Will all of this pay off? This is the question posed by the actors of the podcast.
After having found its audience, the sector is now questioning its economic model. Platforms such as Spotify and Apple offer monetization solutions for creators of audio programs, but with varying degrees of success. We take a closer look.
You cannot have missed the fact that podcasts are a hot commodity. Recent statistics suggest that there are 120 million “podcast listeners” in the United States, a number that has grown nearly 30% over the past three years and is expected to reach 160 million by 2023.
The pandemic has a lot to do with it. Before the pandemic, people listened to podcasts for entertainment in the car or on public transport. Now they’ve made their way into our homes with smart speakers, and it’s not uncommon to dive into one of these pocket-sized audio formats while cooking, gardening, or even before bed.
A recent development in the podcast industry to try to capitalize on this trend is the offering of paid subscription packages that benefit the creators of this audio content.
Spotify in the lead. For several years now, the music streaming giant has been investing in different aspects of the podcast industry. So much so that Hot Pod, a newsletter specializing in the world of podcasting, claims that Daniel Ek’s company “is no longer a music company but a company committed to podcasting”.
Spotify vs. Apple
Last November, Spotify announced a new feature that allows podcast creators to charge for some of their programs. It has been deployed in the United States and in over 30 countries around the world. All publishers can use it, regardless of the audience level of their audio program.
They can create their own paid subscription plan, which starts at $0.49 per month and goes up to $150. Subscribed listeners can find exclusive programs or listen to their favorite podcasts in preview mode and without commercial breaks.
Its competitor, Apple Podcasts, had launched a similar offer a few months earlier. Podcast publishers have the option of broadcasting their content via the listening platform with an à la carte subscription at the desired price. US public broadcaster NPR is letting listeners enjoy episodes of “Code Switch” ad-free, for US$2.99 per month.
Regardless of the formula chosen, Apple takes a 30% commission on the revenue generated by subscriptions. It drops to 15% the second year. Podcast studios must also join a $19.99 per year program. Spotify does not take any commission until 2023. After that, it plans to charge a 5% commission.
Get consumers to dip into their wallet
Others have tried before them to diversify the monetization opportunities of podcasting, between advertising spots, sponsorship and subscriptions. Luminary is a perfect example. The company launched in April 2019 with the ambition to show that “podcasts don’t need ads,” as it proclaimed on Twitter at the time.
It soon had to face a harsh economic reality: only 80,000 listeners had subscribed to its paid monthly subscription at $4.99, a year after its launch. And this despite a paid offer centered on exclusive content, with celebrities like actress and producer Lena Dunham and talk show host Trevor Noah.
For its part, the American Glow is trying to stand out by offering listeners financial support for the program of their choice in just a few clicks.
Once subscribed, they can enjoy premium content on any listening platform (except Spotify and Pandora). Other companies such as Stitcher, Acast and Sybel are also trying to convince listeners to pay for the podcasts they listen to, with varying degrees of success.
Admittedly, this is not an easy task. How do you convince audiophiles to dip into their wallets when so many podcasts are already available online? Americans don’t really seem willing to do this, even though they are listening to more and more audio programs.
More than 80% of listeners say they are “not very” or “not at all” likely to pay in any way to access podcasts, according to a YouGov survey conducted for Variety. A third party thinks this audio content should be available for free and ad-supported.
Despite the podcast industry’s best efforts, paid content remains the holy grail in an industry historically built on free content. But it takes more to discourage some podcasters from taking the mic. According to research by Acast, more than one in ten Britons plan to launch their own audio program this year. Whether they can monetize them or not! Proof that when it comes to podcasts, passion always takes precedence over remuneration.