The podcast skirmishes may be turning into an all-out war, now that a once-neutral player appears to have taken a side. 

Apple is planning to fund exclusive, original shows for Apple Podcasts, which is already the biggest provider of the downloadable programming, according to Bloomberg News. Up to this point, podcasts on Apple’s service have been agnostic with respect to creator.

The move would mark Apple’s first big financial commitment to podcast content, and could stifle No. 2 rival Spotify and smaller startups trying to find their foothold in the quickly developing market.

Apple “has yet to outline a clear strategy” but it “plans to pursue the kind of deals it didn’t make before,” meaning direct investments into content, unidentified sources told Bloomberg. 

Apple has given no indication of which content producers may be involved, Nicholas Quah said in the most recent issue of his podcast industry newsletter Hot Pod. The impact of any deals would depend on the weight of Apple’s partners.

“A deal with, say, an indie production studio like Pineapple Street and Neon Hum has very different ramifications compared to a deal with NPR, Radiotopia, iHeartMedia, Rooster Teeth or Wondery,” Quah wrote. 

What is unclear is whether Apple would pursue exclusive streaming rights to established shows or bankroll completely new projects. 

Regardless, Apple’s core business is hardware — specifically, the iPhone where most podcasts are played. Its recent ventures into content like television, games and news are seen as efforts to diversify as iPhone sales stall.

Effects on the Industry

Apple, which essentially launched the podcast business with Apple Podcasts, has lately paid it more attention as ad revenue takes off. Annual podcast ad revenue in the U.S. soared 53% to $479 million last year. 

“There was no podcast industry until they created the app. It was very scattered,” Chris Bannon, chief content officer of Stitcher, told Karma. “I don’t think they will willingly let go of that ‘podfather’ role.”

After not tinkering much with the podcast business since its 2005 founding, Apple has in the last year rolled out enhanced analytics for creators and made the programs available through a web player. 

Those moves may have been signaling that the company recognizes the power it wields. The alleged original programming move may help it distance itself further from rivals. 

Apple Podcasts accounts for 52% of the listener market, according to data from the Spotify-owned distribution startup Anchor. That’s more than any of the other platforms combined, and it’s without a single original show.

Spotify has 19% of the market, grabbing market share through an aggressive push over the last year or so. The Swedish company started 2019 with a podcast acquisition spree, buying up Anchor, Gimlet Media and Parcast in less than two months. It has since added a Podcasts tab within its app and web player to enhance discoverability. 

Unlike Apple though, content is a key part of Spotify’s podcast plan. The platform has funded shows from comedian Amy Schumer, journalist Jemele Hill and popular NPR podcaster Guy Raz, and even inked a podcast content deal with former President Barack Obama and Michelle Obama’s production company, Higher Ground.

While Spotify may have enough of the market to stay competitive, a move by Apple into original content likely would have the biggest effect on smaller independent startups such as Luminary or Podimo, who have been trying to crack the code on paid podcast subscriptions.

The smaller companies won’t be able to compete against Apple Podcasts’ domination, its status as the world’s most valuable brand, according to Forbes, and 2 billion iOS devices reach. They may be forced to pivot away from subscription models to a more generalized podcast network that lists their shows on open distribution avenues — including Apple Podcasts.

Still, Apple’s move may provide the indies with opportunities to grow, by casting a brighter light on the industry and bringing in more listeners.

“I assume their decision to make exclusive content is going to drive more consumers to the medium, which I think will be good for all of us,” Bannon said. “They have the power to get people to pay attention.”