2020 may have been a tough year for many, but for Spotify, it was a year to remember. Spotify is one of the leading streaming audio platforms in the US, and is comparable to Pandora Radio, Amazon Music, iHeartRadio and Apple Music. According to Edison Research, Americans are now spending nearly four hours per day listening to audio of some type, whether that be AM/FM radio, podcasts, streaming audio, or SirusXM Radio. (That’s the equivalent of over 60 days per year.)
Spotify’s stock price rang in 2020 at about $153 per share, and it is set to close out 2020 (at the time of writing this article) at more than double that amount. In true Spotify fashion, let’s look at the top factors of 2020’s successes and why these matters to media practitioners.
- Podcasts: Spotify made several big investments in podcasting. According to Edison Research, 37 percent of Americans listened to a podcast in the past month, while in 2013, that number was merely 12 percent. In November, Spotify acquired Megaphone, a top podcast publishing and advertising platform. Spotify also signed an exclusive deal with top podcast creator Joe Rogan, creator of the Joe Rogan Experience. Starting this past September, if one wants to listen to the Joe Rogan Experience, it has to happen on Spotify. Brands can take advantage of a few different opportunities around podcasts, including linear sponsorships and ads (everyone listening hears the same ad) and programmatic opportunities, which dynamically insert ads relevant to each individual user within each listening stream.
- Changes in listener habits: COVID brought a myriad of changes to media viewership and listenership habits. When daily routines changed, so did media consumption. Streaming video and streaming audio saw boosts, while in-car audio listenership decreased, mostly affecting AM/FM radio and satellite radio.
- Premium memberships versus ad-supported content: Not new to 2020, Spotify charges US users $9.99 per month for a Premium membership with no ads and unlimited audio streaming on any device (mobile, tablet, desktop, and smart home devices.) This model likely brings in far more revenue than ad-supported content. This means that advertisers’ abilities to reach audiences on Spotify are limited, reaching only users who use the free version.
- #SpotifyWrapped: Spotify Wrapped is a digital experience which allows Spotify users to distill an entire year’s worth of listening data into several key insights about which songs, artists, genres (and now also podcasts) a user listened to the most in a year. The resulting insights and playlists are made to be shareable on social media, and typically trend on social media in December each year. The virality and shareability of 2020’s #SpotifyWrapped caused Spotify’s stock prices to surge in early December 2020.
Our team is excited to see what changes 2021 brings to the streaming audio landscape as routines (hopefully) shift once again to a post-COVID environment.