Image Credit: Haithem Ferdi
Spotify’s ad-supported model is growing faster than its subscription model due to the increase in podcast listeners, a new report says.
The report by research firm eMarketer analyzes the number of free and premium Spotify users in the United States. By the end of the year, Spotify is estimated to have around 41.5 million US ad-supported listeners, an increase of 9.7% from 2020 and an increased tendency for ad-supported listeners to increase. their share on the music streaming service. According to eMarketer, the total number of listeners in the United States will grow 10.1% this year to a total of 83.1 million monthly listeners. If the trend continues, Spotify could see the same number of free listeners as Premium subscribers by 2025, with around 52 million listeners on each tier, for a total of over 100 million listeners. So what is causing this trend and how will it affect me as an artist or music / podcast listener?
The main difference between the plans is of course ad-free listening on Spotify Premium, but there are a few other features not available on Spotify Free, such as offline playback, on-demand mobile listening, and unlimited skipping. eMarketer says the reason for the increase in ad-supported listeners is the increase in podcast listening on Spotify in recent years. Spotify has invested heavily in recent podcasts, with exclusive shows and new features like ad targeting tools.
Spotify is by far the most popular service in the United States and many other countries around the world. Next year, Spotify is expected to reach 30% of American internet users for the first time. However, the faster increase in the number of free listeners is of concern to both Spotify and artists. Both parties make a lot more money per stream paying subscribers than ad-supported listeners. Could this see Spotify further restrict its free platform in the future?
To view Spotify’s third quarter 2021 revenue, click here.
Spotify claims to be the number one podcast platform for US listeners.