Image Credit: Haithem Ferdi
A new report indicates Spotify’s ad-supported model is growing faster than their subscription model due to the increase of podcast listeners.
The report from research firm eMarketer analyses the number of Free and Premium Spotify users in the US. By the end of the year, Spotify are thought to have around 41.5 million ad-supported US listeners, a 9.7% increase over 2020 and a greater trend of ad-supported listeners increasing their share on the music streaming service. According to eMarketer overall listeners in the US will increase by 10.1% this year for a total of 83.1 million monthly listeners. If the trend continues, Spotify could see the same number of Free listeners as Premium subscribers by 2025, with an estimated 52 million listeners on each tier, totalling over 100 million listeners. So what’s causing this trend and how will affect me as an artist or music/podcast listener?
The major difference between the plans is of course ad-free listening on Spotify Premium, but there are a few other features unavailable on Spotify Free such as offline playback, on-demand listening on mobile and unlimited skips. eMarketer state the reason for the increase in ad-supported listeners as the rise of podcast listening on Spotify in the past few years. Spotify have heavily invested in podcasts recent, with exclusive shows and new features such as ad-targeting tools.
Spotify are easily the most-listened-to service in the US and many other countries around the world. Next year, Spotify are predicted to reach 30% of US internet users for the first time. However the faster increase in Free listeners is concerning for both Spotify and artists alike. Both parties make significantly more money per stream from paying subscribers than ad-supported listeners. Could this see Spotify further restrict their Free platform going forward?