Spotify Surpasses Apple in Podcast Listenership - 2021 Data

Spotify Set to Surpass Apple in U.S. Podcast Listenership

Investors are keenly observing Spotify’s substantial investment in podcasting, anticipating a return through increased subscriptions or revenue growth. A crucial prerequisite for this is expanding the number of individuals who utilize Spotify’s platform for podcast consumption.

Growing Momentum for Spotify Podcasts

Recent market projections indicate that Spotify is gaining traction in this area. This year marks a turning point, as Spotify is forecasted to exceed Apple Podcasts in U.S. listenership. Specifically, 28.2 million U.S. users are projected to listen to podcasts on Spotify monthly, compared to 28.0 million on Apple Podcasts.

Analysts at eMarketer predict this shift will follow a significant 41.3% increase observed in 2021.

Projected Growth in the Coming Years

Over the subsequent two years, Spotify is expected to further extend its lead over Apple. By 2022, the platform anticipates reaching 33.1 million monthly U.S. podcast listeners, while Apple Podcasts is projected to have 28.5 million.

Looking ahead to 2023, Spotify forecasts 37.5 million monthly listeners in the U.S., contrasted with Apple’s comparatively stable 28.8 million.

Apple's Declining Market Share

The data reveals that Apple has experienced a decline in its podcast listener share since 2018, when eMarketer began tracking the market. At that time, Apple Podcasts held a 34% market share, a figure expected to decrease to 23.8% this year.

Overall Podcast Growth

In 2021, a total of 117.8 million individuals in the U.S. are expected to listen to podcasts monthly, representing a 10.1% year-over-year increase. Podcast listeners will also constitute 53.9% of all monthly digital audio listeners, surpassing the 50% threshold for the first time, according to eMarketer.

This overall expansion is also anticipated to benefit Spotify at the expense of Apple.

Divergent Approaches to Audio Integration

Unlike other streaming music services like Spotify, Amazon, and Pandora, Apple has segregated podcasts into a dedicated app, rather than integrating them with music. This separation potentially hinders the discovery of podcasts by users already engaged with music streaming.

Other platforms facilitate seamless transitions between music and podcasts, with options like Pandora Stories or Spotify’s Shows with Music, offering combined listening experiences.

Spotify's Strategic Advantages

“Spotify has established itself as the convenient, all-in-one destination for digital audio by consolidating podcasts and music in a single location,” stated Peter Vahle, a forecasting analyst at eMarketer. “Apple was the primary choice for podcasts for a considerable period, but it hasn’t matched Spotify’s investment and innovation in podcast content and technology in recent years.”

Spotify’s investments have also empowered podcast creators and advertisers through its proprietary hosting, creation, and monetization tools.

Apple's Current Strategy

Apple is currently exploring podcast enhancements, focusing on highlighting high-quality content through increased editorial curation. The company has also experimented with producing original podcasts, such as a companion podcast for its “For All Mankind” Apple TV+ series and music-focused originals.

However, Apple appears to be prioritizing expansions into new areas like streaming TV, movies, and subscription-based fitness, rather than fully capitalizing on the momentum within the podcasting market.

Spotify's Future Plans

Spotify is actively pursuing new initiatives, including paid podcast subscriptions, WordPress integrations for podcast creation, and tools to enhance podcast interactivity, aiming to compete with social audio platforms like Clubhouse.

The company is also developing an audio ad marketplace, the Spotify Audience Network, to further monetize podcast content.

Podcast Advertising Revenue Growth

eMarketer forecasts that podcast advertising revenue will exceed $1 billion for the first time in 2021, reaching $1.28 billion – a 41% year-over-year increase. This growth is expected to continue, with podcasts accounting for 29% of total digital audio ad spend by 2024, up from 24% in 2021.

Challenges and Competition

Whether Spotify can successfully convert its podcast listenership into paying subscribers or effectively monetize them through advertising remains to be seen. Currently, Spotify is operating at a loss, prioritizing subscriber growth and podcasting investments over immediate profitability.

There have also been indications of challenges with its exclusive content model, as demonstrated by the departure of Joe Budden last year due to a contract dispute.

Apple is also exploring a podcast subscription service, potentially bundling it with existing services like cloud storage, streaming TV, and games. Amazon’s acquisition of podcast network Wondery further intensifies the competitive landscape, potentially influencing these forecasts and Spotify’s future growth.

Early Stage Event Announcement

Early Stage is a leading event designed to provide startup entrepreneurs and investors with practical guidance on building successful businesses. Attendees will gain firsthand insights from successful founders and venture capitalists.

The event will cover all critical aspects of company building, including fundraising, recruiting, sales, legal matters, public relations, marketing, and brand development. Each session incorporates audience participation, allowing for questions and discussion.