Spotify owes a big thank you to its podcasts, according to Morgan Stanley. The global financial services leader recently released a survey identifying podcasts as the number one reason why the music service claimed the top spot as the fastest-growing US music service.
According to the new report by Morgan Stanley, Spotify’s share of listening hours to 10% from 7% just a year previously. While the 3% bump isn’t enough to overtake AM/FM radio or YouTube, it places them in a very lucrative position with younger consumers, poised to make up the lion’s share of their listeners over the next ten years.
In its report, Morgan Stanley analysts said that “overall,” the results reinforced their theory on Spotify’s shares and “bullish video of the audio market.” Spotify shares closed Monday (December 20) at 228.16, indicating a 53.4% upside.
Identifying the true leaders of the audio listening sector isn’t as easy as it might seem, with each party claiming superiority.
Traditional broadcast radio claims to have the most extensive reach, surpassing all other audio platforms. YouTube likewise claims the top spot as the biggest music streaming platform worldwide. And, they’re both correct. The recent Morgan Stanley survey results demonstrate identifiable trends but emphasize there is no single method to consume audio entertainment.
YouTube’s 60% usage rate-which grows to 77% in the 18-29 age group- is the highest among digital platforms. AM/FM Radio, at 65% for the 18-29 age group, comes in second to YouTube. Further, YouTube ranks highest among all streaming platforms with a 12% share of listening hours. But at 10% and 11%, respectively, Spotify and SiriusXM have the largest subscription service listening share, giving them increased value in the eyes of stakeholders, performing artists, and songwriters compared to YouTube, which remains an ad-supported platform only.
Spoken Word Content, Podcasts, Audiobooks, & Lectures
But the future of music streaming platforms isn’t strictly music. Spoken word content, in the form of audiobooks, podcasts, and lectures, is carving out its own place among listeners. And Spotify has been particularly astute in attracting spoken word content creators like The Ringer, Parcast, and Gimlet, in addition to licensing popular podcasts like The Joe Rogan Experience.
And their actions seem to be paying off. Spotify is now the singular most popular service for listening to podcasts, at 31%, according to Morgan Stanley. (Increasing from 24% in 2019 and 30% in 2020). Apple podcasts pale in comparison at 24%, with iHeartRadio taking the third-place medal with 15%.