If you’re an avid podcaster, you might be pleased to hear that Spotify is launching podcast subscriptions. This move is the company’s first major step towards a streaming service, and it could help to drive some serious revenue growth. In this article, we’ll explore the product strategy and pricing for this launch. We’ll also take a look at how it fits into the company’s larger plan to compete with Apple Podcasts.
Pricing
A few days before the first quarter earnings report, Spotify announced a new podcast subscription feature. The service will let you listen to ad-free shows, and will also let you pay to unlock bonus content. This feature comes days after Apple launched a similar service, but with an added monthly fee.
Spotify has been aggressively expanding its podcast offerings. It’s also made some key partnerships, including a deal with NPR. During its Stream on event in February, the company showed off a series of premium subscription tools.
One of those tools will allow creators to mark their episodes as subscriber-only. Another is a private RSS feed. In both cases, the app will handle the subscriptions for you.
As part of its upcoming announcement, Spotify also plans to make proprietary ad monitoring tools available to podcast publishers. They’ll be able to use these tools to target ads. At the same time, they’ll be able to download subscriber contact lists.
There’s no word on when the feature will be released to consumers, but it’s expected to roll out in the U.S. and internationally over the next few months.
As for pricing, users can choose between three monthly subscription packages. These options are determined by the creator, but they’ll each include bonus content. Using the Anchor platform, the creator can mark a show as subscriber-only and point the user to a dedicated landing page. Depending on the model, the show could offer extra commentary or even a deleted scene.
While the most important thing is that you can subscribe to the show, the least important is that you’ll have a subscription. That’s because, unlike Apple, Spotify won’t be charging you to use the service.
Product strategy
In April, Spotify launched a test version of its Podcast Subscriptions tool, which gives creators a way to sell subscriptions to their shows. The new feature was first announced at the end of April, and now it has been made available to all podcast creators in the United States.
The tool allows for podcasters to mark episodes as subscriber-only, and then publish them to other platforms. There are two main pricing options, which range from $2.99 to $7.99 per month.
Creators will also be able to keep 100% of the revenue if they choose to. However, after two years, creators will take a cut of 5 percent of any subscription revenues they receive.
Apple and other premium audio companies have a mixed track record when it comes to monetizing content. But Apple is now seeking to change that with its recently announced podcast subscription platform. During the next two years, it will not charge creators for the tools they use to sell their shows, but will collect a 15% fee in the second year and a 30% fee in the third.
Apple and Spotify are both competing to capture a share of the market. Both companies have spent a lot of money on podcasting companies, and both have been acquiring and creating content. As of April, more than 100 podcasts have adopted the subscription feature.
Despite its rapid expansion, Spotify is also a firm critic of Apple’s anticompetitive behavior. It has lodged a formal complaint with the European Union over Apple’s behavior, and its executives have even testified before Congress.
As a result of this rift, Apple’s new subscription service may have a hard time convincing users to pay for podcasts. However, it’s still a major driver of podcast consumption, with over $1 billion in US ad revenue coming from the industry in 2018.
The company’s official blog emphasizes its support for podcasts. While subscription tools and features are not yet available to the general public, they will roll out over the next few months.
Competition with Apple Podcasts
Apple and Spotify are going head to head in the podcast subscription space. Both companies are launching subscription tools to woo the podcast creator community. But the two companies are pursuing different goals.
With Apple’s Apple Podcasts Subscriptions, users can buy ad-free, ad-supported access to a number of new podcasts. Some of those shows will also be available for free, such as NPR’s Planet Money and Guy Raz’s How I Built This. Other shows will be available for paid subscribers without ads.
In May, Apple will launch its podcast subscription service in 170 countries. The service will feature ad-free listening, benefits like a music library and the ability to search for new content. It will also offer the opportunity to subscribe to groups of shows for a monthly fee.
Apple has made a push for monetization in the past few years. They have acquired podcast companies, such as Megaphone, Stitcher and Breaker. Those companies help provide targeted ad sales for brand partners.
Meanwhile, Spotify has been investing in podcasts for a while now. A number of independent podcast creators have already signed up to be part of the subscription platform. Anchor, which is the central podcast hub, will allow creators to set their own pricing and make their episodes subscriber-only.
In the future, Spotify plans to charge users for access to its subscription tools. It has already announced a partnership with NPR. Initially, subscriptions will be available to 12 independent creators. However, further publishers will be added in the months to come.
Spotify’s plan is to let creators keep 100% of their subscription revenue for the next two years. After that, they will have to pay five percent of their revenues to the platform.
Streaming ad insertion technology
If you’re looking to market to podcast listeners, you may be interested in Spotify’s Streaming Ad Insertion technology. This new advertising platform will allow you to insert ads into shows in real time. In addition to allowing you to reach listeners, you can also customize the ads you’re placing. You can add images, buttons, or even text.
The Spotify Audience Network will help advertisers target audiences through psychographic segmentation, as well as demographics. It also allows you to find listeners in different geographic areas. With this technology, you’ll be able to remarket to specific listeners who are more likely to purchase the products you’re selling.
Before the Streaming Ad Insertion technology, you couldn’t reach a targeted audience on podcasts. Spotify has a large user database, and its listener information can give you an accurate view of the people who are listening to your podcast.
When you’re browsing the Spotify platform, you can use a direct search or browse through a playlist based on artists, genres, albums, or record labels. Once you’re ready to purchase a product, you’ll be able to browse through a wide range of options, making it easier for you to shop.
Streaming Ad Insertion is a major investment by Spotify, and it’s expected to grow in the coming years. As of right now, only a few major companies are allowed to advertise on Spotify, but this could change as the company tries to increase its ad revenue.
Megaphone, a podcast hosting company, has recently been acquired by Spotify. The company is now known as Megaphone, and its technology will be combined with Spotify’s Streaming Ad Insertion platform.
Connecting subscribers from another platform
Spotify is going head-to-head with Apple and Google in the world of podcasts. They announced today that they will be offering subscriptions to select podcasts. Specifically, it will let subscribers enjoy paid episodes of shows they already follow. The first batch of independent shows will be offered to users in the US.
In addition to paying a monthly fee to subscribe to podcasts, the service will also take a cut of the total revenue earned by content creators. This cut will be as low as 5 percent in 2023.
Although the Spotify team is working with unnamed partners, they are still not sure how the subscription product will work. For example, the team said they won’t have a big subscribe button at the top of each show page. But there will be a lock icon next to subscription content. That means if users want to listen to paid content, they’ll need to go to a dedicated Anchor landing webpage.
However, there are some limitations that will make it difficult for content creators to offer paid subscriptions to their fans. First of all, the subscription product is separate from the Premium service. It won’t be available through Apple’s iTunes store, and it won’t include ad-free listening.
Additionally, podcasters will have to set up different feeds on different platforms. They’ll have to pay for transaction fees through Stripe. At the end of the subscription period, they’ll have to renew payments.
One way that Spotify is able to provide a smooth experience to listeners is by using information from its podcast database. Specifically, it uses a feed that includes a podcast’s country of production, language, title, and description. These elements help listeners find the podcast they want.