The rise of audiobooks and podcasting

From Deloitte Insights:

The next time you settle down with a good book, will you reach for a set of headphones instead of an eReader? Audiobook publishers are hoping so—and the market’s anticipated growth lends weight to their aspirations. In 2020, Deloitte predicts, the global audiobook market will grow by 25 percent to US$3.5 billion. And audiobooks aren’t the only audio format gaining in popularity. We also predict that the global podcasting market will increase by 30 percent to reach US$1.1 billion in 2020, surpassing the US$1 billion mark for the first time.

These numbers may not look like much next to radio’s US$42 billion and music’s (recorded and live) US$51 billion global annual revenues (figure 1). But in a world where overall media and entertainment growth stands at just 4 percent, 25 to 30 percent annual growth is impressive, even considering the low absolute base. The signal is clear: Audiobooks and podcasts are outgrowing their “niche” status to emerge as substantive markets in their own right.

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The anticipated growth in audiobooks and podcasts is part of a larger trend of better-than-you-might-think growth in audio overall. In the United States, for instance, recorded music revenues grew by 12 percent in 2018; vinyl record revenues went up by 8 percent, showing that even physical music media can still have consumer appeal. And although neither global radio revenues nor global concert ticket sales are increasing at the same rate, both are still growing a few percentage points faster than global TV and global (printed) book revenues, and 10 to 20 percentage points faster than global magazine and newspaper revenues (as the latter markets are contracting). Meanwhile, 2018 headphone sales reached US$20 billion in the United States alone, up 27 percent year over year. People use headphones for more than just podcasts or audiobooks, of course … but they do illustrate how important our hearing is.

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The United States’ audiobook market—predicted at US$1.5 billion in 2020, and growing at a seemingly sustainable 20 to 25 percent per year for the next few years—is the world’s largest. Coming in second is the Chinese audiobook market, expected to generate about US$1 billion in the same year, up from US$450 million in 2017. Outside these two well-studied markets, data is sparse and the markets themselves more nascent. Data gleaned from various sources suggests that annual audiobook revenues in the four Nordic countries are running at about US$100 million; the UK audiobook market was about US$85 million in 2018, with audiobook revenues for all of Europe (including the United Kingdom) grossing about US$500 million. Based on these figures, a global audiobook market of US$3.5 billion seems reasonable, with the United States and China making up about 75 percent of it.

The audiobook market isn’t just about dollars; it’s about listeners as well. According to a 2018 survey, 18 percent of American adults said that they listened to an audiobook in the last 12 months, up four percentage points since 2016. Assuming this growth rate has held steady, these figures imply that more than 73 million people listen to an audiobook at least once a year in the United States today. Likewise, data from China suggests that 22.8 percent of the population listened to at least one audiobook in 2017. Assuming similar growth, likely more than a quarter of the Chinese population, or another 350 million people, listens to audiobooks today. Globally, the number of current audiobook consumers almost certainly exceeds half a billion.

In the longer term, we expect double-digit growth in audiobooks to continue, even if it slows somewhat from 2020’s torrid 25 percent pace. US audiobook revenues, for instance, have grown at double digits almost every year since 2013, and even accelerated to nearly 40 percent in 2018. The spread of smart speakers is one likely driver, as are streaming-books-on-demand (SBOD) models that offer monthly subscriptions. Globally, too, growth is likely to accelerate as other countries and regions catch up to the levels seen in the United States, China, and the Nordics.

Audiobook consumption will likely differ across geographies and demographics. In 2019, for example, 74 percent of audiobook listeners in the United States listened to them in their cars. Countries where commute times are longer may thus see higher revenues, growth rates, and opportunities for audiobooks than countries with shorter commutes. Children’s audiobooks, too, which already represent a substantial fraction of the total number of audiobooks sold, may also be a growth hotspot: In 2017, this category made up 40 percent of the audiobook titles sold in China, 10 percent in the United States, and 25 percent in France.

Interestingly, while audiobooks are rapidly gaining share in both the book market and the overall media market … that share isn’t coming from print books. As an example, in the United States, revenues from sales of print books for consumers (trade books) in the first six months of 2019 rose by 2.5 percent year over year, even as revenues from downloaded audiobooks also increased by 34 percent. E-book revenues, however, went down by 4 percent in the same period (although e-books still made 77 percent more money than downloaded audiobooks). It appears that, while hardcore print lovers are clinging to the physical page—which is still the dominant form of consumption, accounting for 78 percent of all US trade book revenues overall—a war in the digital arena is underway between those who want to use their eyes versus those who prefer their ears. The outcome? No one knows for sure yet—but at current growth rates, audiobook revenues are on a trajectory to pass e-books by 2023 or so.

Link to the rest at Deloitte Insights (multiple footnotes and links in the OP omitted)