Spotify is scheduled to launch its podcast subscription service next week, and the streaming giant is willing to forgo some revenue in order to counter Apple Music's push into podcast subscriptions.

Spotify's podcast subscription

Next week, Spotify will launch its podcast subscription option for partners. However, the company will be letting content creators keep 100% of the subscription fees.

The streaming company will not take a cut of podcast subscription revenue, as first reported by the Wall Street Journal.

Meanwhile, Apple will keep up to 30% of podcast subscription fees under its program, which is launching in May. Most creator platforms, including YouTube, Twitch, Facebook, and Patreon, also take a part of the subscription feeds and/or fan payments.

Also Read: Spotify Plans to Expand Market in 80 More Countries & Launch HiFi Subscription

Currently, Spotify does not allow customers to pay for subscriptions through Apple in-app purchases, and Spotify has been a very vocal critic of Apple's App Store policies, which included lodging a formal complaint with the European Union alleging anticompetitive behavior.

Furthermore, users won't be able to purchase Spotify podcast subscriptions through Apple, according to Business Standards.

Spotify has said it was going to test paid subscriptions for podcasters to allow them to offer exclusive content to subscribers, officially announcing that during its Stream On event in February. But there were no other details provided.

Meanwhile, in conjunction with Spotify's podcast subscription rollout, Facebook plans to launch its integrated version of Spotify's audio player called Project Boombox starting next week to provide access to songs and podcasts directly within the Facebook app.

That is part of a broader embrace of social audio and audio-messaging features that Facebook announced on Apr. 26.

Difference between Apple Music and Spotify?

With Apple podcasts subscriptions, Apple will keep 30% of podcast subscription fees in the first years and 15% in the following years, as is the case under existing Apple Store polices.

Also, creators must pay $19.99 a year to gain access to the Apple Podcasters Program, which includes tools required to offer premium subscriptions on Apple Podcasts. Pricing is set by creators and they can select which perks included with each plan.

As for Spotify, the company will let podcasters keep all the money from premium subscriptions on the platform.

At a high level, Spotify wants to make it as attractive as possible for creators to make Spotify their preferred platform, and to dissuade them from participating in Apple podcasts subscriptions.

Spotify's strategy is that it will attract more total listeners and monetize instead through ads and Spotify Premium paid plans.

Also, unlike Apple, Spotify is spending big bucks for exclusive podcast programming, ranging from Joe Rogan, Prince Harry, and Meghan Markle.

Spotify can also attract more partners by letting them keep all of the money from any premium subscriptions that they offer on the platform.

According to Spotify, its 2020 Q4 results showed that it raked in 2.2 million podcasts on the platform, and 25% of its total user base engaged with podcasts content. Also, the podcast consumption hours in Q4 almost doubled.

Spotify started off its podcast-growth initiative in early 2019, buying podcast studio Gimlet Media and Parcast along with podcast self-publishing platform Anchor, paying almost $400 million for them, with additional potential payouts over 4 years.

In 2020, Spotify bought The Ringer podcast by Bill Simmons for $200 million and bought podcast publishing and ad company Megaphone for $235 million, according to Variety.

Related Article: Spotify vs. Apple Music vs. YouTube Music: Which Is the Best Music Streaming Service For You?

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Written by Sophie Webster

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