The perception that free ad-supported versions of streaming services such as Spotify and Pandora are taking a big bite out of AM/FM radio's shares across all key demographics is unfounded, according to Edison Research's fourth quarter 2021 “Share of Ear” report.
The company's measure of daily reach and time spent for all forms of audio based on its survey of 4,000 Americans, representing a one-year rolling average, shows that regardless of demo, the combined share of ad-supported Pandora and Spotify is down or flat in Q4 2021 compared to Q4 2017. The change is most notable among persons 18-34, where that combined share plummeted from 23% to 17%.
Edison's study also shows ad-supported Pandora's share of audio time spent has declined by 47% since Q4 2016, from 7.1% to 3.8%, while ad-supported Spotify's share has stood still at 1.6%. “Pandora is collapsing – they've been in a steady erosion over the last five years or so, and ad-supported Spotify is small and never grows,” Cumulus Media Chief Insights Officer Pierre Bouvard says. “Same thing for the ad-supported channels of Sirius XM which are the spoken word, always a very small share for them.”
While streaming's overall share of audio time among persons 18+ has grown since 2017, it has done so at the expense of consumers' owned music – as in digital tracks, CDs or vinyl – as opposed to AM/FM radio. Over the past four years, the share from streaming from either ad-supported or ad-free/subscription-based Pandora or Spotify, which was even with owned music based on Q4 2017 data, stands at 64% vs. owned's 36% for Q4 2021.
Over the same period, digital streaming of AM/FM radio has grown across all demos, most notably up from 7% to 10% among 18-34s and 6% to 10% among 25-54s. Streaming's percentage of total AM/FM listening has also grown among 18+, from 7% in Edison's fourth-quarter 2016 measurement to 11% in Q4 2021.