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The popularity of podcasts – a threat to global music streaming?

With streaming platforms doubling down on podcasts, we discuss their popularity and the possible threat to the recorded music industry.

Austin Distel On Unsplash
Austin Distel On Unsplash

Music streaming platforms have created an era of transformation for the recorded music industry. Each year, industry groups such as IFPI and CISAC share data demonstrating positive growth. However other audio formats are gaining popularity. Podcasts may pose a new challenge to recorded music’s domination of consumer choices. Regardless of first emerging in 2004, podcasts have exploded in popularity in recent years. In 2019 data, Reuters shared that over half of 35 year olds in the US listened to a podcast in the past month.

Why are people listening to so many podcasts?

People are listening to more podcasts for various reasons. Reuters shared extensive information on podcast listening behaviour. One reason is the parasocial bonds created between the listener and the host. This trust makes people more willing to welcome podcasts into intimate parts of their day, with 64% of podcasts being consumed in the home (Reuters, 2019). In times of the day previously dominated by music streaming such as commuting, podcasts have risen in popularity. With the average US one way commute approximately 26 minutes, this aligns well with the recommended podcast duration, making it an easy switch from music streaming (US Census Bureau, 2017).

Reuters shared that in the UK, 46% of podcast users cited keeping updated on topics of personal interest as the reason why they choose podcasts. With a plethora of podcasts and a low barrier to entry, it is an accessible way to explore a topic of interest. In addition, as a passive media, it allows the listener to consume content while multitasking. One concerning figure is that of the 18-24-year-old’s, 36% used podcasts as a change from listening to music. With both music and podcasts primarily consumed via our smartphones, there is an ease of switching between both media.

Spotify bets big on podcasts

With Spotify being the chosen platform for over 271 million active monthly users, they have a huge influence on the music industry and artist earnings. However, despite being one of the most popular music streaming platforms in the world, in the past year, Spotify invested over $400 million on podcasts and podcast distributors.

Now with 700,000 active podcasts on the platform and the acquisition of Anchor and Gimlet, they have solidified their commitment to podcasts. Founder Daniel Ek shared the prediction that “overtime 20% of all listening on Spotify will be non-music content” (Rolling Stone, 2019). This month the platform launched curated podcast playlists, trying to emulate the success that genre-specific music streaming playlists, such as RapCaviar, have achieved.

But why invest resources and money so heavily in this media? Streaming platforms see the benefits of podcasts as a revenue stream. With podcasts there are no royalties to be paid and large advertising opportunities, resulting in a higher profit margin, than that of recorded music. With the introduction of Streaming Ad Insertion Spotify can provide more targeted ads and insights, which will attract more advertisers’ spend.

Cowomen On Unsplash
Cowomen On Unsplash

The impact on recorded music

It is difficult to predict if podcasts will pose a threat to recorded music, or will they exist in harmony. Universal Music Group reported a reduction in global revenues of $100 million in 2019. While streaming exploded in the market, it is reaching maturity in some markets such as the UK and US. Despite this, mature markets such as Germany are reporting record music streaming revenues, surpassing $1 billion in 2019. In addition to this, streaming is rising rapidly in emerging markets. While a threat, there are also opportunities, with some artists leveraging podcasts as an affordable and scalable promotional tool. Podcasts give artists an opportunity to tell stories. And with podcasts and their music living on the same platform, this may benefit artists as they engage with their fans.


While podcasts are experiencing growth, so too is streaming. The music industry is presented by various opportunities and threats, which makes royalties difficult to predict. The Matching Engine can support you in managing your transactional data as it scales up and down. Talk to our team today about future-proofing your systems.