Based on ongoing trends, Apple is set to lose its podcast supremacy to Spotify in 2021. According to the research data analyzed and published by Finaria, Spotify is projected to add over 8 million listeners to its user base during the year.
It will be a remarkable increase of 41.3% in a single year. From 19.9 million in 2020, it is estimated to reach 28.2 million in 2021. On the other hand, Apple will only grow its number from 27.6 million in 2020 to 28 million in 2021.
Spotify’s spectacular growth is forecast to continue in coming years with the gap between it and Apple widening considerably. By 2022, it is projected to have 33.1 million listeners, growing to 37.5 million by 2023.
For Apple, growth during the period will be relatively muted. The number of listeners is forecast to rise to 28.5 million in 2022 and by 2023, reach 28.8 million.
It is worth noting that as recently as 2015, Apple commanded a two-thirds share of the global podcast audience. The share included 80% of all mobile listeners. Despite growing its user base in the ensuing years, it has been ceding market share to competitors.
In 2018, Apple held a 34.0% share of podcast listeners worldwide, but by the end of 2021, it is projected to fall to 23.8%. Cumulatively, Apple and Spotify will together hold a 48% share of the global market in 2021.
Spotify Spent $900 Million in Two Years on Podcast-Related Acquisitions
Spotify is an undisputed leader in the music streaming industry. According to its Q4 2020 earnings report, it has 345 million monthly active users as well as 155 million premium subscribers. The figures rose by 27% and 24% year-over-year (YoY), respectively.
During the period, however, its average revenue per user fell by 8% to €4.26 ($5.13). The reason cited for the decline was the use of discounted plans to appeal to new subscribers. Ad revenue increased, accounting for a 13% share of total revenue, up from a historic 10%.
Overall, the company posted a loss of €125 million, down from €209 million in Q4 2019. Given the level of investment Spotify makes in growth, it rarely posts a profit.
Its ambitions for podcasting have driven the company to spend around $900 million on acquisitions in a span of two years. Spotify started out in the podcast market in 2019 when it committed to make a $400 million to $500 million investment to set the ball rolling.
To start with, it made a total of three acquisitions in 2019 valued at close to $400 million. First, it spent about €136 million ($154 million) in acquiring podcast creation app Anchor in February 2019. During the same month, it also shelled out €172 million ($195 million) for Gimlet Media, a podcast network. In April of the same year, it bought true crime podcast company Parcast for €49 million ($55 million).
In 2020, it continued the acquisition spree starting with the purchase of The Ringer in February for $196 million. The sports and pop culture outlet is best known for The Bill Simmons Podcast. Notably, Bill Simmons was ranked as the fifth highest paid podcaster in 2020, earning an estimated $7 million from the show.
In November 2020, Spotify spent $235 million on the acquisition of the podcast ad and publishing company Megaphone.
Over the past couple of years, it also struck deals for shows from Michelle Obama, Kim Kardashian and Joe Rogan among others.
Podcast Ad Spending to Surge by 41% in 2021 to $1.28 Billion
According to data from eMarketer, the podcast space is rapidly growing. In 2021, the total number of listeners will rise by 10.1% to reach 117.8 million. For the first time, podcast listeners will surpass 50% of monthly digital audio listeners in 2021, at 53.9%. The uptrend will continue in the coming years, reaching a 60.9% share by 2024.
Similarly, ad spending will rise significantly over the forecast period. It will surpass $1 billion for the first time in 2021, rising by 41% to reach $1.28 billion from $910 million in 2020. It will hold a 24% share of total ad spend on digital audio during the year.
In 2022, the figure will rise to $1.55 billion and further to $1.68 billion in 2023 as its share of total ad spend rises to 26.5% and 28%, respectively. By 2024, it will reach $1.83 billion and account for a 29% share of total ad spending in the digital audio space.