An All or Nothing Battle for the Future of Audio

CONTACT

hello@stagwellglobal.com

SIGN UP FOR OUR INSIGHTS BLASTS

Marketing Frontiers is a new series from Stagwell exploring the methods, mediums, and messes modern marketers will grapple with over the next decade as they chart transformation in the discipline. This March, Stagwell is exploring Audio.

TL;DR:

Consumers desire a single platform to satisfy all their listening needs, making the audio streaming wars a hotter competition for attention than video and TV. 

The success of global entertainment content in recent years  presents a clear opportunity for content development in audio.   

Audio streaming is still a nascent space – so prioritize identifying early gaps or “deserts” that can become substantial growth opportunities 

The audio streaming wars have been back in the spotlight in recent weeks following a high-profile boycott of Spotify launched by rock legend Neil Young in protest over COVID misinformation on the platform. Across social media, there has been fierce debate about how much responsibility streaming services should take for the content they host—and what ethical and financial obligations these platforms have to the creators who depend on them. 

There’s a reason that these debates attract so much media and consumer interest. It’s becoming increasingly clear that the audio wars are a zero-sum game—much more so than TV and film. As a result, it’s impossible to separate the fate of giants like Spotify from the fate of the audio streaming industry at large. 

Why is it zero-sum game?  

Unlike video streaming, where the average consumer has a subscription to five different services, 83% of Americans prefer to turn to a single audio app to satisfy all their listening needs. And 86% of consumers say that they’re unlikely to start paying for a new audio streaming service within the next six months. 

The barriers to entry in this market are exceptionally high. Most consumers simply aren’t willing to use multiple services to track down all the music and podcasts they want to listen to. And once they’ve found a service they like, they’re unlikely to jump ship—especially since doing so usually means abandoning the playlists they’ve lovingly curated over time. 

So, what can brands do to attract new users with audio content such a cut-throat and competitive environment? Here are three recommendations from our research: 

Find ways to make your users feel closer to the creators they love 

Consumers don’t want to be passive listeners anymore; they want to immerse themselves in the creator economy and feel like part of an active, thriving community. 69% of listeners say that they want to do more to support their favorite creators—for example, by buying merch, attending live events, or engaging in micro-payments. And two thirds of them are interested in one day learning how to create audio content themselves. 

Focus on creating a truly global content library 

The success of overseas streaming content like Squid Game and Money Heist demonstrates that Americans are increasingly willing to engage with media from outside their own country. And the data suggests that this is just as true for audio content. 7 in 10 Gen Zs and Millennials use podcasts as a way of virtually travelling to new places and hearing new perspectives, and 42% of consumers say they’ve started listening to cross-cultural podcasts within the past year. 

Identify “audio deserts” and create content to fill those gaps  

Despite the boom in audio content over the last few years, not all audiences have been equally well-served by the content on offer. For example, Black and low-income consumers are more likely than other groups to say that they’re not interested in the audio content currently available on the market. Identifying and targeting these audiences that have, so far, been left behind by the streaming boom can help your platform create a resilient niche for itself. And as evidenced by the strong mix of more diverse content dominating the entertainment wars on social and streaming properties, engaging with these audiences can be great for driving growth.  

For more on the listening habits of consumers, and what they mean for streaming services, see our full report: Welcome to the Future of Digital Audio.