Audio Series presented a USD 21-25 Bn global TAM opportunity in 2023: Redseer report

Redseer Strategy Consultants has unveiled the latest trend reshaping the entertainment landscape: the meteoric rise of Audio Series. The report reveals that this entertainment medium is capturing audiences worldwide, promising a significant shift in digital consumption habits. Emerging from the digital evolution that saw the rise of audio streaming, podcasts, and audiobooks, Audio Series has become widely popular. This format, emerging almost two decades after audio streaming began in 2001, capitalizes serialized audio fiction’s growing appeal. In 2023, the total addressable opportunity for the global Audio Series market is estimated at USD 21-25 billion, with projections suggesting a doubling in value by 2027, marking a substantial opportunity in the digital consumption landscape, the report states.

Over the last 2 years, adoption of audio series accelerated across developed and emerging market, led by India and the US. Globally, the market is growing at a CAGR of ~640%, implying an over 40X growth between 2021 and 2023. Although it is relatively nascent as an entertainment format, Audio Series is garnering ~2X the engagement of music globally and is nearing that of Video Streaming which is currently the highest in the Media & Entertainment sector. With a growing degree of user maturity, engagement on Audio Series platforms is also seen to increase. 

Further, users in early adopting markets like India started out by spending 1.3 hours per day on the platforms and wound up dedicating as much as 1.5 hours per day just a year into their listening experience. Factors such as content quality, variety, and flexibility in listening times are making the format more accessible to users. While users have expressed satisfaction across multiple parameters including personalized recommendation tools, there is demand for better pricing and flexible payment options. 

Popularity as a format and key entry points for listenership

Audio series in India currently enjoy an NPS of 55% with 63% of the listeners identifying as Promoters and only 8% as detractors. Google Podcasts, Spotify, and Pocket FM report the highest sentiment score built on customer satisfaction and a positive experience with newer formats. The overall positive sentiment surrounding the top Audio Series platforms is expected to translate into an increase in word-of-mouth recommendations which are critical to driving user acquisition in the space. In terms of the key entry point for Audio Series listeners, Redseer’s Research documents that 38% of the users learnt of properties through YouTube ads, 37% through Social Media ads and about 17% through referrals and word-of-mouth recommendations. 

Expanding the paid user base beyond the current rate of 10-11% 

The Audio Series landscape currently has 10-11% of paid users in India in the year 2023, with micropayment packs fueling the growth of this demographic. Although this demographic is currently limited owing to the nascency of the format, paid user penetration is almost on par with that of its counterparts in OTT Video in India. Micropayment facilities bring in an element of affordability while allowing users to only pay for the content they consume instead of the library at large. However, users are also seen to demand payment options for longer durations as evidenced by subscriptions increasing from 5% at the beginning of platform usage to 13% by the end of the second year of platform usage. There is also significant scope for monetization through advertising given that subscription/content monetization models contribute to over 90% of the revenue generated by Audio Series. With a base of ~1.3 Bn addressable Audio Series users globally in 2023, there is a substantial total addressable opportunity of US$ 21-25 Bn in 2023. 

Managing the supply side of Audio Series 

The Total Addressable users for Audio series in India is expected to grow from 350 Mn users in 2023 to 540 Mn users by 2027. The democratization of the creator visibility and selection process strengthens the supply-side pipeline with ample incentive for creators to innovate and experiment with genres. Platforms also enjoy a unique business model wherein creators can access a large community of enthusiasts with minimal spending and multiple avenues for creator monetization including revenue-sharing and lump-sum payment. Economies of scale would prevail in the audio series with only an incremental cost increase owing to the dependence on the creator ecosystem for content production and procurement. Platforms’ revenues are expected to increase with the growth in time spent per user and the price of content. Redseer’s report projects that with wider adoption and increasing monetization per finished hour of Audio Series content, contribution margins can touch 75% by 2027.

Mukesh Kumar, Associate Partner at Redseer observes “The Digital Media & Entertainment space has been a site of significant evolution in terms of media formats that are resonating well with audiences in developed markets like the US and emerging markets like India – take for instance the recent popularity of Audio series and Short Form Videos. Key factors like compelling storytelling with immersive user experience on the go are seen to be the driving factors for its rapid adoption.”    

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