Apple dominates the podcast market. But for how long?

Competitors such as Spotify are making investments to creep closer to Apple.

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Apple

If you aren’t someone who is part of the podcast business (disclosure: I make the majority of my income from podcasting), you might not realize that Apple is the dominant player in the field. That dominance is driven by two factors: its definitive directory of podcasts, and the built-in iOS Podcasts app, which drives the majority of podcast listening on the planet.

The slow shift from radio to on-demand audio continues, and companies are noticing. Investment in podcast companies is up, listening is growing, and the podcast advertising market continues to expand. Yet despite its dominance, Apple seems strangely uninterested in podcasting.

It started with the iPod

Apple reached this point because in 2005 it noticed that people were going to great lengths to load the first podcasts onto its iPod music player, and decided to make some effort to make the process easier. Apple released a new version of GarageBand with additional podcast-focused features, created a directory of podcasts using the iTunes Store framework, and updated iTunes to support podcast subscriptions directly. You still had to attach your iPod directly in order to download new episodes, which was not the best, but it beat the old method of loading podcast audio files into iTunes, marking them as songs or audiobooks, and syncing them manually.

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In 2005, iTunes 4.9 allowed for podcast subscriptions. Then you could load the content to an iPod.

The brief podcast boom of 2005 didn’t really go anywhere, but it put Apple in the perfect position in the early days of the iPhone. Here was a device that could update podcasts on the fly, and Apple eventually got the message and built its own podcast app. Nobody else had succeeded in replicating the iTunes podcast directory, and all of a sudden Apple was the biggests player in a growing media industry.

In the intervening time, Apple has not done a lot with podcasts. GarageBand’s long since been stripped of all its podcast-focused features. The Podcasts app on iOS keeps getting better, and Apple recently added some anonymized statistics so that podcast publishers can now get rare access to information about how many people are listening to their podcasts, and what parts of the episodes they listen to. (The data is limited by the fact that it is only for Apple’s own app, but it’s still a treasure trove of data that has told us... exactly what we all expected, which is that most people listen to most episodes of a podcast, and only a small percentage skip the ads.)

The rise of the rest

Meanwhile, the world is full of companies that are far more focused on podcasts than Apple is. Companies affiliated with public radio stations in the U.S. have pounced on the medium, which has given them access to new and large audiences for their work. Many startups have been launched to produce, distribute, and sell ads on podcasts.

One of the more recent trends is a desire for even more statistics about how people listen to podcasts. Sales executives spoiled by the nitty-gritty details of web advertising are frustrated by the fact that, with the exception of statistics from apps such as Apple’s Podcasts, there’s no good way to tell anything beyond when someone downloads an episode. They want more. Recently, National Public Radio promoted something called RAD, a specification that would relay information about how you use your podcast app back to the publisher for data-collection purposes.

It seems like a tough sell to the makers of podcast apps—they’d have to do a lot of engineering work in order to support something that would not really benefit their users while diminishing their privacy. Apple’s insistence on anonymizing user statistics  would suggest that it wouldn’t embrace a system as broad as RAD. But the push on behalf of more invasive advertising metrics is on, regardless.

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Spotify has made a large investment into its podcast presence.

On another front, Spotify is buying up companies such as the Gimlet Media podcast studio, and Anchor, a maker of tools to make and distribute podcasts more easily. Spotify uses its own directory, not Apple’s, and apparently is planning on spending half a billion dollars on podcast-related companies (including Anchor and Gimlet).

Spotify, Apple’s archrival in music streaming, has decided that podcast listening is a logical extension of what they do—and has realized that the more minutes someone spends listening to podcasts, the less money Spotify needs to pay in music royalties. Presumably it will introduce some Spotify-exclusive podcasts, too, which will give it leverage to induce people to use Spotify, something it can’t really do with the music catalogs that are largely the same across services.

So where’s Apple?

With all of this going on, Apple is quiet—and there aren’t even rumblings about Apple’s plans in this area. Apple’s competitors are on the march, the industry is heating up, and Apple seems to continue to treat podcasts with the hands-off approach it’s had since the very beginning.

On one level, it’s admirable that Apple has not exploited its huge influence in and leverage over the podcast market. It’s allowed the podcast world to thrive in a largely open environment without rent-seeking from major players that would crush innovation. Apple has been an advocate for podcasts without trying to control them.

And yet, with Spotify on the move, I have to wonder if Apple is going to need to take a more active approach in this area. The economics driving Apple Music and Spotify are quite similar; I’m a bit surprised Apple hasn’t invested in premium, subscriber-only audio content (because if it’s subscriber-only it’s not really a podcast) for subscribers of Apple Music. We hear about Apple spending billions on video content for its new streaming service, but not a peep about Apple using its power in podcasting to boost Apple Music or at least keep Spotify’s expansion at bay.

The truth is, podcasting just may be too small a market to get Apple’s interest right now. When you’re spending more than a billion dollars on TV shows, the idea of spending a few hundred million to buy a studio like Gimlet seems like chump change.

Viewed more broadly, Apple’s ambitions are in markets that are enormous, far larger than the entirety of the podcasting world. Apple is a dominant player in podcasting, but within Apple podcasting is the focus of a very small team in a far-off corner of Apple. That team really cares about podcasting and does some very good work, but they are little fish in the enormous ocean of today’s Apple.

Maybe it’s all for the best. There aren’t too many examples of enormous tech companies opting not to take advantage of their dominance in a market. Perhaps Apple’s light touch on the world of podcasting will continue, at least until a competitor does something to get its attention.

[Updated March 1 at 11:50 a.m. to correct nature of Apple's data collection, which does not require user opt-in.

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