Digital Audio Still Mostly Funded by Subscriptions, but Ads’ Role Forecast to Climb

January 6, 2022

This article is included in these additional categories: Advertising Trends | Creative & Formats | Industries | Media & Entertainment | Spending & Spenders

eMarketer US Digital Audio Subscription v Ads Jan2022

For the past few years, digital audio subscriptions have accounted for a growing majority of total digital audio revenues. However, data from eMarketer indicates that in the coming years revenues from digital audio services ad spending will account for a rising share of total digital audio revenues.

Per eMarketer’s analysis, audio subscription revenues — which include revenues from paid audio subscriptions and limited tier paid audio subscriptions — accounted for 63.8% of total US digital audio revenues in 2021. After growing from a 57.9% share of total digital audio revenues back in 2018, estimates show that audio subscriptions’ share of total digital audio revenues is likely to plateau at a 63.9% share this year before decreasing to a 62.1% share by 2025.

At the same time, digital audio service ad spending — including digital advertising revenues for local and national broadcast radio stations, satellite radio services, purely online radio stations and streaming music services — which accounted for 42.1% of US total digital audio revenues in 2018, is set to account for 36.1% share this year. By 2025, digital audio services ad spending’s share of digital audio revenues will rebound slightly to 37.9%.

Despite subscriptions’ share of total digital audio revenues appearing to level off, paid streaming subscriptions in the US have been growing at a steady pace for the past 5 years, and other data from eMarketer estimates that the number of paid digital audio subscribers will continue to grow into at least 2023.

As for spending on advertising on digital audio services, previous data from Nielsen reveals that more than half of streaming audio listeners use ad-supported services. Additionally, data from the Recording Industry Association of America shows that ad-supported streaming service revenues grew by 54% year-over-year in H1 2021.

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