Photo Credit: Edison Research
A new study from Edison Research finds ad-supported streaming has more listeners than its paid, ad-free counterparts.
For decades, music on the radio was the most accessible and free way to listen to music. But radio stations have traditionally been supported by ads, so listeners were well accustomed to hearing them between songs. The only way to get an “ad-free” experience was by purchasing an album on vinyl, tape, or CD.
These days, thanks to streaming services like Spotify, Apple Music, and YouTube, many listeners are willing to pay a premium price to avoid ads altogether.
But newly released data from Edison Research reveals that in the US, most people spend the majority of their daily audio time with ad-supported sources (64%), compared to ad-free premium sources (36%). Ad-supported sources in this study include AM/FM radio, radio streams, music on YouTube with ads, SiriusXM talk channels, free versions of streaming audio sources, and podcasts.
Those who spend the most time with ad-supported sources tend to be older; 75% of Americans 55+ spend their audio time with ad-supported audio. Listeners aged 35-54 listening to ad-supported audio clocked in at 65%. Meanwhile, those aged 13-34 spend almost as much time listening to ad-free audio (46%) as they do ad-supported (54%).
This data makes sense, given that younger American spend more time on platforms that make removing advertisements relatively easy and fairly inexpensive, like Spotify and YouTube. Further, older Americans are more likely to have spent time listening to ad-supported audio before the advent of streaming, perhaps making it less of a deterrent to them than younger generations.
From the perspective of the providers, ad-supported audio remains an effective way to reach consumers and increase brand and product awareness. To that point, an increasing number of video streaming services are putting ads into their paid plans, such as Netflix.
That only begs whether audio streamers like Spotify will follow in their video counterparts’ footsteps. Rumors have circulated this week that recent advertising updates to Spotify would result in ads appearing in paid plans. Namely, rumors suggest the current $11.99 monthly Premium plan would see a limited amount of ads introduced, with the company introducing a higher-priced tier for continued ad-free listening.
Despite Spotify’s denial of any truth to those rumors, some users have reported encountering ads in their paid Premium subscriptions. Spotify says this is due to a technical issue.
But whether these are actually the earliest whisperings of an additional source of revenue for the streaming giant remains to be seen. The company has been under fire for years over its abysmal royalty payments to artists.
Perhaps more ads would provide a way for Spotify to cut artists on its platform a bigger check. However, that doesn’t mean its users are willing to pay the price.
Content shared from www.digitalmusicnews.com.