The Digital Audio Question

Where does digital audio fit in the landscape of digital ad spend? Good question.

Digital audio will have 197.5 million adult listeners in the US this year, but each listener will generate only $36.05 in ad revenues. Radio fares slightly better at $49.10, but both pale next to most other major video platforms.

Audio captures only a small slice of ad budgets. An estimated 4.5% of 2024 media spend in the US will go to audio, with digital audio capturing only 1.8% of that total. Even with steady growth over the next few years, digital audio’s share will drop to 1.6% by 2028, and overall audio will capture only 3.4%. By comparison, in 2024, traditional TV will capture 15.1% and digital video 27.8% of media spend.

Audio ad spend is less than time spent would suggest. The average adult will spend an average of 2:42 each day listening to audio in 2024—21.4% of total media time spent. A little over half of that (1:24) is digital audio.

Monetization via subscriptions limits digital audio ad slots. The relatively low ad spend reflects, in part, limited inventory. Audio subscriptions will account for 63.0% of digital audio revenues in 2024.

Vinyl’s Resurgence. Hype or Reality?

While visiting a Barnes & Nobles bookstore over the weekend, I noticed their vinyl record section had expanded considerably over the last six months and interest in the format has exploded.

Why has vinyl become “sexy” again?

Vinyl album sales have grown for the 17th consecutive year in the United States, according to the Recording Industry Association of America (RIAA) 12.

In 2023, 49.6 million vinyl albums were sold, marking a 14% increase from the previous year.

While volume of sales is a small percentage of worldwide sales compared to streaming consumption, vinyl LPs accounted for more than 40% of album sales in the U.S. last year.

Unique Listening Experience:

Vinyl records offer a unique and tactile experience that digital formats cannot replicate.

The larger format allows for artwork appreciation and proudly displaying records on walls or shelves.

Generational Shift:

Contrary to nostalgia, it’s Gen Z (born roughly between 1997 and 2012) that is driving vinyl sales, not Boomers.

Artists favored by Gen Z, such as Taylor Swift, Billie Eilish, Kendrick Lamar, and Harry Styles, lead vinyl sales.

Gen Z values the collectible aspect of vinyl records, even if they don’t own a record player.

Collectibility and Aesthetics:

Vinyl records are seen as cool and trendy. Their larger size makes them more visually appealing.

Many collectors buy vinyl as collectibles, even if they primarily listen to music digitally.

The nostalgia factor also plays a role, as vinyl evokes memories of earlier eras.

Where People Buy Vinyl:

Common places to buy vinyl include:

Record stores: Independent stores continue to thrive.

Online platforms: Websites like Discogs and eBay.

Flea markets, bookstores and thrift stores: Hunting for hidden gems.

Friends/Other collectors: Trading and sharing vinyl.

Turntable Ownership:

Surprisingly, only 50% of vinyl buyers actually own a record player.

Some collectors view vinyl as art objects or decorative items rather than functional music players.

Vinyl’s resurgence is driven by a combination of aesthetics, nostalgia, and the desire for a unique listening experience. While streaming dominates the music industry, vinyl remains a beloved format for collectors and enthusiasts alike.

Best-selling genres:

Classic Rock Icons like The Beatles, Led Zeppelin, and Pink Floyd maintain a strong presence in the vinyl scene.

Jazz has found a devoted following in the vinyl community.

Blues music also suits the warm, cozy sound of vinyl.

Hip-Hop:

Collectors appreciate the juxtaposition of the genre’s electronic nature with the analog characteristics of vinyl records.

Vinyl releases provide a tactile engagement and authenticity in a digital age.

Electronic and Dance:

Country and Folk:

While rock and jazz dominate, country and folk music also have dedicated followings within the vinyl community.

Soul and R&B:

Classical:

Classical music lovers cherish vinyl for its ability to capture the richness and depth of orchestral compositions.

The Coexistence of Radio & Podcasting

The rise of podcasting has disrupted the traditional radio industry, offering listeners a degree of choice and personalization that terrestrial radio cannot match. However, podcasting is not replacing traditional radio – the two mediums coexist, serving somewhat different purposes and audiences.

Traditional radio's strength lies in its ability to deliver live, locally-relevant content like news, traffic reports, and personality-driven morning shows. It remains an important companion medium, especially for commuters during drive times. Radio also benefits from having a relatively low barrier to consumption.

Podcasting, on the other hand, allows for incredible breadth of niche content that can cater to even the most obscure interests. Podcasts are also consumable on-demand and can be paused/rewound, offering more control.

However, producing high-quality podcasts requires more effort and investment compared to radio shows. This hurdle has kept radio relatively insulated from podcasting's disruption in areas like music, sports, and news where incumbent radio stations have major resource advantages.

Ultimately, both mediums will continue to coexist by playing to their respective strengths. Traditional radio will remain important for live, serendipitous discovery while podcasting will be the medium of choice for on-demand, niche content consumption.

The key divergence is that of lean-back passive consumption (radio) vs. lean-forward active curation (podcasting). As consumer habits evolve, radio may need to further differentiate itself through localization and personality-driven content while podcasters will need to focus on content quality, differentiation, and discoverability to stand out in an increasingly crowded space.

Here are some of the key benefits of traditional radio and podcasting:

Traditional Radio Benefits:

Live and local: Radio excels at providing up-to-the-minute local news, weather, traffic reports and connecting with the local community in a way podcasts cannot match.

Serendipitous discovery: People often stumble upon new music, shows or discussions while casually listening to radio that exposes them to content they may not have actively sought out.

Low friction: No need to select, download or curate content. Just turn it on and it plays.

Sense of shared experience: Major radio broadcasts create a communal feeling of experiencing the same content simultaneously.

Established brands: Legacy radio stations have powerful brands that listeners remain loyal to.

Podcasting Benefits:

Vast content selection: The limitless "long tail" of podcast content means there is something for every niche interest to be served.

On-demand & time-shifted: Listeners can choose what they want, when they want without constraints of a radio schedule.

Deep exploration: The format allows for long-form, deep discussion impossible on radio's shorter time slots.

Mobile & multi-tasking: Easy to consume podcasts while commuting, exercising or doing other tasks.

Global reach: Podcasts can build international audiences unconstrained by radio signal boundaries.

Budget production: Low cost of entry for amateur/indie creators to produce niche podcasts.

Data-driven recommendations: Algorithms can provide highly personalized podcast recommendations.

The balance of convenience vs. control is a key divergence between the mediums.