97.3 million Americans currently access the web using their mobile phones. That number represents nearly a third of the population and will increase to 156 million and almost half the population by 2015, according to eMarketer. Much of that usage is thanks to the expanding usage of smartphones. Nearly 30% of the population will use smartphones by the end of this year, by 2015 it is projected that 150 million Americans will use a smartphone.
Streaming is a popular smartphone activity, as evidenced by research reported by Arbitron/Edison’s Infinite Dial Study which found that 8% of smartphone users listen to Pandora daily, and 5% listen to the streams of AM/FM stations. Another study recently found that streaming music from mobile devices has grown significantly in the past year. comScore just released new data showing that listening to music on a mobile phone (smartphones and non-smartphone) grew more than 2% in 3 months to 20.3% of users.
But many reports also show that the US lags other countries in terms of the way we use mobile devices to make purchases. While the mobile payments market has surged 76% in the past year globally, only a small portion of that activity comes from the US. While estimates of the size of the marketplace vary, research firms all agree that it’s going to grow.
I’m thinking about the ways that streaming audio on smartphones and making purchases either online or in person using a smartphone go together and wondering if there’s some ways that streaming audio campaigns can integrate mobile payment options to prompt immediate responses and boost the effectiveness of ad campaigns..
Last week Forrester Research released a new study Understanding the Changing Needs of the US Online Consumer 2010. It’s a deep survey that interviewed more than 30,000 US consumers about their media habits. Highlights include:
- High speed Internet connections are the norm, with 91% of the population connecting online through broadband.
- Time spend with TV and Internet are now equal. Americans spend an average of 13 hours per week on each. Time spent with the Internet is up 121% since 2005.
- Time spent with radio (not online), newspapers and magazines is dropping.
The study looked at a variety of online behavior and categorized certain activities as “mass appeal” or not. After email use, which has been adopted by 90+% of the population, shopping online is the most widely popular online activity – in 2007 about one-third of the population was doing so, by this 2010 study more than 60% of respondents shop online . Social networking is the next most popular activity reaching 62 million US Adults. Other activities such as blogging, listening to streaming audio, and IMing are engaging less than one third of the population and will never be mass appeal, according to the study.
Although the study also notes the growing popularity of Internet use with texting and email leading the list of popular activities. Interestingly, despite the fact that listening to music online was basically sidelined by the study as an activity that will never be mass appeal, this chart shows that mobile online listening to music doubled its audience 2007 to 2008 and again 2008 to 2009. Only social networking equaled that rapid growth.
Online music streaming services such as Pandora and Spotify appear to be driving interest in online in-car audio, according to new data from Vision Critical. In an online survey among a representative sample of 4000+ online consumers in the United States, Britain and Canada, the survey found that one-in-four drivers in the United States, Britain and Canada regularly play personal digital music through their car stereo system, and more than 50% are interested in doing so.
Broadcast radio is still the dominant source of audio in the car, more than three quarters of respondents in all three countries had listened to broadcast radio in their cars in the past week. What’s more, numbers indicating an interest in listening to digital audio should not be interpreted as a threat to that. Digital audio sources may well replace listening to cassettes and CDs says the survey.
Young men were the most interested in listening to digital audio in their cars, so stations offering streamed formats that appeal to that demographic will see the earliest benefits of in-car listening to mobile streaming.
Comparisons among listening in the US, UK and Canada are interesting. Streaming audio programs in cars in Canada, where royalty rates are considered too high for entry by Pandora and Spotify. Without them to drive interest, listening is growing more slowly than in the US and UK where Pandora and Spotify, as well as other services, have thrived.
Joining the list of manufacturers moving into mobile streaming, Harman International purchased Aha Mobile. Aha Mobile is a technology platform that provides on-demand, interactive, personalized radio to mobile users. It uses location based and text to speech features to personalize and stream audio content. It enables a user to update or listen to a facebook or Twitter feed, receive or share traffic reports, find out what’s nearby for lunch, and listen to podcasts.
“Streaming, on-demand Web content technology is a natural complement to HARMAN’s premium infotainment systems, and we look forward to expanding the reach of this innovative platform,” said Dinesh C. Paliwal, HARMAN Chairman, President and CEO. “We will deploy this new technology to strengthen our global leadership as the provider of choice for rich, interactive infotainment on the road, around the home, or on the go.”
Mobile connectivity has become a key feature for auto industry leaders Ford with Sync, and GM with OnStar. GM just announced a new extension of its OnStar connected platform called MyLink which will feature wifi connectivity, streaming audio featuring Pandora, and other voice activated online options.
Aha Mobile had recently signed a deal with Internet radio Ad Network TargetSpot to sell location based audio ads on their mobile streams.
Pandora, the darling of the US online radio marketplace, recently rolled out genre stations – format based listening channels that enable fans to simply choose a channel and listen to a professionally programmed stream of music. The channels have been in the background for a while but have recently been given more prominence online. Apparently, Pandora is finding out that some listeners want the simple option. Interactivity may be too much work for some listeners.
“I think there’s a huge percentage of the population that will always love what the Pandora brand stands for, which is an approach where you start with some artist names and song votes and build your own channel.” says Kurt Hanson, Founder and CEO of AccuRadio, an Internet radio service that offers channels that emphasize professional programming and some, but less interactivity. “But there’s another segment of the market — an older segment, more mainstream — that will prefer an approach that doesn’t take as much effort.”
A factor that may be driving Pandora’s new promotion of “genre stations” is the prospect of Internet radio in cars. Pandora has b een leading the industry into automobiles, announcing deals with Ford, Pioneer and Alpine this year. In car listening is the final frontier for Internet radio – the place where broadcast radio dominates and lots of folks tune in. It remains a huge untapped potential for audience growth for Pandora and other Internet radio stations.
In the UK radio listening is booming. Radio listening in the UK has reached an all time high of 46.5 million adults, or 90.6% of the UK population (15+), according to new data released by RAJAR (Radio Joint Audience Research).
While big online music services like Pandora, Spotify and others (Last.fm, Guvera, MOG…) are getting a lot of attention these days, Rhapsody is often overlooked. Rhapsody has been around longer than the others – they launched in 2001 as the first music service to offer streaming on-demand access to a large library of digital music. Prior to 2001 they were a service called Listen.com.
In 2007 Rhapsody America became a joint venture between RealNetworks and Viacom. In February 2010, Rhapsody’s owners announced their intention to restructure the company into a fully independent corporation, a move that took place last week with Viacom and RealNetworks, as well as Universal Music Group, maintaining positions in the new company.
Over the years, Rhapsody has tried lots of things, from offering songs that had to be played in their player to DRM free all-you-can-eat offerings. They’ve partnered with Verizon, Yahoo, and iLike/Facebook. The service has over 9 million songs in its library, and for a monthly fee of ten bucks they’re available for unlimited on-demand streaming. Yet, according to the LA Times, its paying subscriber base dwindled from 800,000 in early 2009 to 675,000 by the end of the year.
This week, on the heels of their reorg, Rhapsody launched a new iPhone app that should spur a bunch of new subscriptions. In addition to unlimited on-demand streaming for ten bucks, subscribers can download their favorite Rhapsody playlists to their iPhone, iPod touch or iPad so they can listen anytime — even when they’re not connected to the Internet. From their blog: “Simply launch your Rhapsody app, open the playlist and click the Download icon. You’ll need either a 3G or WiFi connection to do this initially, but once the songs are saved to your device, you can rappel into the deepest crevices of the Grand Canyon and still be able to play them back.” For ten bucks you get to do this on one device, for $14.99 you can download your playlists to up to 3 devices.
Access to 9 million tunes, streaming on demand plus untethered downloads of my favorite songs onto a mobile device. It’s the kind of thing that could make listeners trade in their ipods. (And there’s talk that Apple bought Lala to launch something similar). It really puts Rhapsody in a whole new category, but will the listeners follow? Only their history makes me wonder..
The Radio Advertising Bureau recently released 09 year end and fourth quarter revenue analysis showing that digital platforms were the only revenue category that grew last year. As opposed to Local and National spot, Network and Off-air revenue categories, Digital inventory produced $480 million in 2009, representing a 13% increase in digital revenue.
This is not a strictly streaming number, instead it represents all revenue derived from a station’s website, including activity generated by the websites, internet/web streaming and HD Radio including HD2 and HD3 stations. The report acknowledges that radio’s digital platform continues to provide listeners more choice and deliver additional options for advertisers who, according to the report “increasingly recognize Radio’s loyal audiences who tune in via multiple audio devices such iPods, HD, mobile apps, etc.” Specifically, the analysis points out that Radio’s opt-in communities, ability to drive website traffic, and and branded online opportunities provide additional revenue builders for the industry.
In addition to providing the only growth category for last year, digital revenue is becoming an increasingly significant portion of the revenue solution for broadcasters. In 2009 it represented 6.5% of total revenue (it’s not broken out from all off-air revenue for 2008). Media strategy firm BIA/Kelsey has projected that digital revenues will grow to 30% of radio’s number by 2015 and hit $46.5 billion.
Some 30% of mobile phones are smartphones now, and that’s been a boon to streaming music services like Pandora who developed great apps for iPhone and watched them soar to the top of the most downloaded apps list. But what about the 70% of the mobile phones that aren’t smartphones, and aren’t connected to a 3G network via a data plan?
UpSNAP is a mobile platform that offers streamed audio content to mobile phones via a “click to call” option which can easily connect any phone to an audio stream. Here’s how it works: the phone dials out and connects to any streaming channel on the Upsnap platform. The charges are based on the minutes used, so lots of the programming is short form, but can also be longer, especially at night when many phone plans offer unlimited free calling.
It’s basically an alternative mobile platform for stations who want to reach “feature” phone customers according to Tony Phillip, Founder of UpSNAP. The stations themselves promote the offering to their listeners and drive the traffic. The listener can text the name of the station to *xxx, for example, and they get a return text message with a link to click on to listen to the station. The more traffic a station gets, the more impressions they have available.
Upsnap has developed a nice revenue channel around this model as well – Phillip says UpSNAP is the largest direct response network on mobile phones, serving a quarter billion ad impressions a month – revenue that is shared with the station. Setup is free, it scales endlessly, and offers entry into an untapped mobile audience.