As platform decay seeps into main tech platforms and microcultures proliferate throughout the web, characteristic growth turns into much less about constructing native instruments and extra about third-party integrations. For content material platforms which can be constructed upon offering entry to infinite provide, new wells need to be tapped within the gated communities that spring up. 

For Spotify, replenishing the podcast nicely from each filtered and unfiltered faucets means offering entry to in any other case paywalled content material from Bankless, Dateline NBC, The Economist, Freakonomics Radio, Patreon, Supercast, Supporting Solid, The Wall Road Journal, and now … Substack. 

Although Spotify permits podcasters to arrange native direct-to-fan subscriptions, it’s unclear how a lot podcasters really make by way of the usage of this characteristic. Judging by Spotify’s continued integrations with exterior subscription platforms,  neither podcasters nor Spotify itself are making sufficient from direct subscriptions to justify maintaining issues homegrown. It’s a totally different story with Substack.

Based on Substack, podcasters are actually bringing in $100 million a yr by way of direct subscriptions on the platform. If that determine is correct, it means paywalled podcasts on Substack already generate greater than a 3rd as a lot income as Spotify’s podcast-related promoting, in response to MIDiA’s World Podcast Forecasts. Importantly, Substack is producing that income with a fraction of the consumer base: Substack solely has 3+ million customers who subscribe to paid content material whereas Spotify has 200+ million Premium subscribers and 300+ million ad-supported customers.

The disparity in consumer quantity and income quantity comes from inverse incentives between the 2 platforms. On Substack, it’s message over medium; on Spotify, it’s medium over message. Substack customers subscribe to content material, and know-how is a method of supply. Conversely, Spotify customers subscribe to know-how, and content material is a method of retention. In concept, Substack makes more cash when its customers make larger high quality content material. Spotify makes more cash as long as content material amount will increase.

Because of these inverse incentives, Substack represents a mannequin for complementary cross-format content material: customers eat written, audio, and video iterations of the identical content material (totally different mediums with the identical message). Spotify represents a mannequin for aggressive cross-format content material: customers eat music, podcast, and video content material coming from disparate sources (totally different messages coming from totally different mediums). There is no such thing as a “proper” approach to go about monetising cross-format content material; nonetheless, audio substitute menace is way more of a danger with Spotify’s strategy, and that makes deep viewers engagement way more troublesome for creators on the platform. 

When a consumer opens the Spotify app, they could take heed to a brand new track or the most recent episode of their favorite podcast — however it’s unattainable for the consumer to do each on the similar time, and every bit of content material is probably going unrelated, which means consideration is diluted for every creator. When a consumer opens the Substack app, they could learn a brand new put up after which take heed to a brand new podcast episode from their favorite publication, with every bit of content material reinforcing the opposite — arguably magnifying consideration on the creator.

However the two — the broad attain of Spotify and the deep engagement of Substack — will not be mutually unique for a podcast creator. In actual fact, it’s vital that they work in tandem, particularly as integrations like this grow to be extra widespread. Substack could by no means attain the dimensions of Spotify, however in some vital methods, the platform is already positioning itself because the Bandcamp for podcasting. And that’s what makes Spotify’s transfer to combine Substack into its Spotify Open Entry suite indicative of the place podcast monetisation goes from right here. Somewhat than podcasters counting on a one-size-fits-all strategy to income and advertising and marketing, a portfolio strategy to monetisation might be key.