The big picture: With flat iPhone sales, Apple has been looking towards content and services for the potential to squeeze more revenue from a loyal userbase. The company plans to expand into podcasts, presumably as a way to prevent people from flocking to Spotify or other alternatives. Competition is beneficial for consumers, but a focus on exclusivity can lead to content silos that require people to pay for several subscriptions.
After getting Apple Music to grow faster than Spotify, the Cupertino giant is planning to go one step further and fund its own exclusive podcasts, according to a Bloomberg report. Apparently it's also reached out to media companies, breaking a tradition of shying away from such deals, but discussions are still at an early stage.
While Apple Podcasts already has the largest slice of the podcasting market (more than 50% of the total listeners), the company has never tried to monetize in any way, opting to curate lists and highlight great shows instead. With the launch of macOS Catalina this fall, iTunes will be broken into three separate apps, of which Apple Music and Apple TV are already tied to subscription services.
With Podcasts now a standalone app, it seems almost inevitable that Apple would eventually add its own original content as a way to capture and retain listeners, a strategy that's worked well so far with Apple Music. Bloomberg says the company is looking to stifle the momentum of companies such as Stitcher and Spotify who recently rolled out their own exclusive content to premium users.
Today's news has already caused a dip in Spotify's valuation, who has spent $500 million on podcast networks like Gimlet Media and Parcast, as well as popular podcasting tool Anchor in an effort to funnel in as many listeners as it can on top of its existing 100 million paying subscribers.
If recent history is any indication, Spotify will take a strong public stance against such a move, if it does happen. The company filed an antitrust complaint against Apple earlier this year, arguing that its ecosystem is set up in a way that puts competing streaming services at a disadvantage on the company's platform.