Spotify announces paid subscription platform; increases Premium prices

Apple got on this wagon first, but the offer from Cupertino is far from practical for podcasters. Tim Cook and company will take a 30% commission for the first year, and 15% for the second, in addition to the $20 annual fee for membership. While this might be viable for big organizations, small creators may struggle to make money from the scheme.

Spotify fights back

Spotify's offer flips Apple's business model on its head. It won't take a cut from creators - at least for the the first two years. This excludes transaction fees. After the first two years of the partnership, Spotify gives a word to take only five percent of the revenue.

The program will be accessible and available through Anchor (app & website). Anchor is the podcast production platform that was acquired by Spotify about two years ago. It allows you to take your podcast from an idea to a finished product, all with just a smartphone. 

Now it will also allow creators to share exclusive content for subscribers. This can be in the form of a brand new episode or early access. If you aren't hosting your podcast on Anchor, don't worry - Spotify promises to open up the platform for those who host their podcasts elsewhere. More details will be available soon.

So, what about listeners? The way you'll be able to recognize paid content is by the lock icon next to the episode (if you aren't subscribed). This content will still be discoverable, similar to any other podcast episode, and it'll appear on the feed. From what we understand, the only way to start your subscription is to click on a link found on the show notes on Spotify or head directly to the podcast page on Anchor and sign up.

All of this will let you support your favorite podcasters, making sure the money goes directly to them. Then, Spotify promises to "maximize (creators') subscription audience and grow it from their existing listener base".

Spotify is going to support independent podcasters to get started with the subscription platform. NPR is on board with some ad-free content for paid subscribers. How I Built This with Guy Raz, Short Wave, It's Been a Minute with Sam Sanders, Code Switch, and Planet Money will be available as soon as May 4.

On the other hand, Apple's version is expected to debut in May too. The tech giant hasn't announced any exclusive shows or content just yet, but seems to have an advantage when it comes to global availability, as its platform will be out in 170 countries. Spotify's offer will be available only in the US for now. Plans for global expansion are already on the table, but they'll take a few months.

Price hike for Premium subscriptions

For listeners, you should bear in mind that Spotify announced a price increase for some of the Premium subscriptions for a few regions of the world. Spotify family is increasing from $14.99 to $15.99 per month in the US. The rest of the Premium offers remain untouched for now.

However, UK-based users won't be very pleased to find out that Spotify Student goes from £4.99 to £5.99 per month, Duo subscription from £12.99 to £13.99 a month, and Spotify Family plan (six accounts) goes from £14.99 to £16.99 a month.

Ireland and a bunch of countries in Europe are also part of the price increase. Student Premium goes up by €4.99 to €5.99, and Duo goes up from €11.99 to €12.99. The Family plan in Europe goes up from €14.99 to €17.99 per month. Some countries in Asia and South America will also be affected.

The changes come into effect on April 30. All existing Spotify subscribers in the US, Europe, and UK will have a one-month grace period before prices are automatically increased, meaning if you are already subscribed, the new prices will affect you from June, not May.