How Big Should Podcasting Be?

A Share of Ear® Analysis

CC BY-SA 3.0,

According to the IAB, Podcasting captured $314 million in revenue in 2017. The 2018 numbers aren’t available yet, but the IAB estimate is that advertising revenues will grow to $659 million by 2020.

I’m not much on forecasting, myself. I couldn’t tell you what podcast revenues will be in 2020, or 2019 for that matter. But here’s what I can tell you: it’s not enough. At least, it’s not pulling its fair share of revenue as a percentage of its Share of Ear. In 2017, the U.S. Radio advertising market (that is, the revenue for ‘broadcast radio’ and their attendant streams) was about 17 billion dollars (and I rounded down.) That means Podcasting’s revenues are about 2% of the revenues that Radio is pulling in, which would suggest that Radio’s share of your earballs exceeds Podcasting’s by 50:1.

Except, it doesn’t.

Thanks to five years of Edison’s Share of Ear research, we know exactly how much time Americans spend with podcasts as a percentage of the time they spend with audio in general. Share of Ear is the only single source measure of all audio, online and offline, in the U.S. The study uses a large sample to provide a quarterly look at exactly how much time we spend with various types of audio content, platforms, devices, and locations of listening.

When we issued our first public Share of Ear overview in 2014, we showed Podcasting at 1.7% of all listening. Now, that might seem small (AM/FM Radio, for instance, exceeded 50%) but that’s still tens of millions of hours and a stat that reflected the fact that the vast majority of Americans were not regularly consuming podcasts, which averaged a lot of zeros into that estimate.

Today, however podcasting is approximately 4% of our total audio consumption, while AM/FM Radio is now 45%. That five-year shift has moved the ratio of podcasting from 1/25 of Radio to about 1/11 of Radio. Not too shabby. By that measure, Podcasting should be pulling in well over a billion to Radio’s $17 Billion. Clearly, there’s some work to be done here! But this is not the end of the story.

I was taken aback a couple of weeks ago when I heard from one of the leading podcast ad sales companies that our data had been used to lower a buy from its previous levels. Apparently, someone had seen a Share of Ear graph from a year ago that showed Podcasting at 3% of all audio and used that to cut an order in half from where it had been a year ago. It was that exchange that prompted this article. That’s not how to interpret these graphs, dear reader, so let us take a closer look at the most recent picture of the total Share of Ear.

First of all, as I mentioned, Podcasting is now 4% of the total audio pie. That’s a third of the time we spend listening to our “owned music” — CDs, MP3s, 8-tracks, etc. But you know what you can’t do with “owned music?” Sell advertising over them. When you pop that Harry Styles vinyl on your turntable, Casper Mattress can’t stick an ad between the tracks.

You also won’t hear Geico spots on the 100+ music channels on SiriusXM, because subscribers pay for that service to be commercial free. And, similarly, you won’t hear screaming car commercials in your audiobooks. Satellite, owned music, audiobooks, TV Music channels and a few other miscellaneous categories of audio are what we call non-addressable. You can’t buy or sell ads over them. When I am listening to my Yacht Rock station on SiriusXM, I am unreachable, friends. Just me, the albatross, and the whale (who are my brothers.)

Here’s what all of this means: if we take out all of those non-addressable audio platforms, remove the 11% of our total audio consumption that is basically listening to music videos on YouTube (because they don’t sell audio ads), and the listening to the premium, ad-free versions of Pandora/Spotify/etc., we are left with AM/FM Radio, ad-supported Streaming Audio, and Podcasting. That’s 64% of our total audio consumption.

Podcasting might be 4% of that total audio consumption, but it’s 6% of our addressable audio consumption. If we take the total addressable audio market at a very conservative $20 billion in 2018, that means Podcasting “should” already be pulling in $1.2 billion of that. Podcasting is still growing, of course, and with any new ad-supported medium the dollars lag behind the actual listening. But I think it’s going to catch up, and soon.

Last week I wrote about Spotify’s purchase of Anchor and Gimlet, and some of the ramifications of that transaction for content providers. As the terms of that deal have become public, I’ve seen some of the pundits in the various podcasting groups to which I belong posit that they drastically overpaid.

Given what I’ve just laid out here, isn’t it just the teensiest bit possible that they bought low?