Audience is the number of people or particular group of people who watch, read or listen to the same thing. This could be the group of people who have gathered to watch or listen to something such as a play, a concert, somebody speaking, etc. For books, audience refers to people who read that book.
In literature, audience refers to the person for whom a writer writes, or a composer composes. We modify what we say and how we say it depending on who our audience is. Our content, tone and language changes according to what we know about our audience. In writing, audience is whom you are writing for.
In few words, audience refers to the spectators, listeners and intended readers of a writing, performance or speech.