In 2022, the number of households paying for podcasts has grown strongly. But close to all paying households also pay for another audio service. This is concluded in Mediavision’s latest analysis of the Swedish audio market.
The market for paid podcasts shows strong growth in Q4 2022, as the number of paying households increased by a whopping 85 percent compared to the same period 2021. But pretty much all households that pay for podcasts (97 percent) also pay for audiobook and/or music services. This means that the paid market for podcasts basically add no households to the total paid audio market (i.e. music, audiobook and podcasts).
More and more media actors have also chosen to invest in podcasts, both production and/or publishing. The big overlap between the paid audio categories, where podcast households already pay for other audio services, could become a challenge for some podcast services.
– If households increasingly get access to podcasts as part of other subscriptions, the willingness to pay for pure podcast services is likely to decrease, comments Fredrik Liljeqvist, senior analyst at Mediavision. We have already seen how major actors such as Spotify, audiobook services and newspapers, have broadened their scope by including podcasts in their services. 2023 will give us an indication of how the market for paid podcasts will develop. There are indications that podcasts will increasingly be “bundled” with other media in the future. This may possibly be driven by a declining economy, where households also look over their media spending.
Sharing SVOD subscriptions is a widespread phenomenon. At the turn of the year, approximately 1.4 million SVOD accounts were used by people outside of the paying household. This has become a growing concern for streaming actors as it hampers growth. Several companies are now reviewing the possibilities of limiting sharing. Theoretically, those that share today could contribute to continued growth, if they were transformed to paying customers. If they would pay the same average price av everyone else, Mediavision estimates the value of today’s forgone revenues to approx SEK 900 million (excl. VAT) per year.
In Sweden, close to 1.4 million SVOD subscriptions were shared outside the paying household at the turn of the year. Almost half of everyone with a SVOD subscription shares at least one subscription with someone outside the household. If sharing was stopped, the SVOD market could potentially grow up to 16 percent compared to today. The number of subscriptions would then increase from today’s 7.3 million to 8.7 million. Based on average household spend on stand-alone streaming subscriptions, the lost revenue is estimated to a value of close to SEK 900 million per year (excluding VAT).
Netflix was the first actor to take actions on account sharing, but Disney is also reviewing its sharing policy. For the companies, the hope is that this will accelerate growth, especially in households that have already shown interest in the services. But Mediavision’s analysis also points to risks. A ban on sharing may mean that some paying households actually leave the service all together.
– Almost half of all SVOD households in Sweden share at least one subscription outside the household, which shows how widespread the phenomenon is, comments Marie Nilsson, CEO of Mediavision. Many have made a habit of this and if the households are “forced” to prioritize, the risk of services being opted out increases. However, it is likely that all actors will review password sharing, which will possibly lead to both increased customer movement and more customers for the SVOD services.