The great Apple in the sky has spoken! Podcasting is saved! Long live our fruit-based overlords!
As I anticipated in my article 5 Predictions for Podcasting in 2021 (indeed it was prediction №1), Apple has awoken. At an event where they launched a new iPad Pro and a range of iMacs so skinny they finally understand how Kate Moss felt, Tim Cook delivered a bit of a bombshell for podcasters — a totally redesigned Apple Podcasts app, new Podcasts Connect interface, and, crucially, a subscription service to help podcasters paywall their content.
If you want to better understand the nub of these innovations, start with Justin Jackson’s explainer video or read today’s PodNews. There are going to be all sorts of technical elements that they are better placed to expand upon, but the question I want to look at — quickly — today, is what the short and medium term consequences are likely to be for Joe & Jane Podcaster. There are two major impacts that I want to examine: is this going to change the discoverability conundrum? And, is this a realistic path to monetisation for independent podcasters?
The Discoverability Conundrum
Here, I am moderately concerned.
The growing influence of ‘channels’ in the model Apple are presenting suggests that they are going to further reinforce their curation in favour of publishers from the mainstream, who have a number of shows across their network (this has been previously been a discreet feature of the Apple store, under the featured providers tab). I suspect they are, understandably, afraid that the hands-on approach that Spotify are taking with podcasters and podcast companies (I think you’ll struggle to meet a podcaster in London or New York who hasn’t been shown around the Spotify offices at some point in the past couple of years) is alienating publishers away from Apple’s notoriously hands-off approach.
You can see in the demonstration video that they are already working with partner channels like Luminary, QCODE and Broccoli — additionally, there are elements of the revamped Podcasts Connect interface (such as the ability to add host and guest details) that are, at the moment, reserved for partner publishers. So there’s a hint here of a two-tier system, where prestigious partners of Apple are amplified (Applified?).
And monetisation — more in a minute — is the issue here. Apple are going to be taking a 30% cut in year one of the partner programme (reducing to 15% in subsequent years) which offers them a massive incentive to push high performing products (as per the App Store) over the more curatorial approach that might favour independent and start-up podcasters.
I’m sure there will be something like a Discovery Channel (wait, that name’s taken…) or Discovery Playlist (a la Spotify) which will tick the box at HQ marked ‘Tiny Fragment of Bone to the Indie Podcasters Who Invented the Medium’ — but I suspect that, now there’s serious money involved in the project, we are only going to see a deepening of The Discoverability Conundrum for indie podcasters. Prove me wrong, Apple.
The Monetisation Mess
Maybe I just don’t believe in money. Certainly, whenever I hear of a new monetisation mechanism for podcasting, I’m instinctively sceptical.
Apple’s approach is simple and a riff on all their in-app purchasing contracts: 30% commission in Year One, 15% after that; $19.99 per annum for the partnership, which is a sop to podcasters because the app equivalent is $99. We are, after all, a poorer breed than software developers.
I think this is a story that will not be fully understood until we see the counter-plays from Spotify, Google Podcasts, Amazon, whoever. The obvious loser here is Patreon, who must’ve known that eventually Apple would streamline their processes and cut out their burgeoning role as middlemen.
And while there will be a lot of indie podcasters who are excited about the opportunity of taking home 70% (rising to 85%) of subscription fees, it’s important to remember that Luminary (and every other ‘Netflix for Podcasting’ model) has been a bust. I’ve said it a million times but the paywall — the stable door, so to speak — has been shut after the horse has bolted. Podcasting is engrained in public consciousness as free medium. Which isn’t to say that you can’t create subscriptions — podcasts on Audible, for example, where they’re bundled in with audiobooks, something that isn’t expected to be free — or paywall extra, early or exclusive (the Three Es, or the OnlyFansification of the media) content for uber-nerds, but that the conversion rate of unpaying audience to paying audience is going to be perilously low so long as the generational presumption that podcasts are free persists.
And if your conversion rate, when moving to a subscription model, is 5% or even 10%, that means that you have to have an extant audience of 100,000s before it becomes profitable. Which leaves you back at the same issue facing advertiser-driven financing models, where CPMs of $30 mean you need 100,000s of listeners before it can be truly self-funded.
So it’s an interesting opportunity for publishers to start getting a small return for their endeavour — and ultimately it’s good and right that we should have a proper marketplace to sell our podcasts — but for Apple there’s little business sense in working too hard at redistributing income across its millions of podcasts. They don’t need to catch minnows, they need to catch marlins.
A thought experiment: how many of the podcasts that you listen to would you be willing to pay, say, $3 an episode for? And would that figure still be the same if you could get a similar(ish) podcast for free?
Personally, there are probably only a couple of podcasts that I would pay to listen to (I am a bad example, perhaps, because I listen to podcasts for a job and that has destroyed recreational podcast listening for me). And even if there were more that I’d like to pay for, I don’t think I could justify spending more than $20 a month on them — that’s more than the cost of Netflix. So most of the podcasts that I listen to would miss out. I am a bad conversion as a listener.
But the Apple changes will make the platform competitive for major publishers. It might scupper a few Spotify exclusivity deals, and, equally, will allow Apple to fight fire with fire. Platform atomisation — which has been bubbling for a while — is about to be brought to the boil. And I know that I am a relentless – almost comically so — doom-monger, but I slightly struggle to see who is really going to benefit from these changes in the next couple of years. It’s certainly not listeners, who are being gouged and having their consolidated UX attacked simultaneously. While I hope that there might a silver (or gold (or green!)) lining for podcasters, my suspicion is that this is an improvement to the payments mechanism that doesn’t address the issue of low capital. It’s getting easier and easier to spend money on podcasts, but is there really more and more money to spend?
Tell me what your thoughts are on the Apple news — are you going to become a partner? Email me to email@example.com if you want to chat and, as ever, you can follow me on Twitter.