About 20 percent of people with smartphones use their device to listen to music in their cars by connecting them to vehicle speakers, according to new info from J.D. Power and Associates. The 2010 U.S. Automotive Emerging Technologies Study also found that more than 40 percent of smartphone owners would like to do so in the future.
In keeping with what would be a logical assumption that smartphone owners are highly interested in connectivity, the study found that their interest levels for wireless connectivity systems in cars are higher than the industry average, both before and after price is revealed. Before price is revealed, 77 percent of smartphone owners indicate interest in wireless connectivity systems for their vehicles, compared with the industry average of 64 percent.
Texting, receiving emails and getting directions are the other activities that smartphone owners use their devices for in the car. Systems and apps that enable them to use their phones more easily to perform these functions – such as a sound system that easily docks or connects with a device, an app that easily connects to a dash, or a program that reads emails aloud – are growing in popularity among this segment of the population.
In car listening is a critical touchpoint for radio, making these findings important to stations interested in providing offerings – both in terms of content and technology – that keeps these listeners happy and engaged.
Several recent articles have questioned the survival of broadcast radio in the face of Internet radio. In an article last month, the NY Times pointed to the fact that Internet radio stations like Pandora, Slacker and Last.fm allow listeners to customize their listening experience as one reason that Internet radio has grown in popularity with listeners. New devices that enable in-car listening will make listening even easier – Pioneer and Alpine are two manufacturers that have introduced new in-car devices. Other companies have introduced apps that make it easier to use your iPhone to stream your favorite Internet radio station in your car.
Perhaps the most ironic article I have read about the growing challenge that Internet radio presents to traditional AM/FM listening is one in AutoTrader.com, owned by Cox Enterprises – the same company that owns 86 radio stations. The article asks:
“are we witnessing the gradual death of traditional broadcast radio? Far from being shackled to, say, Clear Channel’s corporate playlist or a DJ’s whims, Internet radio stations put users in the driver’s seat and allow them to create unique channels based on criteria such as artist, genre, or song. Yet, a savvy, $4.99 app from Livio Radio, which turns the iPhone into a digital receiver capable of receiving over 42,000 AM/FM and Internet stations, will give users access to more broadcast radio stations than ever before, right down to tiny local stations clear across the country.”
While it’s a little strange that this article appears in a Cox owned publication, the point is right on – if streaming technology is viewed as simply an additional channel to the AM/FM dial, then Internet radio presents not a threat but an opportunity to radio broadcasters. Already in the business of producing audio content, stations now have the opportunity to extend their audience base and increase both listeners and time spent listening on a new channel.
Here’s the thing. Internet radio isn’t going away.
But that doesn’t have to be a threat to broadcasters who are willing to extend their platform and offer streaming as an option to their listeners. The mistake broadcasters make is thinking that they have a choice when it comes to streaming, and proclaim streaming as too expensive. If a station’s listener wants to listen online, and that station is not offering its programming online, they will find another station online to listen to.
Isn’t that a good enough reason to stream?
There were many highlights in the full day of programming presented at RAIN Summit West last monday during the NAB Show in Las Vegas. Two research studies were presented that provided excellent data on Internet radio and digital audio’s growing audience.
Radio Futures 2010 is an independantly funded study on audio platforms and usage in the US, UK and Canada done by Vision Critical. Senior VP and Managing Director Jeff Vidler presented the study, which makes a strong case for the future of Internet radio in the US. Nearly a quarter of the respondents (22%) indicated that Internet radio is playing a bigger role in their lives in the past couple of years.
When asked to list the features of online services that are most appealing to them, 53% said streaming songs on demand was most important, followed by radio with customizable features such as selecting and deselecting artists. Radio that streams music mixes designed by music experts was the least popular feature with listeners.
Also of interest, smartphone users are more likely to use a web based app to listen on their device than a broadcast service on the same device. 31% of smartphone users in the US listened on a web only app, while only 19% tuned in with a broadcast radio app on their smartphone, causing the study to conclude that IP delivery is a preferred audio platform for mobile smartphone users.
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.
One category that is not suffering this year is entertainment subscriptions, according to new information released by NPD Group. According to their new study, overall per capita spending on entertainment subscriptions rose by nearly 7% this year.
As of August 2009, 81 percent of U.S. households subscribed to a television service (satellite TV, basic/premium cable, or fiber-optic television service). A similar percentage of households (76 percent) paid for Internet subscriptions. Seventeen percent subscribed to an online music service or satellite radio; and 14 percent subscribed to online gaming subscription services.
While subscriptions to newspapers and magazines have declined, the rapid growth of smartphone sales has driven an increase in mobile data plan subscriptions: 9 percent of U.S. consumers had mobile data subscriptions this year, versus just 6 percent last year.
It’s not just limited to online or connected content delivery either. Fourteen percent of consumers subscribed to a home-video subscription service, like Netflix, this year, which is 2 percentage points higher than last year.
Recently, several Internet radio station owners have quietly told me the same thing. Listeners are willing to pay for content, particularly if it comes with a premium such as better sounding delivery, or no ads. It’s becoming a decent revenue stream for those that have suitable content and a loyal listener base…