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Monday, March 25, 2019

Forecast: Spotify To Surpass Pandora Sooner Than Expected

Pandora may be the most popular music streaming service in the US, but it won’t retain the No. 1 spot for much longer. According to the latest forecast from eMarketer on digital music listeners, Spotify will surpass Pandora in terms of users by 2021—one year sooner than predicted last year.

This year, Pandora will have 72.4 million US listeners, down 0.5% over 2018. Pandora has been the dominant music streaming platform in the US since its launch in 2000. Until recently, competitors were nowhere near it. Back in 2012, Pandora had 67.0 million users, compared with Spotify’s 5.0 million. But Pandora has been losing users in recent years. In fact, by 2023, it will have lost more than 9% of its users since its peak in 2014. As a result of declining usage, we have downgraded our forecast for Pandora.


“Pandora lost users last year because of tough competition from other services attracting people to switch,” said eMarketer forecasting analyst Chris Bendtsen. “Apple Music has been successful in converting its iPhone user base, Amazon Music has grown with smart speaker adoption, and Spotify’s partnerships have expanded its presence across all devices.”

In 2019, Spotify will have 65.3 million users, up nearly 14% year over year. By 2021, it will have 73.7 million, surpassing Pandora’s 72.2 million. Smart speakers and mobile devices have been big growth drivers for Spotify.

“Spotify’s initial growth was driven by its unique combination of music discovery, playlists and on-demand features,” Bendtsen said. “But now that all music streaming services have the same features, Spotify’s future success will rely on partnerships with other companies.”

Meanwhile, Apple and Amazon have about half the number of users of Pandora and Spotify. Amazon Music this year will have 35.8 million listeners, up nearly 18%, making it the fastest-growing music service. Much of its growth can be attributed to the increasing popularity of its Echo smart speakers.

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