Podcasts and music streaming Mirrored growth

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20,000 foot view:  The economic recession, and related layoffs at major podcasting divisions, have some questioning the future of the format. However, podcasts are following a similar trajectory as music did in its transition to streaming and have reached critical mass —        consumer penetration — faster than music streaming subscriptions did. In this respect, the podcast market’s journey is only just beginning, and we can predict the phases that the format will go through. The main difference is that, while music streaming developed before today’s hyper-competitive, fragmented entertainment landscape, podcasts are entering their growth phase within it.  

Key insights 

• Paid music streaming subscription penetration did not reach critical mass        until        2021, reflecting that new format growth takes time
• Monthly podcast listening penetration dipped from        in        2020 to        in        2020        but it bounced back to        by        2022
• Major music streaming and entertainment platforms have invested at least        billion in the podcast market since 2019, with Spotify alone contributing nearly half        billion) 
• The attention recession is forcing audiences to consume mediums simultaneously, pushing music and podcasts to the background
• As of        2022,        of podcast listeners and        of music streamers listen to their respective format as a background activity
• The podcasting rights landscape has yet to be established; but as the format develops and the verdicts from the comedians’ lawsuits against Pandora are announced, changes to rights could potentially shift the entire market
• Podcasts and music are in direct competition on streaming platforms, potentially challenging music listenership and contributing to the oversaturation of the audio market 
• As consumption continues to fragment across smaller, niche platforms, this creates more opportunities for podcasts to find new audiences. In particular, social video platforms, like TikTok and YouTube, can capitalise on the rise of podcast videos 
• Podcasts’ continued growth will depend partly on how well the industry can navigate oversaturation and create new business models that are not completely reliant on advertising

Companies and brands mentioned in this report: Amazon, Amazon Music, Anchor, Apple, Apple Podcasts, Billboard Hot        Case        Chartable, Clubhouse, DC Comics, Forbidden Fruits with Julia Fox and Niki Takesh, Gangnam Style, Gimlet Media, Grace Keeling, Hasan Minhaj, iHeart, iPod, iTunes, Joe Rogan, Libsyn, LimeWire, Markiplier, Midroll Media, MommyCast, Napster, Pandora, Parcast, Patreon, Podimo, Podsights, Serial, SiriusXM, Spotify, Stitcher, The Riddler: Secrets in the Dark, The Ringer, This American Life, TikTok, Twitter Spaces, Vad? med IJustWantToBeCool, Wondery, YouTube, YouTube Music