Spotify is launching a new way for podcast creators to make money. The streaming giant’s podcast subscription feature comes just a week after rival Apple announced a similar offering.
Its paid subscription platform is available through Anchor(owned by Spotify), where podcasters can mark select episodes as subscriber-only then publish them on Spotify or any other podcast platform. A lock-icon on the play button will show for such episodes.
Podcasters will get all of the revenue from subscriptions for the next two years, excluding payment processing fees.
Spotify plans to take a 5% cut for using the feature, a very competitive rate compared to Apple’s 30% cut. The fee will go into effect from 2023. (Apple will drop its cut to 15% after the first year.)
In addition to revenue, Spotify’s paid subscription feature will also offer podcasters a wide reach and discoverability.
“By enabling wide distribution of subscriber-only content, our aim is to help podcasters maximize their subscription audiences and grow them from their existing listener bases,” Spotify says.
The feature is available in the US for now but will be expanded to more markets globally in the coming months. So far, the feature is available to 12 independent podcasters, including NPR.
Plans are underway to allow more podcasters to join the program as it expands globally in the future.
Spotify and Podcasts
Spotify has invested heavily in podcasts over the past few years. It has acquired several podcast companies, including Gimlet, Parcast, and The Ringer. Besides, it has also made some cash splurges striking deals with creators like Joe Rogan, Kim Kardashian, and Michelle Obama.
In November, it made a $235 million splurge to acquire a podcast advertising company, Megaphone – an important step to help the company monetize podcast content. Spotify’s podcast investment seems to be paying off with 345 million monthly listeners.
Spotify is not alone in the podcast game, however. Recently, Facebook announced its foray into audio with several products, including a podcast feature. The social media giant is also offering cash as bait to attract podcasters.