Amazon Music to Surpass Pandora in Monthly Listeners by 2023

Amazon Music will increase its monthly listenership by 18.5% this year to 45.8 million, which represents 21.3% of digital audio listeners, according to our latest estimates. We expect that as it continues to invest in and grow its audio strategy, Amazon Music will surpass Pandora in monthly listeners by 2023.

We estimate there will be 45.8 million Amazon Music listeners this year. That’s an increase of 2.5 million listeners from our previous forecast.

“Amazon will be the second-fastest-growing digital audio company we track, right after Spotify,” said Peter Vahle, eMarketer forecasting analyst at Insider Intelligence. “As a percentage of digital audio listeners, Amazon will account for 21.3% this year.”

Over the past few years, Amazon has been ramping up its audio strategy by offering a variety of streaming tiers, ranging from Amazon Music Free, which lets listeners browse thousands of stations, to Amazon Music Unlimited, where subscribers can listen to more than 60 million songs ad-free.

What’s more, Amazon announced that it would reduce the price of its Audible service and begin producing exclusive podcasts.

The company’s smart speakers are also helping to boost listenership, especially as more people continue to spend more time at home with these devices. Conveniently, Amazon Music is the default streaming service on Amazon’s smart speakers.

“Over the past couple years, Amazon has quickly become one of the major players in digital audio,” Vahle said. “By offering a wide range of free and paid streaming services, Amazon is hoping that more options will lead to more regular listeners across the board.”

Meanwhile, Pandora is losing listeners as platforms like Amazon and Spotify—which have been quick to improve their offerings—continue to attract listeners to their paid and ad-supported platforms.

We’ve revised our estimates for Pandora listeners after the service reported that monthly listenership declined for yet another quarter in Q2. Our latest forecast adjusts the number of Pandora listeners down by 2.6 million this year, to 58.2 million by the end of 2020. To put it into perspective, that’s a decline of roughly five million listeners from 2019 to 2020.

Pandora has launched multiple tiers of paid subscriptions after seeing that consumers were willing to shell out money for an ad-free experience. But subscriptions are a small part of its business, as most of its revenues come from advertising.

“Back in 2018, Pandora had more listeners than any other digital audio service,” Vahle said. “But that changed in 2019, as on-demand listening grew in popularity and Pandora lost listeners to competitors with robust subscription offerings. Today, a hybrid revenue strategy that draws on both subscription and ad revenues is table stakes for on-demand streaming services. Differentiation through content and user experience will be the benchmarks for future success.”