Last week, Inside Radio reported on second quarter 2021 Share of Ear findings from Edison Research, showing that AM/FM radio remained the largest audio source during second quarter 2021 with Americans 13+ spending 39% of their audio time with broadcast radio. When the view is narrowed to just listening to ad-supported platforms, new data shows AM/FM’s share nearly doubles to 76%. Put another way, AM/FM radio represents three-fourths of all ad-supported audio.
Homing in on time spent with audio in the car, AM/FM has a 87% share of ad-supported audio. And its piece of the in-car pie hasn’t changed all that much in the past five years: 93% in Q2 2016, 91% in Q2 2018 and 87% for the two most recent years. Keep in mind that this reflects ad-supported media only and excludes time spent with subscription-based streaming and satellite radio services and owned music.
In a trend that has ramifications for both programming and sales, the percentage of total AM/FM radio listening that occurs via streaming jumped for a second consecutive year. As of Q2 2021, 15% of broadcast radio consumption among persons 25-54 took place via the station’s stream, a big jump from 11% in Q2 2020 and 10% in Q2 2019.
The analysis, conducted by Westwood One, which subscribes to the Share of Ear service, shows Spotify’s subscription-based service growing steadily over the last five years while its ad-supported tier has suffered from audience erosion. Since 2016, Spotify’s paid, ad-free audience shares have jumped from 0.9% to 3.7%. Meanwhile, Spotify’s ad-supported free service audiences are “small and stagnant,” says Brittany Faison, Insights Manager at Cumulus Media and Westwood One, dipping from, 1.6% to 1.4%. At the same time, the ratio of ad-supported to ad-free listening at Spotify has inverted during the past five years. Ad-supported Spotify has tumbled from 64% of the streamer’s listening in Q2 2016 to 27% in Q2 2021. Nearly three-quarters of Spotify listening is now to its advertising-free subscription service (73%), compared to 36% five year ago.
And for all investments Spotify has made into podcasts, Edison reports only 5% of all time spent with Spotify goes to podcasts.
WWO’s analysis also uncovers a major misperception in how advertisers believe the audio pie is being carved up. In July 2020, Advertiser Perceptions surveyed 300 marketers and media agencies on the audience shares of AM/FM radio, Pandora, and Spotify. “Examining the Q2 2021 ‘Share of Ear’ study, it is evident that there is a massive disconnect between perceptions and actual audience shares,” says Faison. Brands and agencies perceive that Spotify’s share is 24%, twelve times larger than its actual 2% share of ad-supported audio listening. Conversely, AM/FM radio’s perceived share (35%) is 17% smaller than its actual 41% share of time spent with ads-supported audio. Faison says that based on the latest Edison data, AM/FM radio’s audience is 21-times larger than Spotify and 14-times bigger than Pandora.
When pulling back to include both subscription-based and ad-supported tiers, all of the music streaming services represent an 18% share of ear, or nearly half of the share for AM/FM radio.
And while podcasts make up 6% of all audio time for Americans 13+, the percentage jumps to 11% when looking at its share of time with ad-supported audio among persons 18+. That’s three times the share from Q2 2017 (4%). In fact, Faison says all of the growth in ad-supported audio is coming from podcasting.