Spotify unveils subscription platform for podcasts

Spotify on Tuesday launched its new subscription podcast platform that gives creators the ability to create podcasts exclusively for paid subscribers on and off Spotify.

Why it matters: The move follows Apple's announcement last week that it has launched a new podcast subscription service within Apple podcasts.

• Spotify's subscription podcasts feature rolls out in the U.S. today, and will expand internationally in the coming months.

The big picture: Financial returns on investment in podcasts have yet to be fully realized for most creators, as Axios has previously reported.

• In order for podcasts as an industry to grow, the biggest podcast companies need to invest in more ways to help creators get paid.

How it works: Creators using Spotify's podcast creator platform Anchor will be able to mark episodes as subscriber-only and publish them to Spotify and other podcast listening platforms, the company said in an announcement Tuesday.

• For the next two years, being a part of this podcast creator program will be free for podcasters, meaning they can pocket 100% of their subscriber revenue, excluding payment transaction fees. Starting in 2023, Spotify says it plans to introduce a 5% fee for access to the monetization tool.
• Within Spotify, podcast subscription content will be searchable and discoverable just like any other podcast episode in the app.
• The company is launching the feature with 12 independent podcast creators, and will open up the platform to more creators on its waitlist in the coming months. 
• One of those publishing partners is NPR, which will publish a selection of their shows sponsor-free for paid subscribers.

Flashback: Spotify first teased these new investments in February when it unveiled tools to help creators on its platform develop more interactive shows.

• At the time, Spotify said it had tripled the number of podcasts on its platform in past year from 700,000 in Q4 2019 to 2.2 million in Q4 2020.

The bottom line: For Spotify, investments in podcasts are meant to boost overall subscriber engagement on its platform. Podcasts and podcast usage are "highly correlated to user attention and growth" overall on Spotify, Spotify CEO Daniel Ek told investors in February.

Go deeper: Spotify debuts new tools for creators to make interactive podcasts