Apple muscles in on subscription podcasts

To get their show featured at the top of the Apple Podcasts feed, one of the best placements in the audio world, podcasters fill out a form, send it to Apple, and hope for the best.

The other, quicker way is to simply give the company a slice of their revenue.

Last week, five of the first seven podcasts promoted on the “browse” carousel in the Apple Podcasts app were participating in Apple Podcasts Subscriptions, the program the tech company rolled out in 2021 for shows to monetize bonus episodes, segments, and other content.

This wasn’t an accident. An executive at an independent podcast told Semafor that in recent months, when they asked the company how they could be promoted in the carousel, Apple leaders suggested that the show participate in the platform’s new subscription program. Another podcast exec told Semafor that while Apple Podcasts Subscriptions wasn’t a huge moneymaker for them, it was worth participating for the benefit of the podcast feed placement.

The company’s podcast team selects various shows for inclusion in the top slots, some of which are not participants in the revenue share. But since launching Apple Podcasts Subscriptions in 2021, it has tried to funnel podcast creators and shows into the subscription service. And, as one person at Apple put it to Semafor, the company has designed the Apple Podcasts app to offer more features to shows that opt in to Apple’s subscription product, including reserving slots for them in the top carousel.

Podcasting, unlike virtually every other online media industry, has resisted being dominated by powerful digital platforms. Most podcasts are distributed across a number of platforms, from brand-name tech companies’ apps to specialist services like Overcast. Many podcasters sell their own ads and maintain a direct relationship with their audiences.

But to the extent that podcasting has a homepage, it’s the top of Apple Podcasts.

Apple isn’t the biggest player in the podcast space; more people listen to podcasts on Spotify and YouTube. But Apple’s clean, podcast-only interface makes its Apple Podcasts landing page extremely valuable. At a moment when the volume of podcasts has made it difficult for some shows to promote themselves, Apple’s top banner is one of the key promotional vehicles that many striving podcasters obsess over.

The banner promotions are one of the only incentives that the tech platform can currently offer for its otherwise less friendly subscription margin. Apple takes 30% of subscriber revenue in the first year that a show signs up, and 15% in each subsequent year. That’s a high rate compared to competitors: Substack, which has a small podcast business, takes 10% of its podcasters’ revenue, while Patreon, which announced a partnership with Spotify last year, takes 5%-12%.

Apple’s move to assert control of the podcast subscription market comes as the Department of Justice has sued the company for allegedly abusing its market power — though the podcast app is one of the few areas that goes unmentioned in the 88-page complaint. But as in Apple’s proprietary App Store — a major target of the DOJ — the only real way for many podcasts to be discovered is for them to pay Apple to advertise. While Apple doesn’t dominate podcasts the way it dominates the handset market, its podcast subscription practices are a way in which the company can incentivize content creators to do business with the platform instead of its rivals.

Apple did not respond to multiple requests for comment. But the company has been pretty good to podcasters over the years. Despite being in the podcast business for decades, it hasn’t pushed monetization or cluttered up its feeds with third-party ads — unlike Spotify and YouTube, which insert their own ads and push users to pay for subscriptions. Apple must have decided that subscriptions were a better model because, ideally, they benefit both platform and creator.

In the past, the company has played many of its editorial decisions by ear. One audio executive who runs a podcast network recalled to Semafor that during a meeting with Apple several years ago, an Apple employee suggested that the company would consider putting one of this person’s shows at the top of the Apple Podcasts feed — if the podcast network began tagging Apple Podcasts in its tweets and advising users to listen specifically on Apple.

• Prominent placement in the Apple Podcasts app can help some shows net thousands of additional downloads a day. But a slot at the end of Apple’s carousel can have an impact that is “pretty minimal.”
• Apple sees its recently announced transcription feature for podcasting as a major leap for the service, allowing greater access to podcasts and generating more data about the content of shows that could benefit advertisers and subscribers.