For the first time, Spotify is letting podcasters on its platform offer subscriptions to their shows. The company announced its paid podcast subscription product for the US today, which will initially allow select partners who host their shows on Anchor to charge for content. Twelve independent shows, including Tiny Leaps, Big Changes and Mindful in Minutes, will offer bonus subscriber-only content, and NPR will launch ad-free versions of popular shows. A waitlist will open today, so podcasters can sign up to be included in the expanded rollout in the coming months, which will include international market availability. Notably, no Spotify-owned shows will go behind a subscription wall at first.
Podcasters won’t have to pay Spotify anything for the first two years. Creators will, however, have to cover the cost of transaction fees through Spotify’s payment partner Stripe. In 2023, Spotify will begin taking a 5 percent cut of total subscription revenue. That’s significantly less than Apple will charge; its new subscription service will take 15 to 30 percent of revenue. Podcasters have three monthly pricing options to choose from: $2.99, $4.99, or $7.99.
Paid content on Spotify will be demarcated by a lock icon where a play button typically shows up. To unlock the show, potential subscribers will have to navigate to the program’s dedicated Anchor landing webpage. Podcasters can choose to point them to that link wherever they want — such as their show notes, episode descriptions, or bio. Basically, they want to put the link anywhere and everywhere to ensure people can find it.
Notably, though, Spotify won’t have a big subscribe button at the top of every podcast page, and you won’t be able to subscribe directly within the app. Those limitations could make it harder for podcasts to sign up new subscribers. (This also means Spotify won’t have to pay Apple for any subscriptions sold under its App Store terms.) Apple’s subscription podcasts, on the other hand, will let you subscribe from right within its app.
Subscribers can listen to paid podcasts inside of Spotify or in a third-party app through a private RSS feed. Podcasters will not receive the names, email addresses, or any other personal information about their subscribers. Mike Mignano, head of podcaster mission, said that Spotify is open to feedback and considering different ways to make that subscriber / podcaster relationship stronger.
“It’s crucial to our model that we explore ways for creators to connect deeper with their subscribers, so you can anticipate us to be sharing more in the space soon,” he says. Content also does not need to be exclusive to Spotify.
All of this means that, yes, NPR will be using Anchor as a hosting service for its ad-free Spotify subscription shows, like Planet Money Plus. Planet Money is already available on Spotify for free, as it is on other podcasting apps, but Planet Money Plus will be a separate show page where the paid content lives. Anchor hosting is still free to use, and Mignano says the company plans to keep it that way, meaning some podcasters might decide to operate a separate feed off of Anchor to provide paid content within Spotify.
As for why anyone would want to make this effort, Mignano emphasizes that Spotify takes no cut of revenue at first and only a small cut starting in 2023 and that having paid content built into Spotify means a better chance of having content discovered. If people search for a type of specific show, a subscription podcast could show up and gain a paid follower. He also suggests Spotify could curate suggestions of shows that people might want to pay to hear. He also says, because this can all go through Anchor, the subscriptions shouldn’t require extra work.
“I view this as additive and in no way as an additional, or burdensome, step on behalf of the creator,” he says.
That said, it’s the only way to get subscription content onto Spotify for the time being since the app doesn’t support private RSS feeds. If a podcaster already runs a subscription business elsewhere but wants to offer their paid content on Spotify, they’ll have to start using Anchor in addition to their usual hosting provider. This also means managing a separate backend system for analytics. Apple Podcasts also just announced its own proprietary subscription service that requires podcasters to use its backend to host paid content.
Along with the subscription news, Spotify also announced plans to eventually launch a way for podcasters who already run a subscription business outside Spotify to bring it into the app. It isn’t totally clear how this will work, and when asked whether Spotify will simply support private RSS feeds, which it currently doesn’t, Mignano says, “it’s new technology that we’re building now.” The team is working with select, but undisclosed, partners to make this work and will be detailing the technology in the future.
The company also provided an update on its ad marketplace and says, on May 1st, certain Anchor users will be able to make their show eligible to receive ads through Megaphone, the company’s other hosting service and ad marketplace provider. These ads can only be inserted through Spotify’s Streaming Ad Insertion technology, meaning that the ads these podcasters receive will only populate when their listeners are streaming through Spotify. (Anchor’s sponsorships feature, which encourages hosts to read ads for products and receive a portion of the revenue, still exists, however, and works across platforms.)
The bigger podcast players are becoming increasingly interested in owning all parts of the podcasting ecosystem. Apple has historically taken a mostly hands-off role in the space, which has still somehow resulted in Apple Podcasts being the dominant listening app, but it’s now interested in making money off podcasters by taking a cut of any subscription revenue made on the platform. Spotify is not only interested in selling ads, but also subscriptions, and companies like Amazon and Google also seem to be interested in the ad-selling portion of the business. Although RSS has fueled the industry’s growth, it’s increasingly seeming like podcasters will have to operate various feeds on various hosting services and platforms to build out a full business.