How can Spotify dominate the podcast industry

Study: Podcasts are on the rise

From Thomas Thieme

Between 2016 and 2019, podcast advertising revenues rose by almost 67 percent worldwide, and the number of listeners grew by 43 percent in the same period. In the first Corona year 2020, almost 1.1 million people listened to a podcast at least once a month. By 2023, the industry expects almost two billion regular listeners and an ad volume of around four billion US dollars (2020: 2.1 billion dollars). This was the result of the study “Podcasting Industry Perspectives” by Altman Solon, who claims to be a leading global strategy consultant for telecommunications, media and technology.

In a global comparison, podcasts in South Korea are the most popular. More than half of South Koreans have listened to at least one podcast in the past month. It is followed by the European countries Spain and Ireland. In an international comparison, Germany ranks eleventh.

In addition to advertising revenue, the most important source of revenue is paid subscriptions. However, according to the study organizers, the majority of podcast makers hardly participate in this boom: Reach and advertising measures are heavily concentrated on the top 15 percent of podcasts, while smaller providers run the risk of being pushed out of the market.

According to the study, the thousand contact price (CPM) for podcasts tends to be higher than for other media - including TV, radio and social media. In Germany the CPM is on average between 55 euros for 30 seconds and 80 euros for 60 seconds, in the USA between 16 and 25 US dollars.

Here are further study results on user behavior that are relevant for the marketing industry:

  • Market leader: In Europe, podcast listeners prefer to use Spotify, for example, with 39 percent of podcast users in Germany and 29 percent in Great Britain. In the United States, Apple dominates the market with Apple Podcasts (47 percent).
  • Subjects: In terms of content, younger listeners (under 25 years of age) prefer comedy, older listeners aged 55 and over prefer news. Across all age groups, the most popular topics for German listeners are society (36 percent), comedy (33), news (27), crime (22), sport (21), business (18).
  • Listeners: Podcast listeners are demographically different from traditional television or music audiences. They tend to be younger, educated, and mostly use their smartphones to listen to podcasts. This demography makes them particularly attractive for established media houses that have difficulty addressing younger consumers.
  • Multitasking: Similar to radio, podcasts are used as a "side medium". 22 percent hear them while driving, eleven percent while working and eight percent while studying.
  • Corona consequences: Contrary to the widespread fear that the decline in rush hour traffic after the outbreak of the corona pandemic would dampen podcast use, it has given it an additional boost: More than 40 percent of those surveyed in the USA, Germany and Great Britain said since the beginning spending more time listening to podcasts than before during the pandemic.

Christian Esser, partner at Altman Solon, comments on the research results:

“The podcast market is fiercely contested, because as the number of listeners and sales increases, so does the competition among providers. Not only do global streaming platforms such as Spotify, Apple and Deezer compete for listeners, but also established publishers and TV houses such as the New York Times, BBC and ProSiebenSat1. In the future, it will not only depend on high-quality and relevant content, but also on good channel management and skillful cross-media flows in order to secure the listeners' favor. "

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