Spotify has publicly attacked Apple App Store policies as anticompetitive, and does not let Spotify users pay for subscriptions via Apple apps. Apple, in turn, will not allow purchases of Spotify podcast subscriptions through Apple apps, according to reports.

As of Q4 2020, Spotify reported having 2.2 million podcast listeners — up from 1.9 million in Q3 and nearly threefold year-over-year.

It also reported that podcast consumption and ad revenue had doubled year-over-year.

“We have increasing conviction in the causal relationship between the growth in podcast consumption driving higher [long-term value] and retention among our user base,” the company stated  in its Q4 shareholder letter.

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