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I figured they were taking advertising money to fund both their work on the the app itself (which is free) and for maintaining the server infrastructure that allows them to stream quickly (which can't be cheap to them).

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Which would be an appropriate arrangement of it was their content. But it isn't. Would you be willing to pay for those two products without the podcasts themselves? Of course not, the app and the servers are valuable to a consumer because of the content. If the content creators don't get a cut of that advertising money then the business model isn't fair.

Not to mention that stitcher removes any editorial control over the kind of advertising associated with any given program.

Sure. At the same time it is all of the content on Apple's own iTunes servers that gives value to those servers, and Apple uses that value to sell more hardware. Are podcast creators getting a cut of that? If not, then why might they think that business model is fair?

Edit to reply to below: that has been the case for the download model. How certain are you that this is still the case for the streaming model of this app? Have you sniffed the traffic?

Podcasts aren't hosted on apple's servers. iTunes simply links to them, without ads.

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