Consumption of streaming audio programming (via services like Spotify, Pandora, Deezer, and Tidal) rose 82.6% in 2016, while songs and album downloads dropped 15-24%. There's no doubt that streaming is popular and here to stay. With Apple, Amazon and Google all entering the market, streaming audio is rapidly displacing real-time radio.
Meanwhile, other digital streaming services (Netflix, Hulu, Amazon Prime etc.) are displacing broadcast and cable, making it harder for advertisers to reach audiences still using traditional (non-digital) TVs.
What questions does the rise of these trends raise about advertising?
- Will segmentation and targeting of preferred audience segments become even more critical for advertisers?
- Programmatic inventory is likely to become more available but if so will it be accessible via open or private exchanges?
- Will the streaming channels opt for forcing advertisers to buy inventory from them directly?
- If revenue from subscriptions to these services continues to rise, will the attractiveness of advertising be diminished at all?
It remains to be seen but the potential threat subscription-models pose to advertising-models has likely never been more pronounced.