What are Apple’s audiobook rules, anyway?

This is the free weekly edition of Hot Pod, The Verge’s newsletter about podcasting and the audio industry. You can sign up here.

Hello, hello, hello. I hope you’re all ready for a busy, Amazon-packed issue. Because there’s a lot of Amazon news to go around today. First: Amazon and the Apple App Store. Second: Amazon Prime and Amazon Music. Third: Amazon Amp. And fourth: …some stats about talk radio from NPR, as a little breather.

A quick note for Insiders: we aren’t planning issues for Thursday and Friday this week while we’re out in LA for Hot Pod Summit. We’re really looking forward to the event and bringing back some takeaways for all of you.

What are Apple’s audiobook rules, anyway?

Say you want to offer audiobooks through an iPhone app. You’ve got a few options:

1. You can use Apple’s in-app purchase system, giving Apple a 30 percent cut on every audiobook purchased. That means letting Apple eat into your margins or marking your prices up and making them less competitive with, say, Apple Books.
2. You can offer a subscription inside your app using Apple’s in-app purchase system. This will reduce the fee to 15 percent after one year. Audible, for example, raises the monthly fee for its premium tier by $1 per month on iOS to compensate for this.
3. You can offer a subscription outside your app. This year, Apple started granting some exceptions to allow apps to share information with users on how to go about signing up for a new account. So an app can theoretically link out to a signup page on the web. (Netflix does this; Spotify does not.)
4. You can offer nothing in your app. Users can buy audiobooks on the web; then, they’ll appear in the app once they’re purchased. You can’t tell users about how to buy them, though. This is what Libro.fm does, for instance.

But critically, you cannot just sell the audiobook directly using the payment processor of your choice. Nor, as Spotify learned last week, can you include a button in your app that emails your customer a link to buy the book on the web. I don’t personally think these are good rules, but they are Apple’s rules, and developers are stuck with them.

Or, at least, they usually are. A developer DMed me this week after spotting that Amazon seems to be able to pull off the same “email the customer” tactic that Apple just prohibited Spotify from using. Open up Amazon’s app, sign into your Amazon account, and then pull up an audiobook. A big yellow “I Want This Book” button appears. Tap it, and you’ll receive an email explaining that you need to sign up for an Audible membership to acquire the book and listen.

I’m not writing this to call out Amazon for skirting Apple’s rules — I’m writing this because… well, what even are Apple’s rules? Apple approved Spotify’s email approach, then later retracted the approval and said the app needed to change. Has the company also missed a rule-breaking behavior from one of the biggest e-commerce companies on the planet? Or is there some kind of wiggle-room exception here because Audible is a subscription service? I reached out to Apple for clarity on its rules but did not receive a response. Amazon did not respond by press time, either.

Spotify doesn’t know why Amazon’s system gets a pass, either. “Apple has given us no such guidance,” Adam Grossberg, a Spotify spokesperson, told Hot Pod. “It’s a very good question and one that suggests Apple is not fairly applying its rules.”

If I had to take a bet, I’d guess that Apple’s rules will eventually nudge Spotify to launch a subscription option for its audiobooks. Spotify very specifically tried the a la carte approach as a way to differentiate itself from Audible. But Apple’s system really preferences subscriptions: in-app subscriptions have a lower transaction fee, and subscription content apps get the option to link out to their website for signup and avoid the fees altogether. I don’t know that subscriptions are the best model for audiobooks, but they sure seem like the one Apple wants.

Amazon goes big on ad-free podcasts

This feels like the ultimate take on “what’s more important: subscriptions or ads?”

Amazon has decided to amp up the audio offerings of its Prime subscription in a big way. Prime subscribers now get access to Amazon Music’s full catalog of songs, with the only — admittedly major — caveat being that they have to listen to everything on shuffle.

Prime members are also getting a bunch of podcasting perks. Wondery shows and Amazon exclusives are going ad-free for Prime subscribers who listen through Amazon Music. Amazon also partnered with a bunch of top podcast producers, including CNN, NPR, ESPN, and The New York Times, to bring some of their shows to the service ad-free as well.

I find this particularly fascinating because up until today, more or less, Amazon’s podcast strategy has been to focus on ad sales. Just look at its SmartLess deal: the company didn’t lock the show down as an Amazon exclusive and force people to pay for Prime to tune in; it kept distribution as wide as it can so that Amazon can sell ads against its large and lucrative audience. Amazon has made a bunch of deals like this! But now…

“The biggest thing [consumers] don’t like about podcasts is all the ads,” Amazon Music head Steve Boom said on Decoder this morning. So Amazon has decided to do away with them.

It’s a fascinating bet. Amazon’s audio offering is fairly compelling if you compare it to Spotify’s free tier — as my colleague David Pierce writes, “As free services go, though, Amazon Music is now essentially Spotify minus the ads for anyone already paying for Prime.” But critically… Amazon Music is not free, exactly. It is $139 per year and just happens to come with a bunch of other benefits. And unlike the ad-forward approach, this tactic requires listeners to actively choose Amazon’s platform.

I suspect Amazon Music’s biggest hurdle right now is simply awareness. Prime is still best known as the “free shipping” subscription with a bunch of other perks built in. Amazon’s content divisions now seem to be trying to hold their own in that partnership: Prime Video is pulling its weight with major titles like Rings of Power, and today’s announcement shows Amazon Music trying to follow suit, too.

There’s one other big podcast update here: a feature called “podcast previews” in Amazon Music that presents short, curated clips from shows that listeners can swipe between. The clips are all editorially curated by Amazon Music editors, Rebecca Silverstein, an Amazon spokesperson, told Hot Pod. “We are starting with a small set of select partners whom expressed interest in participating, and would like to grow the number of podcasts included as part of this feature over time.” It’s a neat take on discovery and something other audio streamers should be thinking about, too.

Layoffs at Amazon’s live audio team

Amazon has cut around half of its live audio team — “roughly 150 people” — according to Insider. It’s an inauspicious sign for the future of Amp, which only launched back in March.

It was just two months ago that Amazon launched a creator fund to encourage people to use the live audio service. At the time, I was also seeing ads for Amp appearing all over the New York City subway, in what read to me as a fairly surprising push given that live audio has been flagging all year.

Amazon says Amp isn’t going anywhere, though. The company told Insider that it is consolidating teams to “focus on the growth and scaling of Amp.” That said, losing half of your team often limits your ability to do such things!

Insider points out that the layoffs come after a weak earnings report from Amazon, after which the company’s CFO said headcount would be a target for cost cutting. With how much trouble Clubhouse seems to be having, I’m not convinced Amp has everything it needs to succeed.

Spoken word audio is booming

Okay, no surprise here if you’re reading this newsletter, but: NPR and Edison Research’s Spoken Word Audio Report came out last week, and they found that spoken word audio has been growing in a big way. 131 million people aged 13-plus in the US now listen to spoken word audio each day, up from 105 million in 2014, according to the report. 

There are promising signs this isn’t just a fad, either. Younger listeners — Gen Z — are spending about a fifth of their audio time on spoken word, up from less than a 10th close to a decade ago.

Listeners are increasingly tuning in on mobile, according to the report, now hitting a third of all listeners. But critically, radio still reigns supreme as a format, with nearly half of all listening happening on AM/FM, compared to one-fifth on podcasts.

Hot Pod Summit is happening this week

We’re very excited to see a bunch of you out in Los Angeles in just two days. Hot Pod Summit LA is happening on Thursday, and we’ve got a full day of exciting conversations lined up. My colleague Ariel Shapiro, Hot Pod’s lead writer, and our friend Nick Quah, Hot Pod’s founder and the author of 1.5x Speed at Vulture, will be in town to sit down with top leaders in the podcasting space to talk about comedy, politics, IP ownership, Hollywood adaptations, subscriptions, and a whole bunch more.

Hot Pod Summit LA is sponsored by Amazon Music, Wondery, and AdsWizz, and it’s being held in partnership with work x work and KCRW. The event is happening as part of On Air LA Annex, being held November 3rd–5th. Tickets are still available, and you can read about their full lineup over here.

Phew, that was a long one. We’ll see y’all next week!