Add this one to the list of unexpected effects of the coronavirus pandemic… audio streaming and podcasts are on the decline. I suppose it’s not shocking due to the way our lifestyles have changed during lockdown, but it’s a little startling since this area was showing such strong growth before the virus.
Just last year, eMarketer reported that podcast advertising revenues were expected to surpass $1 billion by 2021. The industry may fall short of meeting that mark now. Some advertisers reacted by significantly increasing their spend, but some have turned off all advertising. Every advertiser has reacted differently because every advertiser will be impacted differently.
There was actually a slight boost in listeners at the beginning of the pandemic, as people were heavily seeking COVID-related news wherever they could and podcasts benefitted from this. However, over the course of March, the numbers dipped as people began sheltering in place, replacing commute podcast streaming with more breaking news from other sources, guided meditation and children’s entertainment at home. As audio streaming declined, video streaming increased, as we discussed in a previous article. And let’s not forget the increased time on social media, which we also touched upon in regard to the rise of TikTok during quarantine.
But it’s not just podcasts that are losing listeners. Audio streaming services like Spotify and Pandora reported declines also. A Nielsen Music study in April showed another turn to video, specifically for music videos. Mark Mulligan, managing director for MIDia Research, offered his insight, saying, “Most labels, pointed to a strong rise in YouTube and Vevo streams, indicating that when stationary at home, many consumers prefer a visual music experience.” So much audio streaming occurs during daily commutes when the visual element is not so necessary. When people have the option, they seem to lean toward the audio-visual combination.
Furthermore, traditional TV viewership is up for the first time since 2012, with a 3% gain. Positive increases have been seen across all age ranges, but mostly with the older demographics. We’re talking live or pre-recorded television programs here; no digital streaming services were counted in this study. As we were stuck at home, more people were turning back to the medium that was long considered to be dying, since we were really craving visual mediums. “Consumers will undoubtedly be fixated on their TVs more in 2020 due to stay-at-home orders, continued interest in up-to-date news on the pandemic and increasingly, more leisure time due to increasing unemployment rates,” said eMarketer forecasting analyst Oscar Orozco. But don’t expect it to last. Experts predict as quarantine restrictions are lifted, these numbers will go down once again.
So, advertisers should fear not. The dip is expected to be short-lived. In fact, with the easing of restrictions, numbers are slowly but surely creeping back up. And it hasn’t been all bad news across the board. Podcasts dealing with politics and health are up in listenership and downloads. Therefore, advertisers’ responses for the time being should be based on whether they have a product or service that will be impacted from the economic fallout. For example, if you have a product or service like travel or events, you may have to alter your ad spending and strategy in more significant ways.
Despite the drop, streaming and other music industry players that have made significant investments in audio entertainment remain hopeful that the decline is temporary, and that podcasts will continue to be a significant source of business growth. Innovation among these players is running deep, as they are branching out with their content, figuring out ways to use social media, video and messaging to draw attention to their podcasts.
History has shown that those who continue to invest during economic downturns are most likely to succeed in the long-run. If that is the case, then podcasting and audio streaming are here to stay.