Home » 02 august 2019 » Why are music companies investing in podcasts?

Why are music companies investing in podcasts?

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Podcasting, as a media format, has been growing rapidly. Over the past few years, podcasts have joined the mainstream market for people and businesses. Since its awareness has exploded in recent years, it wasn’t the same not too many years back. Only 22% of consumers knew what a podcast was in 2006 but today the percentage of podcast consumers has risen to 64%. Today, there are more than 750,000 active podcasts and more than 30 million episodes as of June 2019

According to brands like Apple and Google, there are 555,000 and 2 million podcasts on their platforms respectively. However, according to Apple’s recent announcement their figures have now increased to 700,000.

 

Growth of podcast in music

Since 2016, podcasts have witnessed a growth no matter how slow. That year podcast listening hours were 30.5 in a span of 15 weeks. By 2019, 63.3 hours for the same duration. Simultaneously, music streaming in 2016 was recorded at 114 hours, which by 2019 has come down to 70.9 hours. The music listening shift has marked an evident transition in choices of listeners.

In the U.K., as of now, weekly podcast listeners spend an average of 6 hours 37 minutes per week listening to podcasts. 33% out of podcast listeners spend time listening to audio sources, 25% listen to FM/AM radio, 15% owned music, 14% streamed music/audio, 5% TV music channels, and 8% others. Currently, 65% of monthly podcast listeners have been listening to podcasts for less than 3 years.

Currently, the 52% people listening to podcasts is through Apple Podcasts making it the listening market share dominator in podcast programs. On the other hand, 19% of podcast listeners choose Spotify for the same. Spotify’s acquisitions of Gimlet Media, a podcast producer and network for approximately $230 million along with Anchor, a start-up that makes podcast recordings and distributions and Parcast for $56 million hints at their necessity to grow deeper into the podcast market.

That being said, big record labels like Sony Music Entertainment and Universal Music Group have also entered into joint ventures with podcast developers to develop original podcast talent and programming.
Also, In February 2018, Atlantic Records, a subsidiary of Warner Music Group, launched a podcast production team and studio.

The annexation of podcasts by the three biggest labels on earth now embarks a major grip of audience globally and through the availability of aggregators, the reach and garnering audience is only a profit incurring step for the biggies of the music industry. Their podcasts are available globally on any platform including Apple Podcasts, Spotify and Google Podcasts.

The growth of podcast aligns with current important trends such as on-demand content binge, customised and/or personal curation, and the availability of quality content and also celebrities with their own shows. Snoop Dogg’s GGN Podcast allows fans and listeners to get up close and personal with the star. This podcast is hosted by Snoop where he talks about his personal life to taking interviews with other celebrities in the most uncensored manner.

Snoop Dogg Podcast

 

The other factor which makes podcasts extremely flexible is the growth in revenue through advertisements. This has helped attract higher talent and add quality to the production. According to Element Media Direct estimates growth rates in podcast ad revenue of +72% in 2016 vs 2015, +85% 2017 vs. 2016, +80% 2018 vs. 2017, and +50% 2019 vs. 2018.

The duration of an advertisement in podcasts makes it less annoying and ad clutter-free with few reasons to try to block it or leave while the ad is running. This makes the audience stay and become religious followers.

Interestingly, 38% of podcast listeners are also buyers of the products whose ads have been mentioned on the podcasts.

 

Is Podcast Listening Expected to Keep Growing?

Podcasts are expected to grow exponentially due to the increasing number of internet users globally and also the dependency that it has created for people. Due to music brands like Sony Music, Universal Music, Warner Music, and non-music brands Pepsi, Starbucks, Google, Microsoft and Tinder investing into the podcast market. The increase in the brands investing for ads makes it a potential market for positive results. This marketing trend will also enable and inspire potential advertisers to venture into the platform increasing the trust in the medium.

 

 

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Aakanksha Sharma

Author: Aakanksha Sharma

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