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Spotify says free service reaches more people than commercial radio but Radiocentre sceptical

Spotify says free service reaches more people than commercial radio but Radiocentre sceptical

October 23, 2017 / No Comments

Spotify has said that its ad-supported service commands a greater share of unique listeners compared to UK commercial radio stations, however industry trade body Radiocentre has said the numbers fail to illustrate the “bigger picture”.

The streaming giant asked TNS to question 2040 UK individuals aged 15 to 65 study around the reach and quality of its free service, and found evidence to suggest that it was able to reach audience segments who are not listening to commercial radio at all.

For example, where the UK’s largest commercial radio station Capital reaches 12% of listeners who don’t listen to music on Spotify, the streaming giant reaches 19% of people who don’t listen to Capital. The overlap between the audiences is just 10%.

The company said the research proves that in an increasingly fragmented audio environment Spotify reaches listeners other stations have difficulty attracting. With Spotify’s vice-president of sales for Europe saying that the data proves “beyond a shadow of a doubt” that the consumer listening landscape has shifted in the UK.

While the numbers have the potential to strengthen Spotify’s lure as a media buy for brands, Mark Barber, planning director at Radiocentre, contended that the “bigger picture” wasn’t being represented. He said that in his view RAJAR MIDAS was the “industry standard” for measuring listening to all forms of audio.

Pointing to a different set of metrics, he said the RAJAR figures, which claim live radio accounts for 70% of all time UK audience listening time, illustrated that radio remains “the dominant audio format by a long way for all demographics in terms of both reach and time spent listening”.

He continued, however: “The good news for advertisers is that streamed music services are helping to grow overall commercial audio listening by eating into time people previously spent with their personal music collection, therefore opening up audio opportunities previously inaccessible to advertising.”

Spotify’s study also found that Spotify Free and commercial radio listeners in the UK have a similar gender breakdown, but said Spotify Free skews a more millennial audience.

Globally, Spotify has 140 million active users including 60 million paying subscribers. The company has long been rumoured to by gearing up to go public, however with its net loss having doubled last year to roughly $568m on $3.1bn in revenue, pressure is mounting on the platform to float quickly.

The company has yet to comment on the speculation but reports have suggested that rather than a traditional IPO Spotify will opt for a direct listing on the New York stock exchange, which would give it a way to float without raising any new money or issuing new shares to public investors.

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