Magna forecasts $1 billion in U.S. podcast ad revenue by 2022 in U.S. audio advertising breakout

RAIN News, September 9th 2019

IPG Mediabrands’ Magna division has projected that podcast ad spending in the United States will surpass $1 billion in 2022. That forecast starts with an estimated $679 million in spending this year. The recent podcasting report from Magna found that this segment is responsible for 3% of the U.S. audio ad marketplace, currently valued at $16.2 billion. Under its 2022 prediction, podcast ads will up their share of the audio pie to 8.2%.

This report is more conservative on the podcast advertising market than previous studies, such as the IAB/PwC forecast released in June. That analysis also projected 2019 U.S. podcast ad revenue at $679 million, but set 2021 as the year when podcast advertising will break the $1 billion milestone in the U.S.

Magna’s report noted that the company does not expect podcast advertising to replace the massive revenue generated by linear radio, but the projection does call for podcasting to eat a bigger share over time (see the table below). Linear radio is predicted to see 2019 revenue of almost $13.15 billion. However, radio revenue has been gradually falling, and Magna expected that rate of decline to increase in the next few years, by four to five percent negative growth per year (also in the table below).

The study is interesting inasmuch as it breaks out local radio, total linear radio, digital audio radio broadcasters (streaming radio), digital audio pure players excluding podcasts, and podcasting. All these categories are projected to grow revenue at some rate, except for linear radio.

Boris Johnson’s Unconservative Party

BORIS JOHNSON has been Conservative leader for little more than a month, and until this week had appeared in Parliament as prime minister only once. But that did not stop him carrying out the biggest purge in the party’s history on September 3rd. After a backbench rebellion led to a resounding defeat of his uncompromising Brexit policy, 21 moderate Conservative MPs, including seven former cabinet members and a grandson of Winston Churchill, had the whip withdrawn and were told they would not be allowed to stand as Tories at the next election.

It was the most dramatic step in a long process: the transformation of Britain’s ruling party from conservatives into radical populists (see article). The capture of the Tories by fanatics determined to pursue a no-deal Brexit has caused the party to abandon the principles by which it has governed Britain for most of the past century. With an election looming, and the Labour opposition captured by an equally radical hard-left, the Tories’ sinister metamorphosis is terrible news.

Junking more than 40 years of cautious pro-Europeanism after the referendum of 2016 was itself a big change. But under Mr Johnson and his Svengali-like adviser, Dominic Cummings, who masterminded the Leave campaign, the Tory party has become not just pro-Brexit but pro-no-deal. Mr Johnson claims he is working flat-out to get a better withdrawal agreement from the EU. Yet in his flailing performance before MPs this week, like an undergraduate bluffing his way through a viva, he was found out. He has no real proposal for replacing the contested Irish backstop. Reports that Mr Cummings privately admitted the negotiations in Brussels are a “sham” ring all too true. Mr Johnson’s unconservative plan seems to be to win a quick election, either after crashing out with no deal or, as it has turned out, claiming to have been thwarted by “enemies of the people” in Parliament.

The religion of no-deal has wrecked other Conservative principles. Sajid Javid, the fiscally prudent chancellor, this week dished out billions of pounds worth of pre-election goodies. He gave money to public services without demanding much in the way of reform, and focused on day-to-day spending rather than investing for the future. Spending power was supposedly being kept aside to cope with a no-deal crash-out. But faith dictates that no-deal will do no great harm to the economy, so no safety-net is required. To show any such caution, as Mr Javid’s predecessor (now an ex-Tory) did, is a form of heresy.

The most unconservative behaviour of Mr Johnson’s government has been its constitutional recklessness. Not only has it suspended Parliament (having said that it would not), so as to limit MPs’ time to legislate on Brexit (which, again, it said was unconnected). It also toyed with using even more underhand tactics, such as recommending that the queen not enact legislation passed by Parliament. Would the government abide by the law, a cabinet ally of Mr Johnson was asked? “We will see what the legislation says,” he replied. In a country whose constitution depends on a willingness to follow convention and tradition, even making such a threat weakens the rules—and paves the way for the next round of abuses, be it by a Labour or Tory government.

This week there were still just enough conservatives in the Conservative Party to block the most dangerous part of Mr Johnson’s Brexit policy. As we went to press, a bill designed to stop no-deal was making its way through the House of Lords. But the defeat of the government, and its loss of any sort of majority, points towards an election. It will be a contest in which, for the first time in living memory, Britain has no centre-right party. Nor, thanks to Labour’s far-left leader, Jeremy Corbyn, will it have a mainstream opposition. Instead the two leading parties will, in their different ways, be bent on damaging the economy; and both will pose a threat to Britain’s institutions. Brexit’s dreadful consequences continue. 

Acast lands investment of €25 million for R&D

Acast as secured a new round of financing from the European Investment Bank. The deal is a quasi-equity financing agreement for €25 million as part of the Investment Plan for Europe, also known as the Juncker Plan. The move has the characteristics of an equity stake without the EIB actually owning any shares in the podcast company. Acast will use the money to support further research and development activities, as well as continuing to develop its distribution platform for audio content.

“The main motivation for creating the Juncker Plan was to provide alternative sources of financing to innovative companies in need of financial support that struggled to obtain a traditional bank loan, and as a result to boost jobs, growth and investment in the EU,” said Valdis Dombrovskis, a vice president with the European Commission. “Today’s agreement between the EIB and Acast does exactly that, and it does so using a novel form of financing. I wish the company every success with its expansion plans.”

“The EIB’s investment and support of Acast is a true milestone in our company’s growth as well as in the future of the global podcasting infrastructure,” Acast Chief Business Officer Leangro Saucedo said. “Today, we are one step closer to our goal of seeking out and supporting all the audio storytellers of the world – giving their stories the audience they deserve.”

“Everyone loves a good podcast, but it can be hard to make a living off of this type of infotainment,” EIB Vice-President Alexander Stubb said. “I think it’s important that a European provider for this type of service exists, which gives all voices the possibility to be heard. Acast truly serves as a one-stop-shop for listeners, creators and advertisers, and we’re happy to support the company in its expansion.”

Daniel Ek on podcasting, audiobooks, global ambition, and competitors

As is often the case, much of the interesting content during Spotify’s Q2 earnings call this week transpired during the investor Q&A. There, CEO Daniel Ek and Head of Investor Relations Paul Vogel spoke of the company’s global ambitions, how podcasting is shaking out for Spotify, and a mention of audiobooks. (Take note, Audible.)

“Our ambition is to be in every market in the world.” –Daniel Ek, CEO Spotify

Surveying the globe, Daniel Ek took special note of Africa, Russia, and South Korea. Spotify plays in India, and Ek expressed satisfaction with how that enterprise is developing.

The conversation around podcasting ranged widely. One investor asked about developing a new technology stack for podcasting — modernizing the legacy RSS-based distribution. Ek appeared to agree with the need, comparing RSS to analog radio. : “Well, the tech stack in podcasting today is as embedded in RSS feeds. They don’t know anything about your likes or dislikes. It’s like an FM radio ad. Maybe best you know something about the demo of the audience you’re delivering against.”

Spotify can do considerably better, Ek hypothesized, especially when it comes to smart targeting of ads.

The Spotify exec observed a couple of times that podcasting is still a young category — “an entirely new medium, not unlike maybe radio and just general audio services” (perhaps an exaggeration) and he rolled out the “early innings” standby metaphor.

When it comes  to podcast topicality, Ek seemed to be impressed with a broadening of listening trends: “So the number of verticals, while the general perception today is that it’s typically pretty male-dominated, very techy talk shows, the engagement that we’re seeing in terms of our content is we’re seeing good progress across scripted content, true crime being a massive category for us and growing very, very fast. But we’re also seeing, of course, music podcasts growing very fast, which if you look historically in podcasting, that’s not been a big category, but that’s becoming a much bigger one.”

He said listening should continue to broaden as new creators come into the space.

Wait — did somebody ask about audiobooks? Yes, an investor from Macquarie. Ek’s reply: “Overall, interesting segment. Again, my view is it’s obviously massively growing. I would say though that when you look at the podcast that we have seen, true crime, there really isn’t that much of a difference between those and some of the audiobooks that are available. So I think in the future of audio, we’re going to have an interesting development where we need to think long and hard about what are the optimal formats for consumers. Are we talking about an eight-hour type of programming or two-hour programming? And there’s is going to be a ton more experimentation, I think, across the board.”

What about Apple as a competitor, one investor dared to query. “All of our competitors have their relative strengths,” Daniel Ek yawned.

Spotify’s big bet on podcasts is starting to pay off 21

Its podcast audience has doubled since last year

Spotify’s podcast audience is experiencing huge growth, the company revealed in its earnings report today. The company reports that its podcast audience has grown by over 50 percent since the last quarter, and that it has almost doubled since the start of the year. The company also saw subscriber numbers grow overall, with its total number of premium subscribers growing by 9 percent to 108 million compared to the last quarter, and monthly active users growing to 232 million, an increase of 7 percent that The Wall Street Journalnotes exceeded expectations.

The growth in its podcasting business suggests that Spotify’s investment is starting to pay off. Earlier this year the company acquired the podcasting network Gimlet Media as well as Anchor, which produces tools to let creators build, publish, and monetize podcasts. The following month, it acquired Parcast, another podcast network. At the time of the Gimlet acquisition the company said it expected to invest as much as $500 million in its podcasting business, with the company’s CEO Daniel Ek predicting that 20 percent of all listening on the platform will eventually come from podcasts.

Last month Spotify announced a multiyear podcasting deal with Higher Ground Productions, Barack and Michelle Obama’s media company. It will result in podcasts that are exclusive to the streaming service. The deal is similar to the one Higher Ground made with Netflix, which will see its first release with American Factory later this year. Exclusive podcasts will be an important element in getting people to try Spotify rather than sticking with their existing podcasting apps.

Despite a 31 percent year-over-year rise in subscriber revenue to €1.5 billion (around $1.7 billion) and a 34 percent rise in ad-supported revenue to €165 million (around $184 million), Spotify is continuing to lose money with an operating loss of €3 million (around $3.3 million). Its investment in podcasting may be starting to pay off, but sustained profitability remains elusive.

Digital Audio Ad Serving Template

New Standard for Audio Ads Aims to Strengthen Growth in Sector While Forming Basis for Universal Application

NEW YORK, NY (September 8, 2014) – The Interactive Advertising Bureau (IAB) has released “Digital Audio Ad Serving Template (DAAST) 1.0” for public comment. Created by the IAB Digital Audio Ad Serving Template Working Group and utilizing principles learned from the organization’s highly successful Digital Video Ad Serving Template (VAST), DAAST provides a common set of specifications for audio ad delivery, execution, and reporting across a wide variety of devices and platforms. It is the organization’s first technical solution addressing the fragmented audio advertising market.

DAAST also addresses the concept of “thin client” devices, such as some in-car audio players that have limited functionality for tracking ads or identifying when they play.

“Since IAB introduced VAST, we have seen exponential growth in the digital video advertising market, and we expect to see a similar trend in the audio advertising space with DAAST,” said Scott Cunningham, Vice President, Technology and Ad Operations, IAB. “In addition to bridging the gap between proprietary codes, DAAST goes a long way toward making possible a true omni-channel approach to digital advertising. By refining and extending this solution through iterations in the years ahead, we can create a universal standard that allows any digital ad to be delivered, played, and tracked for any device on a global-scale.”

To increase adoption across the industry by making it easier for ad servers to reach publisher platforms, DAAST requires audio players to support linear ads and one or optionally more of the following ad formats:

  • Companion ads
  • Ad pods
  • Skippable ads

“Bringing consistency to the digital audio advertising space is key to its potential growth, and we aimed to accomplish that with DAAST,” said Benjamin Masse, Senior Vice President and General Manager, Advertising, Triton Digital, and co-Chair of the IAB Digital Audio Ad Serving Template Working Group. “Currently, advertisers must create separate versions of their audio ads, one for each type of player in which they might be shown. By requiring that all audio players support at least one DAAST-compliant format, we are helping advertisers increase demand while maintaining flexibility for player manufacturers.”

“DAAST is a major breakthrough for digital audio advertising that is a crucial first step toward creating a truly universal standard that covers audio, video, and all other digital advertising,” said Chris Doe, Vice President, Emerging Media Products, Vindico, and co-Chair of the IAB Digital Audio Ad Serving Template Working Group. “With music streaming services gaining prominence, we must ensure that audio ads get their chance to flourish in a unified marketplace. Moving forward, we can expand the standards introduced by DAAST and VAST so they apply to all advertising on all devices.”

To review a copy of the public comment version of DAAST 1.0, please visit

The public comment period will run through (Friday, October 10, 2014), after which the IAB Digital Audio Ad Serving Template Working Group will evaluate the comments received, make any necessary changes, and release a final version. Comments are being accepted by email at (

In tandem, IAB is also releasing a “Digital Simplified” brief on DAAST to provide the marketplace with an easy-to-understand overview of the template, available at

About the IAB
The Interactive Advertising Bureau (IAB) is comprised of more than 600 leading media and technology companies that are responsible for selling 86 percent of online advertising in the United States. The IAB empowers the media and marketing industries to thrive in the digital economy. The organization educates marketers, agencies, media companies and the wider business community about the value of interactive advertising. Working with its member companies, the IAB evaluates and recommends standards and practices and fields critical research on interactive advertising. Founded in 1996, the IAB is headquartered in New York City.

What is HLS Streaming and when should you use it?

Until fairly recently, Adobe’s Flash video technology had been the main method of delivering video via the internet. Today, however, there’s a major shift taking place in the world of online video. Over the past decade, Adobe’s Flash protocol has been replaced increasingly by video delivered using protocols like HLS streaming and played in HTML5 video players.

For broadcasters and viewers alike, this is a largely positive change. HTML5 and HLS are open specifications, which means that users can modify them to their specifications and anyone can access them free of cost. These newer HTML5 and HLS streaming protocols also safer, more reliable, and faster than earlier technologies.

For content producers, there are also some major advantages to using these new live streamingtechnologies. However, there are disadvantages in this realm of content production. In particular, these downsides include the work involved in replacing legacy systems and technologies with new standards that may not work the same across all platforms. As will all technological innovations, growing pains are inevitable.

To get you up to speed on these changes, we’ve geared this article at both longtime broadcasters and newcomers to streaming media, all with a focus on HLS streaming. Our goal here is to make this content relevant for all kinds of streamers. Whether you do live streaming of sports events, or you want to stream live video on your website, we hope you’ll find it useful! We’ll cover basic streaming protocol definitions, discuss other streaming protocols, and, of course answer the question posed in the title of this essay: what is HLS streaming and when should you use it?

What is HLS?

HLS stands for HTTP Live Streaming. Put succinctly, HLS is a media streaming protocol for delivering visual and audio media to viewers over the internet.

The HLS streaming protocol chops up MP4 video content into short, 10 second chunks. HTTP then delivers these short clips to viewers. This technology makes HLS compatible with a wide range of devices and firewalls. Latency (or lag time) for HLS live streams compliant with the specification tends to be in the 15-30 second range. This is certainly an important factor to keep in mind.

When it comes to quality, HLS streaming stands out from the pack. On the server side, content creators often have the option to encode the same live stream at multiple quality settings. In turn, players can dynamically request the best option available, given their specific bandwidth at any given moment. From chunk to chunk, the data quality can differ.

For example, in one moment you might be sending full high-definition video. Moments later, a mobile user may encounter a “dead zone” in which their quality of service declines. The player can detect this decline in bandwidth and begin delivering lower-quality movie chunks at this time. The point of all this? HLS streaming reduces buffering, stuttering, and other problems.

HLS streaming format history

Apple originally launched the HLS streaming protocol in summer 2009. They timed this release to coincide with the debut of the iPhone 3. Previous iPhone models had experienced many problems with streaming media online, partially because these devices often switched between Wi-Fi and mobile networks mid-stream.

Prior to the release of HLS, Apple used the Quicktime Streaming Server as its media streaming standard. Though it was a robust service, Quicktime used non-standard ports for data transfer and so firewalls often blocked its RTSP protocol was often blocked. Combined with slow average internet speeds, these limitations doomed Quicktime Streaming Server. As a result, this early experiment in live streaming technology never reached a wide audience. That said, HTTP Live Streaming ultimately drew from the lessons learned from creating and rolling out the Quicktime service.

Technical overview

HLS streams are generated on the fly, and an HTTP server stores those streams. The protocol splits video files, as we’ve mentioned above, are into short segments with the .ts file extension (standing for MPEG2 Transport Stream).

The HTTP server also creates a .M3U8 playlist file (e.g., manifest file) that serves as an index for the video chunks. The playlist file serves as a bank that points towards additional index files for each of the existing quality options. Even when you choose to only broadcast using a single quality option, this file will still exist.

A given user’s video player software can detect deteriorating or improving network conditions. If either occur, the player software reads the main index playlist, determines which quality video is ideal, and then reads the quality-specific index file to determine which chunk of video corresponds to where the viewer is watching. And best of all–the entire process is seamless for the user.

HLS also supports closed captions embedded in the video stream. To learn more about HLS, we recommend the extensive documentation and best practices provided by Apple.

Review of video streaming protocols

Several companies have developed a variety of streaming solutions through the use of media streaming protocols. Generally, each of these solutions has represented a new innovation in the field of video streaming. Similar to the the HD-DVD vs. Blu-Ray format wars, or the older Betamax vs. VHS showdown, there are nonetheless conflicts that arise. HLS is currently the best option for streaming media protocols, but it wasn’t always that way—nor will it remain so forever. Let’s review several past and current streaming protocols to better understand the innovations that the HLS streaming protocol offers today.


Real-Time Messaging Protoco (RTMP) is a standard originally developed by Macromedia in the mid-200s. Designed for streaming audio and video in the mid-2000s, this protocol is frequently referred to simply as Flash. Macromedia later merged with Adobe, which now develops RTMP as a semi-open standard.

For much of the past decade, RTMP was the default video streaming method on the internet. Only with the recent rise of HLS have we seen a decline in the usage of RTMP. Even today, most streaming video hosting services work with RTMP ingestion. In other words, you deliver your stream to your online video platform in RTMP stream format. From there, your OVP usually delivers your stream to your viewers via HLS.

In recent years, however, even this legacy use of RTMP streams is beginning to fade. More and more CDNs (Content Delivery Networks) are beginning to depreciate RTMP support.


Known as Adobe’s next-gen streaming, HDS actually stands for HTTP Dynamic Streaming. Designed for compatibility with Adobe’s Flash video browser plug-in, the overall adoption of HDS is relatively small compared to HLS.

Here at DaCast, we use HDS to deliver some of our VOD (Video On Demand) content. For devices and browsers that do support Flash video, HDS can be a robust choice with lower latency. Like HLS, the HDS protocol splits media files into small chunks. HDS provides advanced encryption and DRM features. It also uses an advanced key frame method to ensure that chunks align with one another.

Microsoft Smooth Streaming

Microsoft Smooth Streaming (MSS) is Microsoft’s version of a live streaming protocol. Smooth Streaming also uses the adaptive bitrate approach, delivering the best quality available at any given time.

First introduced in 2008, MSS was one of the first adaptive bitrate methods to hit the public realm. MSS protocol helped to broadcast the 2008 Summer Olympics that year. The most widely used MSS platform is actually the XBox One. However, MSS is one of the less popular streaming protocols around today. HLS should be considered the default method over this lesser used approach.


Last up, the newest entry in the streaming protocol format wars is MPEG-DASH. The DASH stands for Dynamic Adaptive Streaming (over HTTP).

MPEG-DASH comes with several advantages. First of all, it is the first international standard streaming protocol based on HTTP. This feature has helped to quicken the process of widespread adoption. For the moment, MPEG-DASH is a new protocol and isn’t widely used across the streaming industry. However, like the rest of the industry, we expect MPEG-DASH to become the de facto standard for streaming within a couple of years.

One major advantage of MPEG-DASH is that this protocol is “codec agnostic.” Simply put, this means that the video or media files sent via MPEG-DASH can utilize a variety of encoding formats. These encoding formats include widely supported standards like H.264, as well as next-gen video formats like HEVC/H.265 and VP10.

HLS streaming advantages

As this article highlights, HLS has a major advantage in terms of streaming video quality. Broadcasters can deliver streams using the adaptive bitrate process supported by HLS. That way, each viewer can receive the best quality stream for their internet connection at any given moment.

The HLS streaming protocol is also widely supported. Originally limited to iOS devices like iPhones, iPads, and the iPod Touch, all Google Chrome browsers, in Safari and Microsoft Edge, and on iOS, Android, Linux, Microsoft, and MacOS platforms now natively support the HLS streaming protocol.

Takeaway: For now and at least the shorter-term future, HLS is the definitive default standard for live streaming content.

When to use HLS streaming?

We recommend adopting the HLS streaming protocol all of the time. It is the most up-to-date and widely used protocol for media streaming. It does have one disadvantage, which we mention above–HLS has a relatively higher latency than some other protocols. This means that HLS streams are not quite as “live.” I nfact, with HLS viewers can experience delays of up to 30 seconds (or more, in some cases). However, for most broadcasters this isn’t a problem. The vast majority of live streams can handle a delay like that without causing any sort of user dissatisfaction.

Streaming to mobile devices

HLS is mandatory for streaming to mobile devices and tablets. Given that mobile devices now make up the majority of internet traffic (around 75% of traffic in 2017), HLS is essential for these users as well.

Streaming with an HTML5 video player

Native HTML5 video doesn’t support RTMP or HDS. Therefore, if you want to use a purely HTML5 video player, HLS is the only choice. Along with reaching mobile devices, these considerations point towards HLS as the default standard. If you’re stuck using Flash technology for the moment, RTMP will be a better delivery method—but only if you have no other option.

Building an RTMP -> HLS workflow

If you’re using a service like DaCast for your online video platform, you’ll need to build a workflow that begins as RTMP. This is much simpler than it sounds. Essentially, you simply need to configure your hardware or software encoder to deliver an RTMP stream to the DaCast servers. Most encoders default to RTMP, and quite a few only support that standard.

Our CDN partner, Akamai, ingests the RTMP stream and automatically rebroadcasts it via both HLS and RTMP. From there, users default to the best supported method on their own devices.

Using HLS is relatively straightforward. On DaCast, all live streams default to HLS delivery. On computers that support Flash, we do fall back on RTMP/Flash in order to reduce latency. However, HLS is supported automatically on every DaCast live stream, and used on almost all devices.

HLS streaming is delivered by means of an M3U8 file. This file is essentially a playlist that contains references to the location of media files. On a local machine, this would be file paths. For live streaming on the internet, an M3U8 file will contain a URL. That’s the URL on which your stream is being delivered.

Using an HTML5 video player

We’ve written extensively about the transition from Flash-based video (usually delivered via RTMP) to HTML5 video (usually delivered using HLS). Check out this blog for more on that subject, including why it’s important to use an HTML5 video player.

If you’re streaming over the DaCast platform, not to worry! You’re already using a fully compatible HTML5 video player. Content delivered via DaCast defaults to HTML5 delivery. However, it will use Flash as a backup method if HTML5 is not supported on a given device or browser. This means that even older devices will have no problem playing your content over your DaCast account.

Of course, some users may wish to use a custom video player. Luckily, it’s quite simple to embed your HLS stream in any video player. For example, if you’re using JW Player, just insert the M38U reference URL into the code for your video player. For example:

var playerInstance = jwplayer("myElement");
file: "/assets/myVideoStream.m3u8",
image: "/assets/myPoster.jpg"

The future of live streaming

While HLS is the current gold standard for live streaming, it won’t stay that way indefinitely. We expect MPEG-DASH to become increasingly popular in the coming years.

As MPEG-DASH becomes more and more commonly used, we’ll see other changes as well, like the transition away from h.264 encoding to h.265/HEVC. This new compression standard provides much smaller file sizes, making 4K live streaming a real possibility.

However, that time hasn’t come yet. For now, it’s more important to stick with the established standards in order to reach as many users as possible.


Our goal in this article has been to introduce you to the HLS protocol for streaming media. We’ve discussed what HLS is, how it works, and when to use it. We’ve also reviewed some alternative options in terms of streaming protocols. After reading, we hope you now have a solid foundation in HLS streaming technology and its future.

To recap, HLS is widely supported, high-quality, and robust. All streamers should be familiar with the protocol, even if they don’t understand all the technical details. This is true for all kinds of streaming, including if you want to stream live video on your website via the DaCast online video platform.

You can do your first HLS live stream today with our video streaming solution. Take advantage of our free 30-day trial (no credit card required).

External Market Data

Reuters Institute Digital News Report 2019

  • This year’s report comes amid a complex set of challenges for the news industry specifically and for our media environment more broadly, including the ongoing disruption of inherited business models for news, constant evolution in how people use digital media (and the ways in which we are constantly reminded of how some of the information they come across is untrustworthy and sometimes spread with malicious intent), and social upheaval associated with the rise of populism and with low trust in many institutions.
  • Against this background we are seeing some real shifts of focus. News organisations are increasingly looking to subscription and membership or other forms of reader contribution to pay the bills in a so-called ‘pivot to paid’. Platforms are rethinking their responsibilities in the face of events (Christchurch attacks, Molly Russell suicide) and regulatory threats, with Facebook rebalancing its business towards messaging apps and groups – the so-called ‘pivot to private’. Meanwhile audiences continue to embrace on-demand formats with new excitement around podcasts (New York Times, Guardian) and voice technologies – the so-called ‘pivot to audio’.
  • Despite the efforts of the news industry, we find only a small increase in the numbers paying for any online news – whether by subscription, membership, or donation. Growth is limited to a handful of countries mainly in the Nordic region (Norway 34%, Sweden 27%) while the number paying in the US (16%) remains stable after a big jump in 2017. 
  • Even in countries with higher levels of payment, the vast majority only have ONE online subscription – suggesting that ‘winner takes all’ dynamics are likely to be important. One encouraging development though is that most payments are now ‘ongoing’, rather than one-offs.
  •  Worries about the quality of information may be good for trusted news brands. Across countries over a quarter (26%) say they have started relying on more ‘reputable’ sources of news – rising to 40% in the US. A further quarter (24%) said they had stopped using sources that had a dubious reputation in the last year. 
  • More people say they actively avoid the news (32%) than when we last asked this question two years ago. Avoidance is up 6 percentage points overall and 11 points in the UK, driven by boredom, anger, or sadness over Brexit. People say they avoid the news because it has a negative effect on their mood (58%) or because they feel powerless to change events.

External Market Data

The Rise of Digital Audio Advertising 2019

  • This year, 86% of advertising agencies and 66% of brand advertisers said that they now see digital audio as a key part of their integrated media strategies. 
  • 75% of advertisers plan to increase spend across podcasts in the next 12 months. 
  • With 85% of advertisers and agencies set to increase their investment in digital audio within the next year alone, it’s undeniable that digital audio has become a major player in a mature advertising market. 
  • Confidence in digital audio advertising has grown in the past year. People in the UK are consuming more digital audio than ever before, whether it is digital radio, podcasts or streamed music. As a result, 86% of agencies and 66% of advertisers surveyed now see digital audio as an important part of most media strategies¹. 
  • Digital audio advertising’s value proposition is becoming clearer. Digital audio is now demonstrating its applications to industry stakeholders more successfully. They believe it is effective in reaching listeners in a variety of contexts, for example reaching consumers on the go (85%)², and while they are doing lots of different activities (79%)³. As a result, 81% of survey respondents said that digital audio means advertisers can be really contextually relevant. 
  • Digital audio is increasingly perceived by agencies and advertisers as a rich creative medium. 78% of survey respondents think that listeners are highly engaged with digital audio because of the great content that’s available5. 
  • Digital audio’s role in a campaign is changing, as agencies increasingly experiment and innovate. Survey respondents see digital audio as the medium developing the most innovative opportunities for advertisers (53% selected the medium)6. 
  • Digital audio still faces a number of challenges. There is still work to do around the effective measurement and attribution of digital audio. 53% of respondents think that streaming audio enables them to target the right people at the right time but some respondents lack awareness about the availability of measurement and attribution tools. 
  • The outlook for digital audio advertising is positive as more advertisers opt to build it into their media strategies. 85% of survey respondents said they will increase their investment in digital audio in the next 12 months8.

Spotify reaches 108 million subscribers, inches closer to profitability with Q2 results

Spotify’s second quarter financial results included notable growth in both its monthly active users and its subscriber base. The company now boasts 232 million monthly active users, up 29% on-year, and 108 million subscribers, a lift of 31% from the year-ago period. Europe was the largest region for the subscription audience, responsible for 40% of that base, followed by North America with 30% and Latin America with 20%.

Quarterly revenue for the company reached nearly €1.67 billion, marking 31% growth from the same period last year. Subscriptions were responsible for €1.5 million of that total, also up 31%. Ad-supported revenue for the platform totaled €165 million, up 34%.

Spotify continues to operate at a loss, but it has been steadily moving toward profitability. The quarterly operating loss for the company was €3 million, compared with €47 million in the first quarter of 2019 and €90 million in the second quarter of 2018.

The company also made a special note of its efforts in podcasting in its shareholder letter. Spotify said that tens of millions of users are now tuning in to its podcasts every month, with its podcast audience nearly doubling since the beginning of the year.

It also stated that it has reached licensing agreements with two of its four major label partners. Spotify did not specify which key players it had landed deals with, but noted that it is “in active discussions” with the other two businesses.