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It Was A Very Good Year For Internet Radio

2010 New Year Dawn

Image by Big Jobs via Flickr

2010 was a very good year for Internet radio. As the year draws to a close I thought it would be worthwhile to review my posts for the past year and highlight some of the things that made it so.

January – There’s always a lot of talk about CES in January and this year a lot of the buzz was about Internet radio. Sony, Ford, Pioneer and other manufacturers were eager to talk about the ways they are integrating streaming radio capabilities into everything from tabletop radios to cars, and Pandora was in the thick of these announcements. Pandora Founder Tim Westergren told WSJ.com “Maybe a year ago people would have said Pandora is a computer thing, Now, “they’re beginning to realize that Internet radio is an anytime, anywhere thing.”

February – In February Bridge Ratings released a new study that pegged listening to Internet radio at 60 million weekly listeners in the US. The study cautioned broadcasters to do more than simply stream a simulcast of their over the air programming though, or risk losing listeners to online stations that are providing interesting interactive channels with fewer commercials.

March – In March Pandora announced that based on their calculations of the royalties they paid against all performance royalties paid to SoundExchange, they could claim 44% of all US listening to Internet radio as theirs.

April – Apple began selling iPads and Pandora, AccuRadio and CBSRadio were first to release new apps designed to grow their mobile audience.

May – The Radio Advertising Bureau released new revenue data reporting that digital revenues grew 18% in first quarter of 2010, after growing 13% overall in 2009. RAB President and CEO Jeff Haley remarked “Radio’s digital platforms are experiencing the greatest growth and are reflective of the dollar shift from media to marketing by many of today’s advertisers.” Later the same month, BIA/Kelsey predicted that digital revenues will grow to 30% of radio’s number by 2015 and hit $46.5 billion.

JuneWith the wild popularity of World Cup Soccer came a new streaming audio record set by ESPNRadio. ESPNRadio’s streaming coverage of the US match against Algeria brought them their biggest audience ever – the broadcast peaked at 180,000 listeners, according to AndoMedia and was nearly double their previous record, set on June 18th during the US versus Slovenia match.

Stay tuned for the second half of the year recap later this week..

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Bridge Ratings Releases Data On Who Prefers Internet Radio

Bridge Ratings, one of the few companies that actively and regularly studies listening patterns to Internet radio in the US, has released a new study that examines the effect that lifestyles have on listening patterns. Using Nielsen’s PRIZM groupings which categorize U.S. consumers into distinct lifestyle groups, the new Bridge Ratings data looks at each lifestyle’s proclivity to use broadcast radio, Internet radio, MP3 Players, Satellite Radio, Podcasting, Smartphones and Social Networks.

Three groups of consumers are more inclined to listen to Internet radio than broadcast radio. Not surprisingly, they’re younger groups of people who have higher incomes, more education, and tend to live in or near urban areas.

  • Bohemian Mix: A collection of young, mobile urbanites, Bohemian Mix represents the nation’s most liberal lifestyles. Its residents are a progressive mix of young singles and couples, students and professionals, Hispanics, Asians, African-Americans and whites.
  • Young Influentials: Once known as the home of the nation’s yuppies, Young Influentials reflects the fading glow of acquisitive yuppiedom. Today, the segment is a common address for young, middle-class singles and couples who are more preoccupied with balancing work and leisure pursuits.
  • Young Digerati: Young Digerati are the nation’s tech-savvy singles and couples living in fashionable neighborhoods on the urban fringe. Affluent, highly educated and ethnically mixed, Young Digerati communities are typically filled with trendy apartments and condos, fitness clubs and clothing boutiques, casual restaurants and all types of bars-from juice to coffee to microbrew.

According to Dave Van Dyke, CEO of Bridge Ratings, “Internet radio’s broad national acceptance is fueled by the lifestyles clusters where it excels. However, across all current defined lifestyle clusters, Internet radio over-indexes in 20 clusters.”

This is an insightful study that provides Internet radio with forceful data for encouraging advertisers to invest. Sellers should target advertisers who clearly define their consumers to include these groups.

Stations Can Grow Audience With Social Media Strategy

Bridge Ratings has some new study results out that focus on the successful use of social media marketing by radio stations and other businesses. It finds that effective social media marketing executed on properly selected social network sites can have jaw dropping results.

The study outlines a Social Media Network Hierarchy strategy based on social media behaviors within various demographics. For example, girls 12-17 use different social media sites than other age groups. Once the correct social media behaviors and sites are identified, and “If messaging is done properly (short in length, keyed on strategic products or services with targeted creative) and with precision, response rates can accelerate. Repetition plays a factor as well.”

Basically the study says that social media marketing can be extremely effective, provided that the target demographic’s online social behavior is well understood, product messaging is “laser-focused”, repetition is limited, and campaigns are well executed.

Several examples document the strategy, such as  a CHR station that used frequent messaging on social network sites to promote contests, on-air features and client promotions and saw a 25% increase in response. A record company that increased digital downloads by 34%. A broadcaster that grew listening sessions by 75% in 4 weeks, and an Internet radio station that grew sessions by 20% over 6 weeks.

You can read the study summary here.

Report: Radio’s Tower Power Is Eroding

New data from Bridge Ratings takes a look at the new recipe for success for AM/FM stations and finds that it will take more than a tower to build an audience.

The study finds that terrestrial radio programming nets about 19 hours of listening. Current listening patterns show that 94% of that listening is still on the AM/FM dial and 6% is over the Internet.

Bridge Ratings AQH Pyramid 2012

By 2012, that listening will shift further, with tower based listening eroding to 90%, while Internet based listening shifts to 8% and mobile listening takes a position at 2% of the total time spent listening.

It’s critical that broadcasters understand these new device/technology preferences and accelerate content distribution over those platforms. Broadcasters should extend their streaming platform and develop side channels with alternative content that extends their brands. Data shows these channels can contribute to the long term growth of a station’s audience.

In addition, broadcasters should offer their primary content on mobile platforms as well as expanding to offer customizable content that is shorter in length and more interactive – to appeal to the mobile listener. These moves will position broadcasters to grow their audience in the face of eroding AM/FM based listening. I couldn’t agree more…

Bridge Ratings Sees Internet Radio Revenue Accelerating

Internet radio revenues will accelerate faster than terrestrial revenues, according to new data presented by Bridge Ratings President Dave Van Dyke at RAIN Summit West last week in Las Vegas. According to his report, revenues will increase a modest 12% this year, from $288 million in 2009 to $324 million this year, then jump 240% over the next five years to more than $800 million in 2015. By 2020, Internet radio revenues will top $1.6 billion.

“The data points for the revenue projects came from interviews conducted earlier this year with buyers, sellers and clients,” says Van Dyke. “We discussed their interest in the internet radio space, their budgets for the past two years and what their intended spending would be going forward for the next 2-3 years.  From there we extrapolated growth based on these interviews with people who have their fingers on the pulse of the business.”

The revenue projections are based only on streaming ads, pre-roll and banner advertising in the player, and does not include ads on the website or other monies derived from a station’s digital platform.

Don’t Miss Internet Radio’s Main Event

Have you made your plans to attend this year’s RAIN Summit West in Las Vegas on Monday April 12th? It’s a great day full of Internet radio shop talk that you won’t want to miss.

Plus, readers of my blog can now register at a 30% discount!

In the past few weeks, RAIN has announced an excellent agenda that includes pioneers in the industry as well as upstarts and new thinkers. NPR’s Digital Chief Kinsey Wilson will deliver a keynote and Chicago radio legend turned podcaster Steve Dahl will join a panel discussion on digital audio distribution channels for broadcasters to explore.

The list of speakers is a who’s who list of forward thinking broadcasters and webcasters. Two noted research gurus – David Van Dyke of Bridge Ratings and Jeff Vidler of Vision Critical – will deliver valuable research on Internet radio’s growing audience. I saw some of Vidler’s stuff at RAIN Summit North in Toronto a couple of weeks ago, and it’s useful and insightful stuff.

As if all of that isn’t enough, attendees receive lunch as well as the end of the day cocktail party as part of their registration. When you register, use the discount code Audio4cast to save 30% off the broadcaster/webcaster rate.

Years ago, I attended one of the first RAIN events and met a few people…and soon I was hooked on Internet radio! I look forward to attending and reconnecting every year with my friends in the business and meeting new folks. It’s still a small biz, and it’s easy to network and learn. So join us. See you there!

The Truth About Pandora and New Music Discovery

According to some recent research by Bridge Ratings, listeners expect Internet radio stations to be more adventurous and provide them with more opportunities to discover new music. Independent band Barefoot Truth would attest to that. The band has been around loosely since 2003, but recently submitted a cd to Pandora. That’s when it started to get exciting.

According to a recent article in USA Today, the band’s songs started showing up on stations created for fans of Bob DylanJack Johnson and Dave Matthews. “All of a sudden, people we had never met before were buying our music online and asking us to play in their cities,” band guitarist Jay Driscoll says. “Then we started seeing strangers singing the words to the songs at our shows.”

Now their songs have seen over 4.5 million spins on Pandora – according to Sonicbids, an online booking platform for indie bands. That’s a lot – according to music trade publication mi2n, “the 4.5 million figure is notable for a band at this level (by comparison, ‘Where Are You Going’ by Dave Matthews Band has notched 10 million spins,) and Barefoot Truth happily credits ‘The Pandora Effect’ for its crucial role in generating their growing army of listeners.”

Not bad for a band from Mystic, Connecticut (also world headquarters to Audio4cast). It’s a great story about the way Internet radio can open up opportunities for bands to get heard and listeners to hear new bands. It doesn’t hurt that BFT’s music is infectious and Pandora’s audience is growing exponentially. May they thrive…

Bridge Ratings: 60 Million Listening to Internet Radio in the US

Bridge Ratings has released a new study on Internet radio listeners that provides some insight into the differences between listeners to AM/FM stations’ streams and pure-play, or Internet-only stations. Over 60 million Americans are listening to Internet radio weekly, with 84% spending at least five minutes listening to AM/FM streams and 62% to Internet based stations. AM/FM streams see a higher tsl as well, averaging about 2.5 hours per day versus 1.4 hours per day for Internet only stations.

But expect that to change. According to this report, AM/FM streams are at risk of losing audience because of their approach to streaming, which is generally simply a redistribution of their over the air content. Internet radio listeners think Internet only stations are more adventurous and provide more options for music discovery. Dave Van Dyke, President of Bridge Ratings, recommends that AM/FM stations develop alternative channels for their streams to offset future audience attrition.

When it comes to who is listening on mobile devices, Internet only listeners listen 18% of the time while AM/FM listeners spend only 8%. This of course, is a factor in the lower time spent listening number that Internet only stations have, as mobile listening sessions are going to be shorter than in-office or other more static listening.

There are some good takeaways in this research for AM/FM online stations that wish to optimize their audience growth. Broadcasters must stop viewing their streaming platform as a replay of their AM/FM programming and create new, exciting, alternative programming for their listeners. As I said in my list of ways to build a better digital presence, station managers must shift their thinking away from the idea that the on-air product is the most important element of their business, and recognize that the content is what matters.

Bridge Ratings: Internet Radio’s Still Growing

Bridge Ratings has released some updated research that pegs Internet radio’s US penetration at 30.2% on a monthly basis, up from 18.1% in 2008. That number is projected by this study to grow to 52.2% by 2012.

In a second newly released report, consumers of HD radio, MP3 Players and Satellite radio showed decreases in the category of “Intent to Listen More”, while Internet radio saw the greatest increase in “Intent to Listen”. But that listening is not coming at the expense of AM/FM listening according to the study, which shows that 5% more people are stating that they intend to listen to AM/FM stations than two years ago.

Internet radio also scored high marks with panelists who were asked to indicate a preference for a primary daily device, with 22% picking Internet radio, up from 17% two years ago. The only device that scored higher was mobile phones (28%).

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