Audio industry shrinks despite streaming gains
Why it matters: Digital audio revenue has yet to make up for the rapid decline in traditional radio ad spend.
Of note: The television industry is facing a similar problem.
- While more viewership flows to streaming, TV networks are far from being able make up for their linear TV ad losses with digital streaming.
Driving the news: Some audio companies, including Big Tech firms and record labels, have scaled back in response to a slower ad market and the potential impacts of artificial intelligence.
- SiriusXM on Monday said it would eliminate 160 jobs — or roughly 3% of staff — less than a year after the firm laid announced it would lay off 475 staffers (roughly 8% of staff).
- Audacy, the publicly traded radio giant, earlier this month laid off 12 members of Pineapple Street Studios' podcast division, representing around 25% of Pineapple Street Studios' staff. The news came weeks after the company filed for Chapter 11 bankruptcy protection.
- Spotify cut 1,500 jobs in December — 17% of its workforce. Last year Spotify cut 6% of its staff — roughly 600 employees — and it cut 200 roles after consolidating its podcast division.
- Warner Music Group said it plans to lay off 600 people — about 10% of its workforce — last week.
- Universal Music Group plans to cut hundreds of jobs this quarter.
- Sony laid off members of its podcast division and canceled some shows last fall.
- Amazon's ebook company Audible laid off 100 people last month — roughly 5% of its staff, citing the need for efficiencies.
- Clubhouse last year laid off half of its employees.
Be smart: For some firms, the cutbacks or responsible growth is working.
- Spotify last week said it lost less money than it was anticipating in the final quarter of 2023, after turning a profit the previous quarter for the first time since 2022.
- Slate had its most profitable year in its 27-year history, in 2023, thanks in part to heavy investments in its podcast unit.
- Vox Media has grown its own podcast network, acquiring studios like Criminal Productions and hiring podcast personalities.
The big picture: Music catalog sales have continued to capture investor interest.
- Just this week, news outlets reported that Sony has agreed to pay more than $600 million to acquire half of Michael Jackson's catalog, which could make it the richest music catalog deal ever.