For Every Sound There Will Be A Paywall

Michael Hedges April 28, 2021 Follow on Twitter

Scanning recent radio audience estimates the suffering is clear for music stations. Disruptions in the daily routines opened a bigger hole than first expected. Streaming services and podcasts ran right through it. They have the technology, the money and customers quite willing to sample the serendipity.

Smartphone and laptop manufacturer Apple is likely, reported the Financial Times (April 27), to face the wrath of European Commission (EC) digital and competition commissioner Margrethe Vestager issuing a formal antitrust complaint. Two years ago streaming platform Spotify complained to the EC that Apple, through its App Store and Apple Pay system, unfairly restricts those who compete with its Apple Music platform. Along with the rest of the big tech brethren Apple is facing a plethora of antitrust complaints, alleging various sins. An EC-level complaint would be a first for Apple.

The podcasting battleground is illustrative. Radio broadcasters and producers - not to forget publishers and advertisers - discovered podcasts as a means of attracting people unbounded by the traditional broadcast technology. Podcasts fit rather snugly on a mobile phone and can be easily located on various streaming platforms.

Apple Podcasts Subscriptions was introduced at the annual product roll-out last week by chief executive Tim Cook as “the biggest change to Apple Podcasts since its debut,” quoted by TechCrunch (April 20). The Apple Podcasts app was once part of the iTunes app. “Podcasting is the next generation of radio,” said the late Apple co-founder Steve Jobs in 2005.

As can be surmised from the name, Apple is counting on paid subscriptions to fuel the interest of premium producers. Offered soon will be tools for newcomers to the podcasting realm, easing navigation and access to payment plans. Big publishers salivating at the thought of new subscription revenue streams are not holding back. Also interested are TV and film producers looking for a new promotional vehicle. Podcast producers set their own subscription prices and any free trial period, one-off downloads not allowed. Apple’s new podcasting feature will be available in about 170 countries next month.

Spotify countered by offering a deep discount to podcast producers, first reported by the Wall Street Journal (April 23). There will be no commission fee on subscription until 2023 though producers will need to pay transaction fees to payment processor Stripe. After 2023 Spotify’s commission fee will be 5%, still much less that the 15% to 30% Apple takes. Noting the aforementioned EC antitrust complaint, Spotify cannot offer a direct subscribe button for podcasts as the app is available on Apple’s App Store and it would violate terms of use. Spotify also requires most podcast producers to use the Anchor hosting service, owned by Spotify. And, too, a handy ad-placement platform is available through Anchor.

First quarter 2021 results for Spotify, noted Variety (April 28), were a bit underwhelming overall. Monthly active users were up 24% though “investors had hoped for a bigger bump.” Without offering specifics, the company said Q1 podcast consumption “a strong increase” over the previous quarter. Its most popular podcast offering is the Joe Rogan Experience, from a US culture warrior comedian. Spotify paid US$100 million for the privilege of offering the podcast series and then found it necessary to remove 42 episodes of ranting, reported The Wrap (April 9).

“The approach velocity of a hungry rat increases exponentially with the sight of food.”
Hull’s Goal Gradient Theorem

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