As platform decay seeps into main tech platforms and microcultures proliferate throughout the web, feature development becomes less about building native tools and more about third-party integrations. For content material platforms which are constructed upon offering entry to infinite provide, new wells should be tapped within the gated communities that spring up.
For Spotify, replenishing the podcast effectively from each filtered and unfiltered faucets means offering entry to in any other case paywalled content material from Bankless, Dateline NBC, The Economist, Freakonomics Radio, Patreon, Supercast, Supporting Solid, The Wall Road Journal, and now … Substack.
Although Spotify allows podcasters to set up native direct-to-fan subscriptions, it’s unclear how a lot podcasters truly make by way of using this function. Judging by Spotify’s continued integrations with exterior subscription platforms, neither podcasters nor Spotify itself are making sufficient from direct subscriptions to justify retaining issues homegrown. It’s a totally different story with Substack.
In response to Substack, podcasters are now bringing in $100 million a year through direct subscriptions on the platform. If that determine is correct, it means paywalled podcasts on Substack already generate greater than a 3rd as a lot income as Spotify’s podcast-related promoting, in line with MIDiA’s Global Podcast Forecasts. Importantly, Substack is producing that income with a fraction of the person base: Substack only has 3+ million users who subscribe to paid content whereas Spotify has 200+ million Premium subscribers and 300+ million ad-supported users.
Featured Report
Radio WAUs
Blurring broadcast lines
Introduction The radio business has historically thought by way of month-to-month audiences and attain slightly than engagement. It’s time for the radio business to start out considering by way of weekly engagement…
The disparity in person quantity and income quantity comes from inverse incentives between the 2 platforms. On Substack, it’s message over medium; on Spotify, it’s medium over message. Substack customers subscribe to content material, and expertise is a way of supply. Conversely, Spotify customers subscribe to expertise, and content material is a way of retention. In principle, Substack makes more cash when its customers make greater high quality content material. Spotify makes more cash as long as content material amount will increase.
Because of these inverse incentives, Substack represents a mannequin for complementary cross-format content material: customers devour written, audio, and video iterations of the identical content material (totally different mediums with the identical message). Spotify represents a mannequin for aggressive cross-format content material: customers devour music, podcast, and video content material coming from disparate sources (totally different messages coming from totally different mediums). There isn’t a “proper” option to go about monetising cross-format content material; nevertheless, audio substitute threat is way more of a threat with Spotify’s method, and that makes deep viewers engagement way more tough for creators on the platform.
When a person opens the Spotify app, they could hearken to a brand new track or the newest episode of their favorite podcast — however it’s inconceivable for the person to do each on the similar time, and every bit of content material is probably going unrelated, that means consideration is diluted for every creator. When a person opens the Substack app, they could learn a brand new put up after which hearken to a brand new podcast episode from their favorite publication, with every bit of content material reinforcing the opposite — arguably magnifying consideration on the creator.
However the two — the broad attain of Spotify and the deep engagement of Substack — usually are not mutually unique for a podcast creator. In truth, it’s essential that they work in tandem, particularly as integrations like this turn out to be extra widespread. Substack could by no means attain the size of Spotify, however in some essential methods, the platform is already positioning itself because the Bandcamp for podcasting. And that’s what makes Spotify’s transfer to combine Substack into its Spotify Open Access suite indicative of the place podcast monetisation goes from right here. Somewhat than podcasters counting on a one-size-fits-all method to income and advertising, a portfolio method to monetisation shall be key.