Steve Goldstein: The Ups And Downs Of Audio In 2023

The audio landscape has been a rollercoaster ride this year, with new developments and unexpected challenges. While the industry experienced significant growth, it faced its share of hurdles. There has been plenty of overbuilding and underperforming. Let’s take a closer look at the ups and downs of audio in 2023.

What’s a podcast?

This year we heard lots of chatter about bending the traditional definition of a podcast as an audio file distributed via an RSS feed. As new platforms like YouTube garner significant audience that don’t rely on RSS feeds, the line between podcasts and other forms of audio content is being shaken.

This shift reflects the changing nature of audio consumption, as listeners increasingly seek out content on platforms they already use. There have been plenty of rumors over the past year that TikTok is the next big platform to develop a podcast app, but we are hearing now they are sunsetting the initiative. Still, it is a powerful promotional and sampling platform.

YouTube has become a podcasting powerhouse.

Earlier this year, many podcasters saw little traction with YouTube and shied away. That trend appeared to change as data and evidence of everchanging listener patterns became more prevalent. The reality is YouTube has emerged as a formidable force in the podcasting space. We debuted a large-scale study at Podcast Movement this past summer entitled “The New Rules of Podcasting on YouTube,” which we conducted with Coleman Insights (see the webinar replay here). It clearly showed several ways things are changing. Among the findings:

1. People use more than one app to listen to podcasts.
2. People are inclined to use video with podcast listening at least some of the time.
3. YouTube is a powerful tool for podcasters to reach new audiences.
4. Many podcasters are now incorporating video strategies into their marketing mix.

Since our research, we have seen a few additional studies in the podcast space with similar findings, and several organizations have changed their thinking about the importance of incorporating video in their podcast strategies.

Significantly, YouTube and YouTube Music are now the thrust of Google’s podcasts effort. Alphabet Inc. will shutter Google Podcasts in April.

Gimlet is no more. Spotify focuses on profitability.

Gimlet, one of the early pioneers in the podcasting industry, was sold to Spotify in 2019. While the acquisition marked the end of Gimlet as an independent company, it also solidified Spotify’s position as a leader in the podcasting space. In 2023, Spotify merged Gimlet (and Parcast) into Spotify Studios.

Gimlet’s legacy lies in its innovative approach to podcasting, which helped establish the medium as a mainstream form of entertainment. But the name and most of the original staff have left Spotify. Earlier this year, CEO Daniel Ek said the company would be “very diligent” in assessing further podcast investments. That includes passing on costly exclusives. But the mission to go beyond music with other forms of audio continues with an announcement in October that Spotify is adding audiobooks.

It’s been a rocky year at Spotify, with hundreds of layoffs and canceled shows. But say what you will about Spotify: their big swings and experimentation have undoubtedly had a positive affect on the growth and trajectory of podcasting.

Podcasting’s boom phase is over – more rightsizing, less jobs.

Consolidation and cost-cutting across the podcast business continued in 2023. Many companies reduced staff, and, based on data from Listen Notes, new podcast shows have dropped to the lowest level since 2018. Much of the change is reflected in the dual challenges of findability and monetizing audio content. Some companies spent wildly without a scalable cohesive strategy and are now paying for those moves as the era of “stupid money” ends.

It is truly sad to think about the number of audio jobs lost this past year. The list of companies that had layoffs is significant, including Spotify (3 rounds), NPR, Audacy, LA Times, WNYC, Salem, Amazon, iHeart, Pushkin, Lionsgate, and CBC, to name a few.

Over-expansion and underperformance have also been pervasive across the media and tech space. No one thinks tech is fading, but big companies, including Spotify, have grown too fast and are now focused on profitability. According to Crunchbase, 188,568 jobs have been lost in the tech sector this year. Clearly, retrenchment is not just a podcast thing.

Amp is over and out.

Organizational rightsizing also affects broadcast radio and streamers. Amazon’s live radio app Amp shuttered in October after only 20 months. The service focused on curated music and being a place for creators to customize listening. They lined up stars like Nicki Minaj and Nick Cannon. Despite its promising start, Amp failed to gain traction among listeners. According to TechCrunch, it had fewer than 700,00 monthly users. Amp wasn’t the only live audio service to close shop. Remember Spotify’s Greenroom, which later was called “Live?” It closed in April.

Brand safety and suitability take center stage.

2023 was the year for brand safety and suitability in the audio industry. This year has seen a remarkable surge in awareness and implementation of brand safety measures for audio of all types. It has amplified the necessity for brands to ensure their advertisements and content align and reflect their values and message.This change is a big win for advertisers and podcast agencies looking for safe environments.

The audio entertainment market is on the cusp of significant growth.

According to a just-released Deloitte analysis of the audio market, The market for audio around the world is predicted to surpass $75 billion (U.S.) in 2024, a 7% hike across formats like podcasts, streaming music, radio, and audiobooks.  Around the world, the monthly average of podcast listeners will rise to 1.7 billion. The report is an excellent read about how audio is growing and changing.

Edison Research says listening time to podcasts is up four-fold.

In 2014, eight percent of people surveyed by Edison’s Share of Ear said they listened to a podcast in the last week; today, that number is 31% in the last week, and is up significantly from 26% in 2022. That’s 89 million people.

In August, Edison’s latest Share of Ear report showed podcasting’s listening time has doubled in the past three years, rising from a five percent share recorded during the second quarter of 2020 to ten percent today.

Spoken Word grows.

While there is much chatter about the contraction of the podcast space and a relentless parade of articles about the bubble bursting, I recommend focusing on the podcast audience, and you should, too. It is growing.

In fact, spoken word audio is on an epic rise. Edison Research’s Spoken Word Report shows people aged 13+ spend 31% of their daily audio time listening to spoken word. Podcasts represent over one-third (36%) of time spent with spoken word. Also significant is that mobile devices are the primary way people listen to spoken word. Watch the trend to mobile devices; this one is loud and clear.

The reign of top podcasts continues.

The top podcast titles on each major podcast rating service (Podtrac, Triton, and Edison) remain largely unchanged from last year. In most charts, only three titles in the top 10 changed. It is becoming increasingly difficult for new shows to break through the durability of legacy titles.

Say hello to AI Ashley

In June, our client Alpha Media made lots of noise in Portland, Oregon and throughout the radio industry, launching the first AI radio disc jockey, AI Ashley.  And of course, a few podcasts have experimented.

Omnichannel distribution grows.

In 2023, we saw content creators increasingly distribute their work across multiple platforms to reach a wider audience and maximize engagement. This omnichannel approach involves publishing content on platforms like YouTube (long-form and Shorts), Spotify, Apple Podcasts, and TikTok. By diversifying distribution channels, content creators can reach a broader audience and cater to different listening preferences, meeting the audience wherever they are.

SiriusXM moves beyond the car.

SiriusXM, the satellite radio company with over 34 million subscribers, is shifting towards streaming and apps to compete with giants like Spotify and Apple Music. Why? The streaming audio market is expected to reach $20 billion by 2025, according to a PwC report. SiriusXM’s strategy includes expanding its app offerings and developing original content.

This move feels like a late entry in the streaming market. Is there a definitive opportunity? To succeed, new entrants must offer a compelling value proposition, differentiate themselves from established players, and invest heavily in marketing and promotion.

Radio’s Wall Street challenges are ongoing.

Broadcast radio faces stiff competition from streaming services, podcasts, and personalized music platforms. At the same time, advertisers are increasingly moving towards digital platforms, affecting the revenue streams of traditional radio.

Several radio companies are grappling with financial difficulties, with bankruptcy looming. This situation reflects the changing media landscape and the challenges for linear radio in the digital age of choice. Audacy, Beasley, Salem, and others are on the watch list with debt loads that require restructuring. Changes at Audacy appear imminent.

A good vital sign, the proportion of in-car AM/FM radio listening has surged from prior years and is back to pre-pandemic levels.  As the car goes so goes radio’s future. .

Notable is an Edison Research datapoint from earlier this year, in which audio has crossed the line, with slightly more consumption occurring on mobile devices than on radio receivers.

Public radio is losing audience and $$.

Public radio stations are experiencing declining listenership and declining revenue, leading to budget cuts and layoffs. According to Pew Research, weekly listening is down by 6%, and much of that is among younger listeners. NPR announced a revenue shortfall of $30 million, resulting in layoffs and cuts in programs, notably podcasts. NPR cut 10% of its workforce in February.

It’s not just NPR. Some prominent public radio stations and podcast pioneers, including WNYC, New York and KPCC, Los Angeles, see softness and are making cuts in the podcast sector. The focus is now broadcast-first. One must wonder how that will work, given the rise of digital audio among younger demos.

In December, legendary NPR affiliate KCRW offered voluntary buyout packages to avoid layoffs and offset a $3M budget deficit.

2024 offers an opportunity to think differently.

The audio industry is a vibrant, constantly evolving field. Success in this industry will depend on understanding and adapting to the trends and stories that played out this year, embracing new technologies, and finding innovative ways to engage with an increasingly diverse audience. We’ll be here to track it all.