Shuffle, subscribe, stream: Consumer audio market is expected to amass listeners in 2024, but revenues could remain modest

Cost, content, and convenience are expected to continue to influence consumer audio market growth

The audio entertainment market will likely reach more people in 2024, largely because there is room for growth in the consumer market. For example, just a small share of global smartphone users (around 14%) pay for a streaming music service.² This represents a lucrative opportunity for platforms, content providers, and the audio industry to fill a gap and attract new audiences. The consumer audio market also provides access to the youngest audiences, namely Generation Zs and Millennials, who have largely grown up with streaming audio services and are most likely to adopt and engage with new technologies, platforms, and services.

More specifically, growth in the audio entertainment market will likely be bolstered by factors including cost, content, and convenience. Many audio formats are available for free, or at a low cost to consumers—which is notable as economic and inflationary pressures persist and people look to cut back on their entertainment spend.³ The content itself is also a big draw for audio consumers—there are songs, podcasts, books, and stations for many interests, genres, and niches—and there is a high supply of new content in the pipeline that is compelling, inclusive, and diverse.⁴ New content will be driven by independent creators entering the music and podcast spaces, and actors who might have been looking for new outlets during the Hollywood strike.⁵ Still, audio entertainment could continue to benefit from its convenience, portability, and the ease of integration into daily life, which is supported in many ways by continued consumer adoption of audio-enabling equipment such as smart speakers, headphones, and earphones.⁶

Integration and innovation will likely contribute to the podcast market

Podcasts are a growing segment of the audio entertainment market in terms of audience, but they have historically struggled to post revenues, let alone profits, due to high operating costs for companies and slow uptake by advertisers. Deloitte predicts that 1.7 billion people globally will listen to podcasts in an average month,⁷ driving the global podcast ad revenues to roughly US$3.5 billion in 2024—a roughly 30% increase in revenue year over year.⁸ This could amount to US$2 in annual revenue per listener. This growth in consumer engagement is expected to be supported by increased integration with other media entities, personalities and creators, and offerings. For example, there may be a trend towards popular TV shows and movies offering companion podcasts to supplement their on-screen offerings and online creators developing their own shows to extend their viral brand—both of which can provide greater diversity of content and draw in wider audiences from other platforms.⁹

Notably, however, could be the expected increased availability of podcasts and stronger show content. Some companies and platforms continue to invest in podcasts, making them more accessible to a larger cohort of people.¹⁰ And while the number of new podcast shows has declined since the pandemic, the number of new episodes has remained stable. This may mean fewer people are experimenting with (and then quickly abandoning) the medium.¹¹ But there is still room for innovation: Some podcast platforms now offer video podcasts,¹² which promises to appeal to those consumers who prefer visual entertainment formats. All these trends will likely draw more listeners and increase monetization opportunities for audio providers, creators, and advertisers alike, which may begin to offset the challenges that have halted profitability thus far.

Audiobooks get a boost from pandemic era reading habits and AI

Book sales and reading saw pandemic bumps, but as people resume their normal activities, listening to books remains a way to integrate reading habits into daily life. Growth in the audiobook market has been trending upwards (due in part to the increase in titles and easier access to audiobooks) and we expect 270 million people worldwide to listen to audiobooks in an average month in 2024—representing an increase in listenership of 15% year over year¹³ and US$26 in annual revenue per listener. As audiobooks increase in popularity, Deloitte predicts that audiobooks will account for approximately six percent of total book sales worldwide, representing a 26% increase in sales year over year.¹⁴ This could bring global audiobook revenues—which are largely driven by subscriptions—to approximately US$7 billion.¹⁵ In the US alone, which is the largest market for audiobooks, we predict that audiobook sales will surpass e-book sales and account for around 10% of book revenues in 2024.¹⁶

With popularity comes competition: With several streaming audio platforms having entered the audiobook market recently, competition is stiff.¹⁷ Platforms with a strong user base for other streaming audio services may be able to capture audiobook market share among their existing audience, especially if they can provide seamless interfaces that make it easy for listeners to consume the bulk of their audio entertainment content in one place.

Generative AI also represents a growth opportunity for the audiobook market with Apple Books and Google Play rolling out books read by AI-generated voices and Google Play offering autonarration for some selected titles.¹⁸ Although using AI to mimic the nuances of human speech is complex, these technologies could extend audio formats' accessibility to a wide range of books.

Growth in streaming audio will likely rely on consolidation and quality

Streaming audio services are popular among consumers, but there is still space in the market for growth and innovation. Deloitte predicts that more than 750 million people globally¹⁹ will subscribe to a streaming music service in an average month in 2024, and revenues will grow by roughly 15% year over year to reach US$23 billion.²⁰ This could amount to US$31 in annual revenue per listener, the most lucrative across these audio formats. It’s worth noting that a segment of this audience, and of the revenues generated, comes from podcasts and audiobooks, both of which are available across several popular streaming audio services.

Subscriber growth on streaming audio services—and with it, revenues—are expected to be driven in part by consolidation and bundling within services, which could offer more value to subscribers and make subscriptions more appealing. For example, Spotify and iHeartRadio offer several audio formats within their apps—from music and audiobooks to podcasts and live events.²¹ Additionally, many services have expanded their subscription offerings and introduced ad-supported tiers, making subscriptions accessible to more listeners, a trend we expect to see adopted across other streaming audio services. Not to mention that resurgence of live concerts and major music tours²²—and the buzz they create—may be adding to streaming music consumption. Some streamers, such as Spotify, are innovating with AI technology to make the music listening experience more personalized to each user.²³ And to appeal to the most dedicated audiophiles who may be late adopters, many streaming services are investing in improving sound quality by rolling out lossless audio (where compression results in no loss of information) and high-fidelity audio features and tracks.²⁴ However, it’s worth noting that lossless audio can’t be accessed with most Bluetooth devices.

Cost and accessibility continue to make radio a popular medium, especially in developing markets

Radio’s free audio entertainment, which is supported by ads, remains resilient amid an ecosystem of paid entertainment services. Inflationary pressures may contribute to its enduring popularity, particularly in developing markets. Deloitte predicts that around half of people globally (or close to four billion people) will listen to radio monthly in 2024, with radio ad revenues reaching US$42 billion, indicating modest (approximately 1.5%) growth year over year.²⁵ Annual revenues per radio listener would amount to US$10.50.

Notably, in the US, consumers across all age groups are likely to listen to radio monthly and young Americans (ages 18 to 34) are slightly more likely to be spending time with radio than live or time-shifted TV.²⁶ While radio listening time may be declining—or stabilizing—in some Western markets,²⁷ in other parts of the world, such as Africa, radio remains a widely used medium, especially for accessing news and information.²⁸

Still, radio broadcasters should consider the changing audio entertainment landscape, namely the shift towards digital offerings in many places and the potential for future FM switch offs.²⁹ If people are listening to music on a smart speaker or in the car, for example, what will make them choose to play a radio station versus a music streaming service? Broadcasters should also consider how generative AI could impact the future of radio: with live AI-powered deejays³⁰ or AI-created advertisements, which could help address a continued challenge for radio broadcasters, namely, generating advertising revenue. On the bright side, advertisers may find less competition in the radio space, as competitors migrate to other audio formats, which lowers cost per milles (CPMs) and offers a cost effective way to reach the masses.

The bottom line: the growth opportunities for audio entertainment

Audio entertainment formats are often overlooked because they are rarely a primary activity. People listen to radio while driving, audiobooks while doing the laundry, podcasts while walking the dog, and streaming music while working. However, being a secondary activity might be audio’s greatest strength.

Though the consumer audio market (especially streaming audio and podcast formats) has traditionally struggled to generate revenue and profits, there are opportunities for providers, content creators, and advertisers to enter and innovate within the industry to attract new audiences, develop bespoke content, and spread brand awareness.

More audio platforms, if confident in their versatility, might consider consolidation and offering multiple audio formats—such as music, podcasts, audiobooks, and live events—in a single application or platform. This could allow platforms to charge more for their subscriptions, while attracting a wider pool of subscribers. In fact, nearly 70% of US consumers surveyed would like to have access to audiobooks, podcasts, and music all in one service.³¹ In addition, audio platforms should work to develop stronger content recommendation and curation systems to avoid consumer churn and keep consumers engaged. However, providers should also calculate what they can do well. For some, that might mean focusing on one audio format and fine-tuning their strategy around that deliverable, rather than trying to do it all.

Audio platforms and providers also have an opportunity to expand their revenue streams and increase profits. Streamers and other audio providers might consider investing in advancements in advertising technology to make audio entertainment more “shoppable”—enabling listeners to hear about a product and instantly buy it with minimal friction³²—therefore attracting sponsors and increasing cashflow.³³ For their part, brands should lean into these audio formats for their ad spots: Ads on podcasts are seen as unintrusive and can reach consumers who are well-aligned with brand interests and missions.³⁴ They could also work with well-known creators, or podcast hosts themselves, to read the ads or endorse their products.

Audio platforms and providers may also want to focus on securing relationships that can make their service easy for consumers to access, for example, having their app available or preset in new cars or integrating with gaming platforms which have proven to be popular for music discovery.

On the other hand, companies that have invested in podcasts to the tune of billions of dollars may want to consider their time horizons. The industry is growing, but not as quickly as many hoped in terms of revenues. Some might decide to exit in 2024. Equally, investing in podcasts may still make sense for some, but given monetization challenges, valuations should be a fraction of what we saw in 2020 through 2022 to generate plausible returns on investments.

Still, other media and entertainment companies could stand to benefit from this burgeoning audio market. Content creators and providers, such as movie and television producers, book publishers, and game developers, may want to think about their audio entertainment strategy early on. This could include developing a companion podcast show, having talent on podcast episodes as guests, producing an audiobook version of a popular print book, or commissioning artists or licensing music for video game soundtracks. This strategy can help to extend the life of IP, franchises, characters, and fictional worlds, reach new audiences, and keep dedicated fans engaged year round.³⁵

Thinking about audio as part of an overall media and entertainment strategy will likely be a sound business practice into 2024.