If You’re Sick Of Mattress Ads During Podcasts, You Can Sleep Easy

If You’re Sick Of Mattress Ads During Podcasts, You Can Sleep Easy

Nick Cherrier is Zuora’s subscription strategist for ANZ. Here, he looks at Spotify’s new paid podcast subscription service and what it might mean for the wider subscription economy.

They hinted at it last year and now it’s a reality: Spotify has launched a paid podcast subscription service. They’re currently beta testing within their Anchor podcast creation tool, allowing creators (from the United States only at the moment) to publish podcast content aimed at fans who love the shows so much they’re willing to pay to listen. 

This is not a new concept and Spotify has made larger changes over the years, so why is it worth talking about? 

Well, Spotify isn’t any old subscription company; it is, along with Netflix, Salesforce and Microsoft a Subscription Economy flag-bearer. Today, it’s available in nearly 100 countries, has nearly half a billion monthly active users and as of the end of 2020 had 155 million premium subscribers. It has a market cap of more than USD $50 billion, making it Sweden’s third-largest company, ahead of Volvo and H&M.

This is not just an organisation making a relatively minor change to the way it operates – it’s one of the world’s great subscription companies making a small but potentially vital adjustment to an entire system of commerce. 

We live in a media golden age

At Zuora we talk a lot about what the Subscription Economy is and how it changes the way we take part in society – we talk about usership over ownership. And if there’s one industry that’s been changed more than any other by the subscription revolution, it’s media. 

In many ways, we’re now in a golden age of media: we have more music, movies, TV and entertainment to explore and more new voices to discover than ever before.

In the old world – the era of the Product Economy – the diversity of choice didn’t (and couldn’t) exist because media production and distribution was done almost entirely by just a few major publishers and studios. It wasn’t quite the gatekeeper system of the pre-internet news world, where proprietors and editors dictated what information punters did or didn’t see, but it was very close. 

These big players tolerated commercial ‘failure’ – the hits were intended to pay for the misses – but only to a very limited extent. If two movies in a row weren’t box office winners or two albums in a row weren’t hits, you got dropped.

What companies like Spotify made possible was a closer connection between a fanbase and an artist. What might once have been called a “cult classic” – something that flopped in cinemas, for example, but found a relatively small but hugely dedicated following later – is now considered a staple of the Netflix offering. 

The gatekeepers are dead – or are they?

Today everyone can be their own studio. It’s what’s become known as the Creator Economy, and it’s difficult to imagine it developing without the Subscription Economy as its breeding ground. 

That’s not to say, however, that this golden age of media, with its healthy segment of individual artists and independent development teams succeeding independently of large studios, has brought an end to the dominance of establishment institutions. Indeed, in its 2020 annual report, Spotify said that music from Universal, Warner and Sony (in addition to the independent music producer, Merlin Network) made up very close to 80 per cent of its musical streaming content.

This is a problem for Spotify (they still struggle to make a quarterly profit despite their monumental success). It’s also a problem for anyone like me trying to argue that power has substantially shifted under these new subscription-enabled arrangements.

But I’m not trying to convince you of some kind of massive “video killed the radio star” claim. All I’m saying is that even though the gatekeeper organisations remain influential, they are no longer the be-all-and-end-all entities they once were. They still guard the bridge, but many more creators than ever before are crossing without their go-ahead. And that’s simply because the Creator Economy lets them. As an artist or author, you can now connect with an audience through a conduit like Spotify (or Substack or Medium) and without the mediation, and crucially the approval, of a publisher or a studio.

Creating a stronger Creator Economy

And what Spotify is about to do, it seems, is to make that relationship between fan and creator smoother still – more direct than ever before. What their announcement means is that podcasters now have the opportunity to offer their shows as paid services through a Subscription Economy powerhouse.

That’s exciting news if you’re sick of strange mattress ads interrupting your favourite discussion of footy, politics or 1990s basketball shoes. It’s also promising if you followed our latest End of Ownership survey that revealed more than three out of four Australian adults (78 per cent) now have at least one subscription service, up from 67 per cent in 2018.

Spotify changed music consumption for the better, bringing about a golden age for audiophiles and audio-inclined creators. This step may seem small in the scheme of things, but it’s one more move towards an evermore decentralised system where fans have much more power and creators reap the benefits.


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