4 mins read

Apple is looking to stay one step ahead in the audio game… by funding exclusive podcasts

woman with headphones on

Podcasting is having a bit of a moment. Advertising revenue from the format is expected to pass $1 billion by the end of this year, and the number of adults in the US who listen to a podcast is growing steadily, with more than one in three now listening each month

These trends haven’t gone unnoticed by Apple. According to Bloomberg, the tech giant is planning to fund original podcasts that would be exclusive to its audio service, in a move to stay ahead of competitors like Spotify and Stitcher.

Executives at Apple have allegedly reached out to media companies to discuss buying exclusive rights to podcasts, although the conversations are said to be in the very early stages. This would be a huge change in Apple’s positioning in podcasts, as it has previously taken a very neutral distribution role.

It’s not the only move Apple has made to stay ahead of the podcasting game recently. Late last year, they rolled out Podcast Analytics, which to date still offers producers the most comprehensive view of how podcasts are listened to through their platform.

It has also recently brought its dedicated Podcasts app to Mac computers, as well as launching a web interface to allow people to listen to podcasts via their computers.

For many in podcasting, Apple is a huge driver of listeners, with reports of the Apple Podcast app (recently split out from the wider iTunes product) driving between 50-70% of listening on average for podcasts. Spotify, Apple’s biggest rival in the podcasting game, has just 15-20% of listeners worldwide.

Chart via “How People Listen to Podcasts”, Medium

Spotify has been making huge strides into supporting podcasting itself following the acquisitions last year of Gimlet and Anchor, recently rolling out a dedicated podcast tab in its app, as well as aiming to increase discoverability of podcasts within Spotify.

It’s no surprise therefore that Spotify’s stock price dipped 2.7% yesterday after Bloomberg’s article was released. These may just be rumours, but it demonstrates how significant this move could be should Apple actually look to commit money to exclusive podcasts.

Why invest in originals?

There’s a key distinction between original podcasts and exclusive podcasts here which should be borne in mind. Original podcasts are ones Apple would fund from scratch, whereas exclusive podcasts are ones that could already be running, which Apple would buy in and ensure exclusive access to future episodes or spin-offs just to Apple users. It’s unclear from Bloomberg or any subsequent reports which of these avenues the Silicon Valley giant will go down.

But where has this interest in original content stemmed from? Most of it is from the huge success Netflix has had with its investment in original content for video. The streaming giant spent more than $10 billion developing original content between 2017-2018, and their own shows frequently dominate the most-watched lists.

In fact, Netflix customers gave their original content a score of 81 out of 100, according to the American Customer Satisfaction Index, and its originals are widely credited with keeping customer acquisition and retention well above that of its closest rivals, HBO, Hulu and Amazon Prime.

It’s no secret that Apple badly wants a slice of this pie, and has the cash behind it to give it a serious run. It announced back in 2017 that it would look to invest $1 billion in acquiring and producing original TV shows for Apple TV.

It’s logical therefore that if Apple can find or fund a few smash hits just for Apple Podcasts, that it could put some much-needed space between it and Spotify, in second place. Spotify has already funded original shows from celebrities like Amy Schumer and Joe Budden, so Apple is essentially on the back foot here.

Other platforms are also well-established in the exclusive game. Stitcher, a free listening platform for podcasts, also has a premium option with ‘Stitcher Originals’, as well as exclusive bonus episodes from otherwise-free podcasts. For $4.99 a month, this premium tier gives users access to over 21,000 hours of exclusive podcasts and ad-free shows.

And podcast startup Luminary is based entirely on exclusive shows. For a monthly fee, listeners can get access to shows from big names like Trevor Noah, Lena Dunham and Keramo Brown, which are only available on Luminary’s app.

Apple has yet to make any money off podcasts, and it’s almost certain that will change over the next few years. Given Apple’s Podcast app is currently free, there are a number of routes they could go down for monetisation, if investing in original content goes to plan. They could adopt a Stitcher-style model, where podcasts are free, but a certain type or number are put behind a premium, paid tier. Or they could look to take the next step with their ads division, and insert ads programmatically, much like podcast platform Acast

For now, Apple’s foray into original podcasts is just a rumour. But given how far ahead its rivals are in the exclusive audio game, it’s likely that there’s quite a bit of fire behind this particular plume of smoke.

Download WNIP’s comprehensive new report—The Publisher’s Guide to Podcasting—designed to help publishers start a podcast, as well as providing a comprehensive set of tools, tips and advice on how to make your podcast a success. It also explores monetisation opportunities, with examples of publishers who are making significant revenue from podcasting. The report is free and can be downloaded here.