Comparing Spotify and Apple’s Podcast Subscription Services

Comparing Spotify and Apple’s Podcast Subscription Services

Spotify Follows Apple’s Lead

Spotify (SPOT) is taking a page out of Apple’s (AAPL) book and is launching a podcast subscription service. The move comes a week after Apple unveiled its own subscription model for podcasts.

The new services by the two streaming giants mark a big change for the industry. Podcasts have long been freely accessible online. Charging podcast listeners provides new ways for creators to make money but it is an unproven business model. Apple, Spotify, and other players in the podcast industry will be eager to see how consumers respond to these changes.

Spotify Won’t Take a Cut for Two Years

The new subscription model at Spotify will be powered by the company’s Anchor creator platform. Podcast creators will be able to mark certain episodes or shows as “subscriber only.” They can then charge listeners a monthly subscription fee of $2.99, $4.99, or $7.99.

Spotify will not take a cut of subscription revenue for the first two years of using this business model. Creators will get 100% of their subscriber revenue during that time, excluding payment transaction fees, then Spotify will take a 5% cut of subscription fees starting in 2023. Spotify is launching its subscription service with 12 independent shows and NPR, but the company plans to add more creators over the next few months.

Apple’s Strategy

Though Apple is also developing its podcast subscription service, it is taking a different approach. Apple’s new podcast subscription model enables creators to charge $19.99 per year to access premium podcasts. Apple takes a 30% cut of the subscription revenue, which is the same amount it gets from apps in the App Store. Apple’s cut declines to 15% after a year, but this is still higher than what Spotify plans to charge.

Podcasts have grown increasingly popular in recent years, but the podcast market has been tough for companies to monetize. If the subscription model works out for Spotify and Apple, more podcast providers will likely follow suit.

Things are changing daily within the financial world. Sign up for the SoFi Daily Newsletter to get the latest news updates in your inbox every weekday.

Sign up

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store SoFi Android App, Get it on Google Play

ABOUT Meg Richardson Meg Richardson is a writer specializing in markets, technology, and personal finance. She loves breaking down seemingly complex ideas and making them readable and interesting for everyone. She holds an MFA in writing from Columbia University. When she is not writing about finance, she enjoys running in Central Park and drawing cartoons.

TLS 1.2 Encrypted
Equal Housing Lender