Digital audio is booming, and podcast listening hugely popular right now in the Nordics, reports Mediavision. Payment rates for podcasts, however, are still low compared to other streaming services. According to press reports, Spotify may be considering podcast subscription plans. The question is, are podcast listeners in the Nordics prepared for paywalled content?
Digital audio is growing in the Nordics, with streaming music in the lead. In Q3, more than 50 per cent of Swedes listened to digital music, audiobooks and/or podcasts an average day. In the very center of attention are podcasts – obtaining as big a share-of-listening as traditional radio in young targets (15-34-year-olds). However, the growing popularity is not reflected in ad spend. Mediavision estimates that podcast ad revenues amounted to roughly a tenth of that of commercial radio in 2019 – fairly small in relation to the number of listeners (but also reflecting a highly fragmented market). Since the industry is still young, this might of course change. Another possible way forward may instead be consumer revenues.
Looking specifically at Sweden, podcast listeners actually claim quite a strong willingness to pay for the content, especially if it is exclusive. And there are certainly many ways to package premium content. For one, as rumored in the case of market leader Spotify, users could choose a “lock-in” strategy by offering paid podcast subscriptions. Mediavision analysis points at a Spotify share of digital listening at 50 per cent and a 34 per cent share of podcast listening. This may be enough to introduce a subscription package, focusing on “spoken sound”, but that could also mark the end to the strong performance we have seen so far. Maybe Spotify is better off using podcasts as a way to increase listening and thereby as an effective retention tool – i. e. keeping today’s churn on a low level?
Another alternative may be subscription services entirely focused on podcasts where listeners pay for access to exclusive content. Swedish platform PodMe is an example of such a platform, which recently has acquired exclusive rights to some attractive podcast titles (including Shulman and Fördomspodden). As of today, the service gathers 3 per cent in daily reach among podcast listeners. Another example, on the global arena, is Luminary. After launching in 2019 (with substantial financial backing), it only amassed 80 000 subscribers in its first year of business. The conclusion? Well, a bit early still but not an immediate success for the pure-pay strategy.
Hence, the question for the industry remains: Is the podcast audience truly prepared to pay for content? Could subscriptions be the way forward in securing solid revenue streams? The answer may be that the podcast industry needs its’ equivalent of House of Cards or Game of Thrones – strong titles to push listening. content is king and it needs to be paid for one way or another, sooner or later.