In the last week, both Apple and Spotify – the two biggest podcast streaming platforms – have announced subscription services for premium podcast content. This decision may just be a way to further monetise a booming industry, but the consequences could be far reaching, both in terms of how you discover and stream content.
The introduction of a subscription service is not a surprise. Most of us were expecting a move like this, and it feels pretty natural, particularly as companies like Spotify invest heavily in original content – just look at the mega money deal for The Joe Rogan Experience, plus original content from Harry & Meghan and the Obamas. In order for these investments to be sustainable, additional monetisation and the rolling out of premium/subscription only content was inevitable.
But what does this new model mean for you, the listener?
Well, I guess we can compare the evolution of podcast consumption to what Netflix did for video content ten years ago, and it’s called vertical integration. In other words, when one entity has complete end-to-end control. Netflix finance, produce and distribute their own content, and it’s the exclusivity you pay for. Spotify and Apple and others will begin competing in the same way Netflix, Amazon Prime Video, HBO Max and Disney Plus currently do.
Now I don’t believe podcasts will ever become quite as segregated as film & TV. A majority of podcasts will still be available on a free RSS feed, distributed across all major podcast players, including Spotify and Apple. This is because podcasting is a more accessible, community driven medium and there really is nothing to suggest people will stop creating podcasts, which means podcast hosts and all associated distribution channels will still exist. That in itself is still a big industry, and that means you will still have hundreds of thousands of free podcasts to consume at your leisure.
The unfortunate catch you may find yourself in is that the more popular your favourite shows become, the more likely they’ll be snapped up exclusively by the big players.
I also think the individual show deal such as Joe Rogan will be the exception rather than the rule. I expect a lot of the distribution deals will potentially be made on a network basis. For example, a big network such as Evergreen may sign a deal with Spotify for some or all of their shows. This is cheaper for Spotify – the cost of bulk-buying is less than the sum of paying individually for each show – and much simpler for Evergreen – who get to make a lot of money on one deal rather than negotiating many ads and sponsors. On this scale, for the businesses at least, it’s a win-win.
You may end up needing to pay a monthly fee to a number of different apps for the privilege of watching your favourite shows.
There is an upside of course – with more premium subscribers comes less of a dependency on advertisers, so those shows you like could eventually do away with the ad breaks or sponsored pre-rolls, and let’s face it you don’t tune in for those.
There is an additional long-term benefit to you, the listener, of paying for content, which is actually very simple – if you don’t like the content you won’t pay for it. This puts pressure on the streaming services to provide content not only consistently, but to a high standard. I don’t think it’s any coincidence that this modern golden age of television we’re enjoying has run parallel to this shift in consumption habits. This raises the bar across the entire industry, which ultimately gives you, the listener, far more choice.
I said this was a long-term benefit, because these services rely on having a strong subscriber base to invest in more content. Initially, you may find even a small fee may not seem worth it, as Spotify and Apple play catch up – rapidly tying big shows into exclusive deals and pushing through development of a slate of new original content. You won’t see the benefits of this for a while, until that catalogue of premium content has grown. But these services can only become financially viable if people back it, if subscribers grow, and that initial investment can be repaid.
Now here’s the cynic in me, because although your subscription holds streaming platforms to account and forces them to provide value for money, with this comes a huge threat to the independent podcasters out there, and it’s all about choice. Specifically, how these services may leverage their ability to drive the choices you make about what you listen to. With vertical integration comes a conflict of interest, where the producers of content are also the ones distributing the content. This means your recommended shows may not be totally selflessly calculated. I fully expect algorithms to place a bias on premium content. This in turn will drive more traffic to the shows your paying for, but it’s kind of unfairly doing so, and you could be missing other great independent shows purely because it’s no longer as easy to find them.
The catch 22 with the above is that in order for shows to catch the attention of Spotify or Apple commissioners, they must already have a pretty sizable audience, or (as mentioned above) they’re part of a network, which generally means they already meet a minimum audience threshold.
So it could be that these new subscription services could squeeze out many small and independent podcasts because those shows become increasingly difficult to discover, so stats go down and fatigue sets in.
It is true that anyone can start a podcast, and I continue to maintain that this will always be the case, but when nobody is listening it’s very hard for a podcaster to stay motivated and continue creating content. So the market shrinks seemingly organically, which then gives subscription services more credence. It’s a self-fulfilling prophecy which limits barriers to entry and ultimately makes you feel you have more choice when in reality there’s far less.
Heff Corp. launched last year to create original and networked podcasts specialising in film & TV coverage, and so I’m not going to try and pretend that if Spotify or Apple came knocking we wouldn’t hear them out. We have people who work hard to bring you our shows, and we think they deserve to get paid for it. But so do the thousands of other creators out there who make great content. We need to ensure there are still opportunities for creators to get heard, and for you to find them.
There’s no point in making a show if you can’t or won’t listen. So we are curious in this next era for the podcast industry. I believe it can work – the TV & film industries have proved it can – but podcasting is still in its infancy. We are all learning, but we have to put you first. We exist because you listen to us, and over the next few years we, as an industry, need to make sure we still listen to you, or else we’ll all lose in the end.