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Increase in Recorded Growth for Radio and Other Audio Industries

PwC’s Annual Report Points to More Growth for Radio and Other Audio Industries.

The audio marketplace, including radio, podcasts and music, is on track to top pre-pandemic revenue numbers this year with total revenue pacing toward a three percent gain from a year ago in the U.S. That is according to PwC’s annual Global Entertainment and Media Outlook.

The forecast, now in its 23rd year, is the most granular of any released as analysts slice and dice the data to show which segments of the audio market are enjoying the fastest growth rates. This year PwC thinks total U.S. radio revenue will reach $21.9 billion, up more than $700 million from last year.

The number likely to get the attention of most people in radio is the total that comes from traditional radio advertising. The segment remains the biggest contributor to the overall radio market tally, and PwC forecasts it will rise 5.5% to $12.8 billion this year. It also estimates radio’s online ad revenue will add another $3.1 billion this year, a seven percent increase from 2021.

Despite slower car sales, PwC thinks satellite radio revenue will continue to climb in the U.S. It is projected to rise 3.4% to more than $6 billion. That includes a forecasted 15.5% increase in satellite radio advertising revenue, which analysts estimate will total $219 million this year.

“AM/FM radio still has an important role to play in the audio ecosystem,” the PwC report says. “Listening time was helped during the pandemic by radio news broadcasts, as people followed the changing situation day by day. Working from home also helped to boost radio consumption, though in-car listening was negatively affected because fewer people commuted to work. Little change in listening time is expected, because there continues to be a mix of working from home and commuting, and the radio will continue to provide entertainment.”

PwC notes that Morgan Stanley research found that AM/FM radio accounted for 36% of U.S. adult listening time in 2021, compared to 29% in 2020 and 42% in 2019. Still, it calls radio a “major contributor” to the wider music, radio and podcasts sector, accounting for 44.9% of global sector revenue in 2021, at $41.8 billion.

“In the U.S., AM/FM radio is still the most popular audio source in vehicles, and in-car listening will be a main battleground for radio players globally,” it says. “There’s competition in the form of infotainment systems and smartphones, which are increasingly used for audio consumption when driving.”

Even so, the U.S continues to host the world’s largest radio market, accounting for 50.7% of the segment’s global revenue according to PwC. It also thinks the “counter measures” taken by broadcasters to expand their digital businesses, especially in podcasting, have allowed the industry to “bounce back” in 2021.

Podcast revenue is expected to grow at a quicker pace than radio. PwC estimates U.S. podcast revenue will climb 15% to slightly more than $1.2 billion in 2022.

The number of global podcast monthly listeners will hit 1.5 billion in 2026, up from 895 million in 2021 according to PwC, which thinks the Asia Pacific region will see the largest absolute gains thanks to the large populations of India and China. PwC thinks those two countries will be responsible for over half of new monthly podcast listeners during the next five years. But for now, the U.S. continues to have the world’s second-largest podcast market by audience size, after China.

PwC says today’s tally of just over 150 million U.S. monthly podcast listeners in 2021, is set to increase at a 4.1% annual growth rate to reach 184 million monthly listeners in 2026.

Worldwide, PwC says there is “still a way to go before the consumer interest in podcasts is effectively monetized.” But that is not the case in the U.S. “The monetization of podcasts is much further along the curve than in other markets,” the report says. It notes podcast ad revenue broke through the $1 billion mark for the first time in 2021. And U.S. podcast revenue is expected to increase at an annual rate of 11.7% to be worth $1.8 billion in 2026.

The podcast outlook reflects what PwC sees happening in the marketplace for streaming music services. It forecasts they will close in on radio with $13.2 billion in total revenue this year in the U.S., a 15% increase from a year ago. And by 2026, PwC thinks the digital streaming music services will have $16.3 billion in total revenue versus $16.7 billion for AM/FM radio.

PwC says streaming accounted for 76.3% of total recorded music revenue in 2021, compared with 57.1% in 2017. “The music streaming market has become intensely competitive,” it says.

First published by InsideRadio. Read original here