Digital audio market sees inflection as advertising grows in share

The forecast: After several years of growth in share, US digital audio subscription revenues will peak at 63.9% of total digital audio revenues in 2022. Subscription revenues will continue to grow after that, but will make up slightly less of the digital audio ad revenue pie as ad spending grows in share.

Dive deeper:

• As subscription revenue increased between 2018 and 2021 as a share of total audio revenues, digital ad spending waned. Advertising will fall to 36.1% of total audio revenues in 2022, but rebound to 37.9% in 2025.
• While total US audio subscription revenues will remain relatively stable, the category remains competitive. Currently Spotify has the largest share of subscription revenues as Apple, Amazon, and Google all continue to build out their audio businesses.
• The number of paid audio subscribers has been increasing in the US. That figure will reach 121.9 million by year-end 2021, for an 11.2% increase over 2020. We expect future growth in this area to be modest, as penetration for audio subscribers settles at a saturation point.

Looking ahead: While digital audio subscription revenues remain stable as a percentage of total digital audio revenues, these revenues are increasing overall. Digital audio subscription revenue per paid subscriber will increase in future years, as subscribers come off promotional pricing deals and companies potentially increase subscription prices.