August 26, 2021
Three years ago, Spotify became a music distributor – announcing it was to allow independent artists to upload music to its service direct, without the need for a third-party aggregator.
Then, Spotify acquired a minority stake in Distrokid (which it still owns), while opening up its distribution function so that artists could upload to all major streaming services, via the Spotify platform.
This surprise severing of the music biz middle-man made a few senior label and distribution execs uneasy. Independent artists, though, were generally delighted – and free to dream that a more direct relationship with fans on Spotify might lead to two particularly sumptuous perks:
Alas, neither of these things happened. Spotify scrapped its plan to become a music distributor just ten months after announcing it.
(August 24), however, Spotify has launched these exact two perks for independent creators on its platform in the US.
Unfortunately, they’re not available to music artists. They’re only available to podcasters.
This has been made possible because Spotify owns the distribution mechanic between podcast listeners and podcasts themselves. The name of that distribution mechanic is Anchor, the podcasting upload and services platform which SPOT acquired back in Q1 2019.
From today in the US, podcasters can use Anchor to directly charge fans a subscription anywhere between $0.49 per month and $150 per month.
Spotify won’t take a bean of that subscription price (minus payment processing fees) until 2023, when the company says it plans to implement a 5% commission on subscription revenue.
Announcing the new podcast subscription launch on the Spotify blog today, the company noted: “We have long believed that creators should have a variety of options at their fingertips when it comes to deciding how to monetize their work.
“That’s why, as more creators than ever are now publishing their content on Spotify, we’ve begun rolling out tools that power those choices: from better advertising models to direct monetization from listeners.”
Spotify’s public launch of monetized subscription podcasts follows a beta test of the feature by the company across over 100 podcasts earlier this year.
Spotify says this test convincingly proved that podcasts “across genres and content styles have a massive opportunity to build paying subscriber bases”.
Creators in the US can now mark podcast episodes as subscriber-only in Anchor before publishing them to Spotify and other platforms.
Said creators are able to choose from 20 different monthly pricing options.
In addition, says Spotify – and this might cause the largest leap in envy amongst independent music artists – Spotify has also rolled out the ability for podcast creators in the US to “download a list of contact addresses for their subscribers so they can further engage with their subscriber bases and offer even more benefits”.
Spotify explained on its blog today: “We believe that offering subscriber-only content on Spotify, where it can be discovered by our user base of 365 million monthly listeners, will enable more of that content to gain audiences and make real connections with them.
“That’s also why we’re providing creators with contact information for their subscribers: We understand that creators want to own their relationships with listeners, and we intend to empower that.”
“THAT’S WHY WE’RE PROVIDING CREATORS WITH CONTACT INFORMATION FOR THEIR SUBSCRIBERS: WE UNDERSTAND THAT CREATORS WANT TO OWN THEIR RELATIONSHIPS WITH LISTENERS, AND WE INTEND TO EMPOWER THAT.”SPOTIFY BLOG
Spotify says it plans to expand podcast subscriptions to creators in other countries outside the US “very soon”. Before then, from September 15, international listeners will be able to gain access to (i.e. pay for) subscriber-only content.
Spotify generated €2.33 billion in total revenue in Q2 (the three months to end of June), up 23% year-on-year.
Music Business Worldwide