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Why it’s so hard to scale paid podcast subscriptions

The last decade hasn’t been kind to digital publishing, but if I had to name one bright spot within the industry, I’d point to the rise of paid subscriptions. When The New York Times launched its metered paywall in 2011, many questioned whether consumers would ever pay for online news. Skip forward eight years, and not only has the Times proved that people will pay for news, it’s convinced 4 million of them to do so. And while the subscription model hasn’t served as a silver bullet to save all publishing outlets, plenty have replicated the Times’s success.

But much of that success has been confined to one particular kind of content: text. Whenever publishers branch out into mediums that aren’t text-based, they rarely rely on subscriptions as a primary form of monetization.

Take video as an example. Publishers often monetize their videos through one of two methods. The first is by running ads, either through a platform like YouTube or on native players embedded in the publisher’s website. The second is by selling a show to a major streaming service; hence why publishers have announced a slew of deals with companies like Netflix, Hulu, and Amazon. While it’s not unheard of for publishers to place video behind their own paywalls, I haven’t encountered many case studies in which an outlet credited video as a major subscription draw.

Podcasts fit the same trend. More and more publishers are investing in the medium, but, for the most part, they’re monetizing their podcasts with ads and live events. There’s a lot of experimentation occurring within the podcast space for offering paid subscriptions, but thus far the model has struggled to scale. 

Probably the most successful application of paid podcast subscriptions has been executed by Slate. The online magazine bet early on podcasts, launching its first shows shortly after the medium was invented, and a few years ago it debuted Slate Plus, a subscription offering that, among other things, allows subscribers to access ad-free shows with special bonus segments. Today, roughly 50,000 subscribers pay $60 a year for Slate Plus.

But it’s unlikely that all 50,000 subscribers are accessing the paid audio content. Slate Plus members get other perks, including discounted tickets to live events and access to web-only text content. Digiday reported that 70% of members — so 35,000 — “joined because of the publisher’s podcasts.” That means that the podcast subscriptions are generating about $2.1 million a year for Slate. That’s a nice chunk of change, but nowhere near the $400 million The New York Times generated from digital subscriptions in 2018. And remember, Slate has probably the most successful podcast subscription model.

Why is it so difficult to scale podcast subscriptions? Mostly because of the technical difficulties associated with any subscription offering. Podcast listening is fragmented across dozens of apps, and while a few individual apps offer some kind of paid membership capabilities, that means you can only offer subscriptions to people who listen to you through that specific app. The Apple Podcast app, which has, by far, the largest market share of podcast listening, doesn’t provide any in-app payment processing functionality. 

Publishers have tried to get around this barrier by using various methods. Some have sequestered the podcasts within their own mobile apps. The New York Times, for instance, locked its podcast Caliphate within its app for a windowed period of time before releasing it on free podcast apps. The sports publisher The Athletic also publishes several podcasts behind its paywall.

It’s unclear how many people actually listen to these paywalled versions, but this approach certainly has challenges, the first being that you’re requiring the listener to consume your podcast outside of the app that they typically use for most of their podcast consumption. That’s increased friction that makes it more difficult for the subscriber to build your podcast into their daily listening routine. Also, the vast majority of publishers don’t have close to the same kind of reach as the New York Times’s app. In fact, many don’t have standalone mobile apps at all. Perhaps this is why The Athletic, when it expanded its podcast offerings from 20 shows to over 120, chose to make most of those new shows available on free podcast apps. 

Other publishers have experimented with workarounds that allow subscribers to actually listen to subscription-only shows on their podcast app of choice. A number of platforms — Patreon, Substack, Glow — allow podcasters to offer personalized RSS feeds to paying subscribers, and these feeds can be accessed on most podcast apps. The liberal podcast Chapo Trap House, for instance, generates $145,000 per month by publishing premium podcasts through Patreon.

But this approach also comes with challenges. In order for this model to work, the podcaster needs to send the listener to a website outside of their podcast app. They must set up an account, enter their payment information, and then follow several steps to get the paid-for feed back on the podcast app. “It is a pain in the ass for us, and more importantly, it’s a pain in the ass for users,” Gabriel Roth, the editorial director of Slate Plus, told Digiday. That same article reported that Slate’s customer support staff “spends a large portion of her day helping people add the Slate Plus podcast feeds to their preferred podcast app.” 

What’s more, this strategy only works with apps that utilize RSS feeds as a mode of distribution. Spotify and Pandora, two apps that have made significant inroads to growing podcast listening market share, don’t allow for this, and because they have their own paid subscriptions, they’re unlikely to play nice with other payment platforms.

So am I arguing that publishers shouldn’t bother with paid podcast subscriptions? Not necessarily. But I do think that you should fit them within a larger subscription strategy that offers a bevy of other benefits. Many of these payment platforms — Substack, Patreon, Glow — give the publisher access to subscriber email addresses, so you can offer up exclusive newsletter content in addition to premium podcasts. As mentioned, The New York Times and The Athletic incorporated podcasts as an add-on to their already-existing subscriptions.

I could also envision a dynamic emerging that’s similar to the current video streaming ecosystem; just as publishers pitch TV shows to Netflix and Hulu, we might see a future in which publishers pitch exclusive podcasts to Spotify, Luminary, Pandora, and Stitcher Premium. Many of these platforms are already experimenting with these types of deals.

Some have proposed solutions that would make it easier for publishers to operate podcast subscriptions. One such solution involves the widespread adoption of an open protocol that would allow publishers to authenticate subscribers within their podcast app of choice, but thus far this protocol only exists in theory; no podcast player has adopted it. For now, publishers will need to rely on their clunky workarounds. My guess is most will forgo the process entirely and stick to their free, ad-supported shows.

Simon Owens is a tech and media journalist living in Washington, DC. Follow him on Twitter, Facebook, or LinkedIn. Email him at simonowens@gmail.com. For a full bio, go here.

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