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Live and Recorded Music, Terrestrial and Streamed Radio, Podcasts and Audiobooks

The year 2021 proved that the listening behaviours adopted during the COVID-19 pandemic are cemented in Australian society. Despite some perceived uncertainty, consumers are continuing to habitually use online streaming platforms for music, radio, podcasts and audiobooks at high rates, supporting a year-on-year increase of total Listen revenue of 11.4 percent. The embrace of these technologies is not only supporting the recovery of Listen’s sectors, it has formed the foundation for significant future growth with total Listen revenue forecast to reach A$3.7 billion by 2026.


Australia’s Live and Recorded Music sector is gradually recovering from the impacts of the COVID-19 pandemic, buoyed by the Digital Music Streaming sub-sector, with a return to pre pandemic revenue levels expected in 2022. To thrive, the sector is embracing new, technology driven mediums to grow listenership, launch artists and discover emerging talent. In the face of an increasingly competitive market, broadcast radio continues to successfully transform itself to maintain listeners’ attention. 2021 was the year where what was traditionally referred to as ‘radio’ transitioned to ‘audio’, as digital streaming and podcasts drove revenue growth and listenership extension. Australia’s Podcast sector continues to grow significantly, driven by ongoing expansion to the listener base and diverse content library. In turn, podcast advertising is now one of the fastest growing channels in audio media, spurred by recent innovations in advertising technology. Audiobooks are also seeing strong growth as authors and publishers find new ways to engage their audiences, including choose-your-own-adventure stories and shared family listening experiences.

 

Total Listen Revenue (A$ millions)

Share of Total Listener Revenue by Segment

Live and Recorded Music

Digital streaming is fuelling the recovery of Australia’s Live and Recorded Music sector, with total revenue expected to return to pre-pandemic levels in 2022. New technologies are driving the growth of listenership, and better enabling market players to launch, promote and discover talent.

Total Music Market (A$ millions)

The Live and Recorded Music sector was valued at A$1.41 billion in 2021, an annual increase of 13.8 percent, and is forecast to recover to pre pandemic levels by 2023 driven by the continued expansion of the Digital Music Streaming sub sector as well as the return of live music. As the Streaming sub-sector continues to grow, total revenue is expected to rise to A$2.37 billion by 2026 at a 11 percent CAGR, based on the mid point forecast. The continued growth of the Music sector within the forecast period contradicts the concern that post-pandemic economic downturns may significantly impact consumers’ willingness to pay for music services and that, though the return may be slightly slower than other in-person segments, consumers will also return to live concerts at pre-pandemic levels.

On-demand streaming continues to support the Music sector, comprising 70.2 percent of Music sector revenue, up significantly from 30.4 percent prior to the pandemic in 2018. Spotify, YouTube Music and Apple Music continue to dominate the streaming space, supporting an 8.1 percent year-on-year growth in the Digital Music Streaming sub-sector in 2021. However this rate was slower compared to previous years and is not expected to exceed the significant 59.5 percent year on-year growth experienced in 2019 within the forecast period. This is likely due to maturation of the three services, coupled with a growing quantity of other digital entertainment and media services and products for consumers to purchase.

Total Music Revenue Share by Sub-Sector 2018 (%)

Total Music Revenue Share by Sub-Sector 2021 (%)

Though the live music sub-sector is not expected to fully recover until 2024, it experienced the fastest consumer sub-sector growth in 2021 as restrictions lifted

While the Live Music sub-sector is not expected to return to pre-pandemic levels until 2024, Australia’s live music revenue grew by a significant 97.4 percent year-on-year, and is expected to grow by a 30.8 percent CAGR from 2021-2026 based on the mid-point forecast. This makes Australia one of the fastest growing live music sub-sectors in the world, second only to Saudi Arabia. The return of live music in Australia was bolstered by the national COVID-19 vaccine rollout as well as sector support through government grants and initiatives. The Victorian Music Works grant was designed to fund music creation and recording and to host live virtual music events across 2021. Similarly, New South Wales’ Play the City and Great Southern Nights encouraged people to attend live performances and support local artists.

Total Music Revenue by Segment (A$ millions) midpoint forecast

Throw out the playbook: music consumption  habits have been permanently transformed by emerging technologies

Social media platform TikTok further established itself as an essential partner in Australia’s Music segment. Sydney based Masked Wolf’s Astronaut in the Ocean rocketed to the top five of the Billboard Global 200 and number one on TikTok, boosted by TikTok users pairing his song to videos showcasing welding, driving and stunts.43 STAY by Indigenous rapper The Kid Laroi and Justin Bieber became Australia’s longest-running number-one single of 2021 and reached number one on the Billboard Global 200 chart, attributed in part to its virality on TikTok where the song has been used in nearly nine million videos, driven by a popular dance challenge.44 In 2021, TikTok was the most downloaded mobile entertainment app in Australia.45 Australian users spent 39 percent more time on the platform and the annual number of users increased 43 percent compared to the previous year, far outpacing the total rate of social media uptake in Australia (4.6 percent).46 For major record companies, TikTok is seen as having a powerful proposition: launch, promote and discover talent all within a single platform.

The Australian Music sector is also further exploring the profitability of music synchronisation licensing through the video gaming sector. Australians are not only replaying their favourite songs whilst gaming but also discovering new music, which is translating into new revenue for artists. Based on PwC reporting, German sound designer and composer for Minecraft has earned a total of A$3.4 million for his album Minecraft - Volume Alpha in Spotify artist revenue alone, since its 2011 release.

Australia’s live and recorded music sector may be confronted with a new set of challenges as ESG concerns gain increasing attention 

While the segment continues to grow, it also faces increasing scrutiny by internal and external stakeholders regarding how it addresses ESG considerations. Global industry leaders Sony Music, Warner Music and Universal Music each signed the Music Climate Pact in December 2021 as founding Signatories, committing to Science Based Targets aligned with the goals of the Paris Agreement. This commitment to net zero targets by 2050 signals pressure building on music corporations to formally report on, and reduce, their carbon emissions as consumers and artists look to hold companies accountable. Beyond environmental impact, the first national Music Industry Review is scheduled for publication in August 2022. The review will highlight the prevalence of sexual harm, sexual harassment and systemic discrimination within the Australian music sector with recommendations to influence reform. Notably, TikTok Australia, Spotify Australia, Sony, Universal and Warner Music have all provided funding for the independent review, suggesting that sector leaders are investing in the future diversity, inclusivity and safety of the music workforce.
 

Terrestrial & Streaming Radio

In order to remain competitive for consumer time and attention, radio operators are turning to digital streaming as part of their long-term digitisation strategies.

The Terrestrial and Streaming Radio sector is slowly recovering from the impacts of the pandemic, reaching a total revenue of A$1.02bn in 2021, and is forecast to return to pre pandemic revenue levels in 2024 under the mid-point forecast. Digital audio listenership, which includes live AM, FM and DAB+ radio and catch up radio programmes listened to via online streaming platforms, reached record highs in 2021. According to the sixth annual Infinite Dial Australia study, published by Edison Research, the number of Australians listening to online audio each week grew by 8 percent, reaching a total of 71 percent of the population.47 The average time spent listening to online radio audio also increased to 13 hours and 31 minutes per week, up from 12 hours and 11 minutes last year. In response, radio operators are increasingly turning to live and on-demand streaming services as part of their long-term digitisation strategies, which already appears to be paying off.48 SCA’s LiSTNR network hit a record high of 10.9 millions active streams in May 2021, up 20 percent on the same month in 2020, and Nine was also reported to have reached a record high of 11.2 million streams in July 2021. Radio stations’ websites and apps were the most popular platforms listeners used. The digital transformation of radio broadcasting is expected to continue to drive listenership and grow radio networks’ revenue by enabling more targeted and personalised content.

The growth in online listenership, is expected to be one of the key drivers of advertising revenue growth in the sector as networks seek to monetise these digital placements with the addition of first party data and via increasingly sophisticated programmatic trading capabilities. Though low in absolute terms, revenue from digital streaming of radio network broadcasts is expected to grow rapidly in the forecast period propelling the Radio sector to reach A$1.22bn by 2026 at a 3.7 percent CAGR, based on the midpoint forecast.

Growth in regional Australia attracts regional broadcast acquisitions from metro networks

2021 recorded the highest level of growth and migration of people from metropolitan to regional centres with eight out of ten of the fastest-growing centres located in regional Australia.49 The sector capitalised on this growth with key players acquiring regional broadcasters. Most notably, Here, There & Everywhere (HT&E) acquired Grant Broadcasters and Seven West Media acquired Prime. The acquisitions will contribute to the forecast sector revenue and listenership growth as both will be able to use their scale to grow audiences and offer a simpler solution for advertisers to reach listeners.

Total Terrestrial and Streaming Radio Market (A$ millions)

Indicative Radio Digital streaming advertising revenue forecast 2021-2026

The line between radio and podcasts is becoming increasingly blurry as radio continues to evolve its digital offerings and podcasts make their way to linear radio

Radio operators are leveraging the power of podcasts to drive listenership and increase reach across both linear radio and online streaming channels. One of the primary methods being adopted is the conversion of live radio talk shows into catch-up podcasts for online streaming services. With many of the most popular radio talk shows consistently available on Spotify or Apple Podcasts, such as The Kyle and Jackie O Show and Hamish and Andy, third party streaming services may be viewed as valuable mechanisms to facilitate organic growth via playlist features and recommendation algorithms. Another approach being used by major industry players is the acquisition of podcast assets for linear broadcasting and online streaming. For example, in December 2021 SCA acquired kids radio and podcast company Kinderling to add to its LiSTNR inventory. There is also evidence of podcast shows moving to linear radio, such as ARN’s Life Uncut podcast-turned-radio show. In addition to content creation, radio operators are also looking at podcasting technologies to boost their existing offerings. Most notably, in February 2021 iHeartRadio acquired Triton Digital for US$230 million for its advertising infrastructure and measurement solutions.

This multidimensional approach to broadcaster podcasting is seemingly driving listenership across the country as radio talk shows have quickly become some of Australia’s most popular podcasts. According to Triton Digital’s annual report, the top five most popular podcasts in Australia in 2021 included ARN’s Stuff You Should Know (ranked second), The Kyle and Jackie O Show (ranked fourth) and Life Uncut (ranked fifth) and SCA’s Hamish & Andy podcast (ranked third). The success of radio-owned podcasts suggests that podcast offerings will remain a key pillar of radio’s long-term digitisation strategy.

Podcasts & Audiobooks

Total Podcast Advertising Revenue (A$ millions)

Monthly podcast listeners in Australia

Podcasts have cemented their place within Australia’s media landscape, and are beginning to show signs of evolution amidst market maturity

Despite some perceived uncertainty surrounding podcasts’ long term potential for growth post the peak of the pandemic, the Australian Podcast sector continues to experience significant growth. This growth trend is expected to continue, with monthly listenership set to rise by 5.5 percent CAGR to 11.5 million listeners by 2026 based on PwC mid-point forecasting. The comedy genre overtook true crime and news to become the most popular genre of 2021, signalling an increasing demand for light hearted content likely fueled by consumers’ exhaustion with turbulent health and political news.

YouTube, Spotify and Apple continue to be the most popular podcast platforms in Australia by listenership. The Australian Broadcasting Corporation’s ABC Listen app service retains its role as the most-used local source and continues to grow its portfolio, while SCA and Nova Entertainment launched their own podcast services, LiSTNR and the Nova Entertainment Podcast Network, in 2021.50 Monthly podcast listening has increased a staggering 48 percent since 2020, with nearly nine million Australians (37 percent of the population) listening to a podcast on a monthly basis, driven by a continually growing user base and library of diverse content.51 As podcasts reach new heights in both reach and listenership volumes, creators are seeking ways to differentiate themselves through innovations that disrupt the medium’s existing conventions. One of the more popular shifts is towards podcasting with companion videos and other multi-media content to support deeper audience engagement.

Podcast advertising is one of the fastest growing channels in audio media, and investments in advertising technology have the power to supercharge the sector

Podcast advertising has experienced rapid year-on-year growth, albeit from a low base, in recent years increasing 135.6 percent since 2018. In 2021, podcast advertising revenue was the second fastest growing revenue channel in audio media, excluding channels recovering from pandemic impacts, with a growth of 24.4 percent (following streaming advertising revenue at 31 percent). PwC data forecasts that the rate of podcasting revenue growth will overtake the United States before 2023 and will continue to lead through the forecast period based on the mid-point scenario.

According to research by Acast, podcast consumers are found to be highly receptive to advertisements played within the podcast environment, and 88 percent of listeners actively reduce their distractions before listening to a podcast.52 Podcast listening habits can also offer much deeper insight into consumer behaviour compared to other audio types due to the often detailed nature of the content (e.g. a podcast about saving money as a millennial) increasing targeting opportunities for advertisers. Podcasts’ ability to command a high level of consumer attention, in conjunction with the market’s audience growth positioning, offers a desirable opportunity for Australian advertisers, however many have struggled to find a viable monetisation strategy. Digital ad delivery functionality, namely dynamic ad insertion, has improved podcast advertising’s digital enablement, offering improved flexibility, targetability and value for advertisers. Should the sector increasingly adopt automated solutions it would help creators better commercialise their content and improve scalability for ad buyers.

Podcast Advertising Revenue 2021-2026 CAGR by Country (%)

Audiobooks will continue to see growth off the back of new ways for authors to engage audiences

After a pandemic dip, audiobook consumption has achieved record sector peaks through evolving listening behaviours and new technologies. According to Grand View Research, global revenue in the sector grew to A$4.22 million in 2021 and is forecast to grow at a CAGR of 26.4 percent from 2022 to 2030.53

Consumers are gravitating towards audiobooks for a more personal experience that is capable of bringing genres alive. Renowned authors and celebrities, such as Eric Bana, Will Smith and Mel Brooks, are capitalising on the opportunity for increased audience intimacy to satisfy and grow their fanbases. The true crime genre has also benefited from this closeness, drawing in listeners through immediacy, excitement and choose-your-own-adventure interactive formats of narrative delivery.

Audiobooks also uniquely appeal to families. Shared listening has become an increasingly popular consumption behaviour, enabling parents to entertain their children during car rides and replace traditional “screen-time” with narrated literary classics, such as Matilda, Charlotte’s Web and Charlie and the Chocolate Factory.

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Bhushan Sethi

Bhushan Sethi

Joint Global Leader, People & Organisation, Principal, PwC United States

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Peter Brown

Peter Brown

Joint Global People & Organisation Leader, PwC United Kingdom

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Carol Stubbings

Carol Stubbings

Global Tax and Legal Services Leader, PwC United Kingdom

Chaitali Mukherjee

Chaitali Mukherjee

Partner, HR transformation, PwC India

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Laurence Dell

Partner, PwC Australia

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Dan Robins

Director, CMO Advisory, PwC Australia

Tel: +61 439 531 447

Samantha Johnson

Partner, PwC Australia

Tel: 61 2 8266 7458

Jeremy Thorpe

PwC Chief Economist, PwC Australia

Tel: +61 416 245 535

Contact us

Laurence Dell

Partner, PwC Australia

Tel: +61 386 032 151

Dan Robins

Director, CMO Advisory, PwC Australia

Tel: +61 439 531 447

Samantha Johnson

Partner, PwC Australia

Tel: 61 2 8266 7458

Jeremy Thorpe

PwC Chief Economist, PwC Australia

Tel: +61 416 245 535

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