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Stitcher’s app closure asks – who will build the premium podcast experience?

Cover image for Stitcher’s app closure asks – who will build the premium podcast experience?

Photo: Tim Mossholder

Photo of Annie Langston
by Annie Langston

In August, SiriusXM plans to close its podcast platform, Stitcher. Launched in 2008 and acquired by SiriusXM in 2020 for $325 million, Stitcher offered both free podcast listening and a subscription for ad-free podcast listening. Now, SiriusXM wants to funnel this audience to its SXM App to consolidate its userbase. For SiriusXM, closing Stitcher creates an opportunity to promote a more expensive subscription to its users — but as it gets rid of the ad-free podcast benefit, it comes at the risk of losing listeners. 

Paying to listen to podcast ads 

In the wake of the podcast-investment boom, streaming platforms are struggling to effectively monetise podcasts. The main focus has been advertising, but the economic downturn and lack of detailed podcast analytics are stunting growth. Few streaming platforms offer a subscription for ad-free podcast listening — even Spotify Premium subscribers have to listen to podcast ads. 

Stitcher was one of the few platforms where podcast fans could subscribe for an ad-free experience, priced at $4.99 per month. The only major company offering ad-free podcast listening is Amazon, which is in the unique position of being able to package ad-free music and podcasts as part of a larger Prime subscription. As it sunsets the Stitcher app, SiriusXM is encouraging users to sign up for a SiriusXM Streaming Platinum subscription, offering them six months free and $10.99 per month thereafter. This subscription includes ad-free music, but podcasts will have ads. So Stitcher listeners who switch over would essentially pay more to lose the benefit of ad-free podcasts — a tough sell. 

This is a risk for customer retention, especially as most podcasts on Stitcher are already available for free, ad-supported listening elsewhere. Alternatively, listeners can individually subscribe to some creators or publishers for an ad-free experience, on platforms like Patreon or Apple Podcasts. However, SiriusXM is betting that any loss of Stitcher subscribers will be worth the potential gain in Streaming Platinum subscribers. Consolidation is the natural next step for the audio market, and SiriusXM is clearly taking on Spotify in a bid to become the home for all audio, with the motto “Everything You Want to Hear Lives Here”.

Apple and Amazon are a step ahead

Platforms like SiriusXM seem to be focusing on growing the podcast audience with a free, ad-supported model to begin with, before building a premium experience for a higher price. For streaming platforms, building an ad-free podcast subscription also comes with a host of logistical and technical challenges. 

However, at some point, platforms must experiment with monetisation to create a podcast listener subscription that actually adds value to their experience. Individual creator subscriptions force listeners to use multiple platforms to consume podcasts, thus fragmenting the experience. Apple Podcasts has a competitive advantage as it is centralising à-la-carte podcast subscriptions in its offerings, so users with subscriptions to partnering publishers can access their extra content in one place. Amazon Prime is the only subscription that not only gives podcast listeners an ad-free experience, but also a host of other benefits as well, as users can tap into its other entertainment and shopping offerings. As podcasts have not yet reached mainstream penetration, many platforms are still learning about this audience — but meanwhile, the race to build the premium podcast experience has already begun.

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