When digital audio replaced analog in the ’90s, it transformed the way we listen to music and opened a space for podcasting to emerge. CDs, streaming services, and podcast apps quickly replaced existing music forms. The future was digital, and growth was falsely perceived to be inevitable in the long term.
While the music and podcast streaming industries continue to enjoy growth each year, evidence points to a speedy collapse in the amount of growth over the coming decade.
The story so far (2018-2022)
In terms of growth, ad-supported podcasts have been outperforming the music and ad-supported music streaming sectors since 2018, enjoying a peak revenue growth of 47.5% in 2021. This was largely due to the COVID-19 pandemic in which listeners turned to podcast platforms to provide comfort and companionship.
Music streaming generates more money than podcasts but has enjoyed smaller growth in comparison since 2018 — never peaking above 30% in any given year.
Predictions for the future (2023-2027)
The future of digital audio appears bleak, with growth forecasts continuing to shrink year-on-year from 2023. By 2027, podcasts are predicted to enjoy only 5.1% revenue growth – a major collapse compared to its 2021 figure of 47.5%. In the music industry, while subscription numbers continue to grow, the number of streams has stalled.
Combining music streaming, ad-supported music streaming, and ad-supported podcasts, the total growth forecast sits at a mere 3.5%. For artists and creators, this presents an uncertain future. Smaller revenue growth will drive away subscribers, reduce streams, and put off sponsors.
In terms of what may be driving the negative outlook, the growing interest in retro alternatives could offer an answer. In the UK, for example, vinyl sales had increased for 15 consecutive years in a row up to 2022. The popularity of vinyl seems set to impact the music and podcast streaming industries for years to come.
Photo credits: The feature image used has been taken by Sebastian Pandelache. The infographic in the body of the article is owned by Statista and has been provided for press usage.
Sources: Martin Armstrong (Statista) / Will Page (Billboard) / Sam Moore (NME)