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Podcast Subscriptions vs. the App Store

 

Podcast Subscriptions vs. the App Store

Courtesy of Ben Thompson, originally posted Stratechery

There was a bit of a brouhaha a couple of weeks ago when Senators Amy Klobuchar and Mike Lee sent a letter to Apple accusing the company of failing to provide a witness for the App Store-focused antitrust committee hearing that is happening later today; Apple responded that it was all a misunderstanding due to a scheduling conflict. From Bloomberg:

“We have deep respect for your role and process on these matters and, as we told your staff, we are willing to participate in a hearing in the subcommittee,” Apple said. “We simply sought alternative dates in light of upcoming matters that have been scheduled for some time and that touch on similar issues.”

It seems likely that Apple was referring to Epic’s lawsuit against Apple and its App Store policies, which goes to trial on May 3rd; the Senators’ letter said as much. The fact this hearing is the day after an Apple event, though, is notable in its own right, given how Apple itself just highlighted where the App Store goes wrong.

iTunes 4.9

Apple Podcasts received 75 seconds of attention in Apple’s one hour and one minute presentation; it seems appropriate that 20 of those seconds were spent recounting Apple’s role in popularizing the format:

The 2005 release of iTunes 4.9 and the iTunes podcast directory was indeed a critical step in popularizing podcasts. I explained in 2017’s Podcasts, Analytics, and Centralization:

Centralization occurs in industry after industry for a reason: everyone benefits, at least in the short term. Start with the users: before iTunes 4.9 subscribing and listening to a podcast was a multi-step process, and most of those steps were so obscure as to be effective barriers for all but the most committed of listeners.

  • Find a podcast
  • Get a podcatcher
  • Copy the URL of the podcast feed into the podcatcher
  • Copy over the audio file from the podcatcher into iTunes
  • Sync the audio file to an iPod
  • Listen to the podcast
  • Delete the podcast from the iPod the next time you synced

iTunes 4.9 made this far simpler:

  • Find a podcast in the iTunes Store and click ‘Subscribe’
  • Sync your iPod
  • Listen

Recounting this simplification may seem pedantic, but there is a point: this was the most important improvement for podcast creators as well. Yes, the iTunes Music Store offered an important new discovery mechanism, but it was the dramatic improvement to the user experience that, for the vast majority of would-be listeners, made podcasts even worth discovering in the first place. Centralized platforms win because they make things easier for the user; producers willingly follow.

And then Apple stopped. Yes, the iPhone happened, and podcast management and listening was further centralized into a single app, but given that Apple’s goal was only ever to sell more iPods (and then more iPhones) the company never pursued centralization to its logical conclusion:

Remember, the web was thought to be a wasteland for advertising until Google provided a centralized point that aggregated users and could be sold to advertisers. Similarly, mobile was thought to monetize even worse than the (desktop) web until Facebook provided a centralized point that aggregated users and could be sold to advertisers. I expect a similar dynamic in podcasts: the industry will remain the province of ads for web hosting and underwear absent centralization and aggregation, and the only entity that can accomplish that is Apple.

In fact, it was Spotify that identified the vacuum that Apple had created, aggressively expanding its podcasting business in an attempt to displace Apple’s Aggregator position; eMarketer predicts the streaming service will surpass Apple later this year in podcast listeners. Spotify is pursuing a multi-pronged strategy ranging from exclusive content to open podcast hosting to targeted advertising, and the company’s actions not only promise to dramatically increase podcast monetization but have also stirred Apple to action.

Podcast Subscriptions

The company’s initial response came in the remaining 55 seconds:

Paid podcasts are not a new concept; Stratechery launched a paid version of the Daily Update last February, and Dithering (where we covered Apple’s other product announcements this morning) last May…

Continue at Stratechery >

 


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