So, Is Apple Building a Netflix for Podcasts?
By Nicholas Quah@nwquah
This article first ran in Hot Pod, an industry-leading trade newsletter about podcasting by Nick Quah.
Photo: Justin Sullivan/Getty Images
There was a bit of a hullabaloo last Friday afternoon, when The Information’s Tom Dotan and Jessica Toonkel published a report stating that Apple is “discussing launching a new subscription service that would charge people to listen to podcasts, according to people familiar with the matter.” Dotan and Toonkel further report that talks are underway between Apple and production companies about this new subscription offering, but they also note there doesn’t appear to be a solid product timeline in place at the moment — and that, perhaps more importantly, Apple doesn’t always go through with ideas they kick around.
That said, there has been enough recent movement that suggests Apple is seriously considering something with respect to podcasts. Over the past year and a half, Bloomberg has published several reports on Apple’s activities with original podcasts, and though Apple was thought to have been a suitor for Wondery (which ended up going home with Amazon), the company’s adventures in podcast creation to date have chiefly been limited to exclusive productions meant to promote its other media businesses, whether it’s Apple Music (The Zane Lowe Interview Series) or Apple News (Apple News Today). Apple’s original podcast stuff has been fairly benign so far, but the thread of the company actually exploring a paid subscription service hasn’t been meaningfully established or signaled until now.
Here’s my take: I’m not entirely convinced a theoretical “Apple Podcast+” service would be a fruitful gamble for the company. A lot of this has to do with the fundamental puzzle of standing up a paid podcasting service more generally, which is ground I’ve covered plenty already, but I suppose it’s time to reiterate, update, and expand on a few things.
You have to start with the reality that nobody’s really figured out a Netflix-esque paid subscription service for podcasting just yet, which is another way of saying that audiences haven’t sufficiently expressed interest in that kind of relationship with podcasts … or that audiences haven’t been sufficiently conditioned to want to pay for a service that would serve them podcast-like experiences. For all intents and purposes, Luminary went nowhere, notable only for its achievements in raising investment money and driving headlines. Meanwhile, other examples that can be evoked — whether it’s Stitcher Premium or Quake Media — seem largely limited in their respective achievements. We simply haven’t seen meaningful efforts at a true podcast equivalent to Netflix or even something more genre-specific like Crunchyroll, Shudder, or the Criterion Channel.
When it comes to the concept of a paid podcasting service, we’re essentially talking about a venture in the business of extending the promise that it can consistently and perpetually beat the entire universe of free alternatives. This doesn’t necessarily mean that the venture needs to provide better programming than all available alternatives in the open ecosystem — that is, to be entrenched in the highly volatile hits-making business. It can also mean that the venture can simply opt for providing a better overall experience when it comes to interacting with on-demand audio in general. Consider one of the fundamental issues for new listeners trying out podcasts: They are made to navigate the full spectrum of options that spans millions and find content that means something to their given tastes.
To find meaningful comparative examples, you’d have to look at parallel industries: Audible with audiobooks, for instance, which I’ve often thought about as the lone counter-argument against the notion that people won’t pay for podcasts or on-demand audio. But even that comparison comes with caveats. The thing about Audible is that it’s not really in the media business but in the digital retail business, ultimately dependent on the book publishing industry for the actual work of creating the things people want to buy. Sure, Audible has pushed into the original content business over the past few years, but there hasn’t been much public evidence that Audible has been able to pull off original content development just yet.
Neither has Apple, for that matter. Consider Apple’s other media businesses that deal in original content. Apple TV+ might be a decent comp, but the state of that service is pretty ambiguous at this point. The last time the service’s user numbers were widely discussed, it was thought to be around 33 million, though researchers suspected the majority of those subs were not paid for but bundled in as part of a broader distribution arrangement. The fact that Apple just further extended Apple TV+ free trials until July 2021 doesn’t inspire much confidence on the user acquisition front. And hits? Outside of Ted Lasso, I can’t really think of a solid breakout, though I did moderately enjoy The Morning Show, and yeah, of course I’ll watch Sofia Coppola’s latest, but the portfolio doesn’t feel like something that can match up against the deep libraries of Netflix, Amazon Prime, and HBO Max or the gravitational pull of Disney+’s preexisting IP holdings just yet.
You might also look at Apple Arcade, the company’s premium mobile gaming service originally meant to curate critically and aesthetically pleasing games. That example is somewhat fraught. The service launched in September 2019 to positive fanfare, but it took less than six months for some corners of the gaming press to harbor doubts about Apple Arcade’s commitment to its original value proposition. Within that same time frame, some Apple observers began noticing that the service wasn’t being marketed as prominently any more, and by June 2020, there was a Bloomberg report finding that Apple had started canceling development contracts with game studios and shifting its overall creative strategy, with the company finding that its initial premium approach had yielded a service that wasn’t able to keep its users coming back.
And insofar as Apple Music might be a potential model, it makes for a fairly thin comparison. Apple Music’s programming is chiefly organized around one superstar talent, Zane Lowe, and there simply aren’t many planetary talents like that in podcasting. Some of them are already with Spotify.
I’m not saying that Apple shouldn’t do this. Let’s be real — who am I to say anything about a trillion-dollar corporation housed in a spaceship? I am but a humble blog boy. What I am saying, though, is that if Apple is truly considering building out a subscription podcast service, I hope it’s not a situation where that service might be built up at the expense of the existing Apple Podcasts infrastructure, whether that means crucial resources diverted away from that team or the plug being pulled entirely. Because that scenario has a very high likelihood of ending badly for everybody in podcasting. Apple Podcasts, after all, is the foundational pillar propping up open podcasting to this day, and that open ecosystem is itself the thing that’s already well proven its value to podcast creators, audiences, and advertisers alike.
But if this theoretical Apple Podcasts+ is meant to be a standalone complement, not unlike how Apple Arcade stands separate from the rest of the games section of the Apple app store … sure, why not? I get it: Podcasting keeps growing, and if you’re Apple, it definitely feels some kinda way that you’re not directly financially benefiting from all that growth, plus there are all these other platforms trying to benefit from this thing that you’ve helped cultivate all these years. It makes sense that you should definitely try something. I just don’t think it makes for a paid podcast service to be that thing.
On a related note… An Apple PR rep wrote in to tell me about Apple Podcasts Spotlight, a new monthly editorial feature on the platform meant to “celebrate rising podcast creators.” It should be visible on the platform sometime today.
I asked the rep if they had anything to offer about The Information’s report. They decline to comment. Womp womp.
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