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Comment by hombre_fatal | Hacker News Reader

If Spotify can figure out how to make podcasters real money and save them from begging for donos/Patreon/subs on every episode, it's going to make big waves in the space.

Spotify annoys us, being used to free and open things on the hobbyist's dime, but as we smugly advise on HN when it's convenient for us: sometimes you need to shake up the business model. That's what Spotify might be able to pull off for podcasters.

Not sure it will ruin anything, though. The people who prefer to beg for donations in their podcast episodes are always free to do it. Our unwillingness to support content creators is what ruins things and puts everything behind an explicit paywall.

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Spotify managed to make musicians abismimal returns, why would it work any differently for podcasts?

Podcasters make abysmal returns today. If Spotify can pay them more than they make today while offering listeners an ad-free experience, that seems like a win-win-win.

I don't really think that's true. If you have a popular podcast like ATP, based on their ad rates, they're pulling in well into the six figures, for each host. Obviously that took years and years of work and an existing reputation, but it's not impossible.

I'll definitely emphasize the "if" in "if Spotify can pay them more" - I don't know what share of podcasts, if any, could be monetized more effectively through a paid subscription platform like Spotify than through ads. ATP is about the last podcast I'd expect to be in that boat because their subscribers are such high-value advertising targets, so I don't think they're representative.

For a generic or small following podcast, this could be a game changer. For the established or top 10 podcasts in a genre, it won't sway them from being on as many platforms as possible while directing listeners to their merch/patreon/etc.

Spotify going into podcasts will be like uber in the early 2010s, it'll make a handful of people decent returns while they burn through their cash hoping for dominance. If they achieve dominance they'll start the squeeze, if they don't they'll just dump the market.

What makes you say ad-free? Not even paying customers get ad-free podcasts on Spotify.

Wishful thinking, mostly. But Spotify seems like the most likely path to non-ad-based monetization of the “bottom 90%” of podcasts, despite the fact that Spotify isn’t currently going down that path.

I'd pay a higher subscription price if Spotify could get me my podcasts without ads.

Most podcasts do ad reads in the show, and that's usually how they make their money.

And which is not something Spotify will change. Did you read the article? It goes into detail about that, the only thing that would probably change here is that the ads won't be read by podcasters anymore but inserted by Spotify ad-tech. They can't pay podcasters without getting a lot more money than they get from current subscriptions, they are still loosing money on their music subscription service. That's the entire point of their podcast pivot. Make more money. They have no money to hand out to podcasters. Podcasts won't be ad-free on Spotify, no matter if you're paying or not.

It's been a huge benefit to consumers though. I can listen to more music than I can think of, and the price of it is almost nothing.

Stealing music is also GREAT from the consumer perspective, and the artist makes approximately as much money as they do from a Spotify stream.

Yes, but with the rise of streaming, artists have changed where they get their revenue from. Gig tickets feel far more expensive now, but this way people are able to legally listen to and discover SO much more music.

Spotify pays more per listen than radio or YouTube.

That still sounds like a bad model for paying artists. If I sign up for Spotify and only listen to a few artists I'm fond of, those artists get next to nothing of my subscription fees. Instead I'm subsidizing the payouts to artists like Drake. Who I have nothing against, I'm just not listening to his work.

I'm pretty sure Spotify does pay artists a fraction of the subscription revenue, based on the number of listens relative to other artists.

That’s the problem. The subscription fees should go towards what one listens not average over all artists or some other kind of formula spotify came up with. This could be like micropayemnts and i think would change the dynamics quite a bit

I've always wondered why it isn't done like this. It doesn't seem like it would make a difference to Spotify. Is it the record label forcing the current model?

Exactly. People complain how little it pays but forget that they're just a drop in the stream of how much people are listening to.

The best case to expect is an average Spotify user listens to about 500 songs a month (25 hours) and has an ARPU of about $5 (https://techcrunch.com/2019/07/31/spotify-108-million/). There cannot possibly be more than $0.01 (1c) per play available to pay the artists. Spotify paying out 37% of that actually looks pretty good.

That's as high as the users will go, it seems; the equilibrium point against piracy or other music services.

Do they actually pay per listen? I thought they used one of those bullshit, gameable-by-default algorithms of your song streamed relative to all music streamed on the platform.

And a third Tidal and a fraction of album sales. They are the worst-paying of the major music streaming services.

Tidal, the one that was having financial troubles right?

And who buys albums nowadays? I made some digital download purchases, but now they don't make much sense.

Smaller artists get paid less on Spotify but bigger artists get paid more (not sure about the details)

I buy albums, at concerts and online, and I tend to prefer artists who can actually put together a whole album of music worth listening to. I have little patience for Spotify's exploitative pricing model.

> They are the worst-paying of the major music streaming services.

Per play, yes, not in total. But they compensate by getting artists a lot more plays than others.

But significantly less than CD sales used to.

> Spotify managed to make musicians abismimal returns

I think that's very subjective. Spotify pays musicians the equivalent of what a user would actually pay the musician, which is basically nothing. We are to blame. As OP said:

> Our unwillingness to support content creators is what ruins things and puts everything behind an explicit paywall.

That's 100% true with most users. It has to be a very small % of users that will actually go out and purchase music that doesn't exist on Spotify for free/apart of their subscription. At the end of the day, the users just don't want to support content creators. Spotify isn't to blame for that.

> Spotify managed to make musicians abismimal returns, why would it work any differently for podcasts?

There needs to be some reason for podcasts to move from where they are currently to Spotify. That reason is generally more listeners, more money or both.

I can't imagine my favorite podcasts taking spotify revenue seriously unless spotify also moves in on patreon.

> The people who prefer to beg for donations in their podcast episodes are always free to do it.

As opposed to what, an advertiser like Casper or Harry’s begging for your purchase?

I don't have to make a living as a musician or podcaster, so can't comment on that perspective. What I do know is that greed changes things. If someone convinces you that you need to make "real money" from something you used to enjoy doing for free, it affects the content you produce. Sure the production quality may improve a lot, but is the music or story better than it was before?

Will spotify provide this value by standardizing on some extension of RSS that will make add personalization better, and provide optional usage reporting?

OR, will spotify provide this value by throwing out the open standard of RSS and providing a closed system they fully control?

A benevolent player could take the first route, working with RSS to do better adds in podcasting without destroying the eco-system. They'd leave some money on the table for themselves, because they'd actively choose not to get a monopoly. But it would undoubtedly be better for everyone else.

It's funny how split podcast genres are. Some shows require huge budgets, travel, audio design, and months of research, and then they fare worse than 3 funny white dudes talking extemporaneously every week. It's also baffling how much money got pumped into companies like Gimlet without a revenue strategy beyond Casper mattresses and the other typical ads.

Altogether, I think people who enjoy the long-form productions should be excited by this additional attention, but anyone who has been listening to off-the-cuff shows (like me) will have to get used to the shifting ecosystem. Hopefully content creators can adapt to the shift towards "Quality over quantity"

I'd like to hope everyone gets a paycheck equal to their worth in the new world of podcasting, but I'm more realistic than that...

ad revenue seems to be good for some podcasts. of course it won't work for very small ones, but I think that once you reach ~10k downloads/episode you can start selling ads

I don't mind having my content behind a paywall. What will suck is not being able to download them in advance and listen anywhere, and being forced to use the Spotify player rather than selecting the one that best suits me from a large set of players with different feature sets.

Lol, brah, you don’t scale by giving away money!

“Unwillingness to support content creators”

We are under absolutely NO obligation to support them. They like to talk. We may or may not like to listen. They are the digital equivalent of HAM radio operators, and Spotify is acting like worse than a leech on a free and open system.

This "steadfast denial that we live in a society" thing is getting pretty old.

> They are the digital equivalent of HAM radio operators

That is really overlooking a lot of time, effort, and money that many people and companies put into their podcasts. A lot of the best journalism and story telling in the world is in podcast form right now. That won't be the case for very long if the creators can't monetize their work.

Are you asserting that HAM radio operators do not put a lot of time, effort, and money into HAM radio?

Do HAM radio operators write scripts, pay people to appear, generally...put on entertainment? I’m genuinely asking. I thought HAM radio was mostly chatting, or occasionally broadcasting useful info during a disaster.

Also: note that restricting entertainment to that which is provided for free is a big restriction.

>They are the digital equivalent of HAM radio operators

this isn't really accurate any more. A lot of podcasts these days, in particular, the ones Spotify seems to pick up, are professionally produced audio dramas or documentaries that come with significant cost.

Look at some of the more popular ones like Homecoming with Oscar Isaac, Blackout with Rami Malek or Carrier with Cynthia Erivo, those guys and the teams behind it don't work for free.

Even seemingly low-budget podcasts take a lot of work to put together. I used to do a 30-minute weekly tech news podcast with a friend. For that, I spent several hours each week clipping news stories, then another couple of hours picking the best ones to cover, reading more about them and taking notes for the podcast.

After the podcast was over, it took about an hour or two to listen through carefully and edit the podcast down to something pleasant to listen to, removing the crosstalk, pauses, weird noises, and things I wish we hadn't said.

People who care more about their podcasts and have longer podcasts spend much more time researching and editing. That time has a lot of cost, especially for people with demanding jobs and families.

Even the most selfish "podcasts should be free for me!" person should be able to understand that they also benefit selfishly when people can make a living making the content they prefer instead of hoping a hobbyist has free time to do it. But this isn't always so.

Imagine all the books that never would have been written if we seriously thought free Reddit r/writingprompts fiction should be good enough for anyone. "Fiction should stay open and free!"

No one is suggesting that you're obliged to pay for the media you consume. You just have to understand that podcasters aren't obliged to provide free media.

Producing podcasts costs money. If listeners aren't paying for the costs, someone else has to. If the podcaster can't afford to pay these costs, they'll end up going to someone like Spotify rather than bankrupting themselves for our entertainment.

Spotify is thinking like Netflix... They are in the business of taking your attention, and spoken word audio is a more cost effective means of doing that.

Look at all of the money made in the 90s Premier Radio Networks, Westwood One, etc. They aggregated content ranging from conservative babble to psychology shows to Art Bell and did very well. Podcasts could be a similar phenomenon as radio dies out.

Eventually AM and FM radio will be auctioned off to cellular carriers, and networks like Spotify will take over. The current podcast ecosystem only exists due to the benevolent dictatorship of Apple. That can go poof any day.

And podcast creators have no obligation to not sell themselves to Spotify...

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