Terrestrial vs. Internet Only Streaming

During the months of December 2009 and January 2010, Bridge Ratings conducted interviews with over 3000 Internet radio listeners to determine their current and intended Internet radio listening preferences.

Highlights of the study are:

Just over 60 million Americans listen to some form of Internet radio in a typical week. This includes both AM/FM simulcast streams and pure-play Internet-only radio (e.g. Pandora, AccuRadio).
84% of this group regularly listens for at least five minutes to AM/FM simulcast streams in a typical week.
62% of the total streaming group regularly listens for at least five minutes listening to Internet-only streams.
77 million Americans will listen to Internet radio streams (on both computers and mobile devices) by January 1, 2015.
Based on interviews which measured satisfaction and fatigue levels, we are projecting that by that date the percentage listening to AM/FM simulcast streams will fall to 81% while those listening to Internet-only radio streams will increase to 72%.
The percentage of streaming listeners for AM/FM simulcasts and Internet-only will reach parity by the end of 2016 (77%).

The following chart represents some of the above figures.

Spending Time with Internet Radio

While trends indicate that over time AM/FM simulcast streaming audiences will peak and begin to slide in 2012, time-spent-listening to both simulcast and Internet-only streaming will improve.

On average, AM/FM simulcast streaming generates about 2.5 hours per day of listening while Internet-only stations fall in at 1.4 hours per day. This lower average among Internet-only radio is affected by multiple consumer issues, some of which have been covered in a previous report.

Internet-only streaming listening will increase to around 1.55 hours per day by 2014 while AM/FM simulcast streaming will continue to improve to 2.76 hours. However, the reasons differ.

"Our panel revealed that over time their usage with Internet-only radio becomes more sophisticated and they learn which sites generate the best consumer experience, "explains Bridge Ratings President Dave Van Dyke.

"Unlike the AM/FM simulcast experience which duplicates the terrestrial broadcast consumption model, there is a consumer learning curve of sorts with pure-play Internet-only radio streaming. Experimenting with different sites over time provides more comfort for the user and time spent with those sites increases. This is why we project time-spent-listening improving for Internet-only streams."

Time-spent-listening to AM/FM simulcasts will continue to increase but at a slower rate. Though the number of these simulcast consumers will begin to fall off in 2012, the time-spent-listening will increase slightly as fringe users fall off. "AM/FM simulcast streams are at greater risk of deteriorating listening levels," continues Van Dyke.

"When questioning streamies who use both AM/FM simulcasts and Internet-only streams, there is a distinct difference in the reasons for use." Internet-only radio streams are perceived to be more "adventurous" and are better sources of music specialization or discovery than what terrestrial radio streams provide.

One recommendation for traditional radio coming from this study is to develop alternate streams and on-demand streams that offer content different from their simulcast versions," suggests Van Dyke. "This is an idea that isn't new, but few traditional stations take advantage of this opportunity or are not approaching development of these alternative channels in the right way. Their brand power is an advantage they have over their Internet-only brethren and alternative streams can off-set future attrition if programmed and promoted effectively."

The two Streamie contingents have other differing characteristics as well.

The amount of time spent listening to streaming type (AM/FM simulcast vs. Internet-Only) varies greatly. Listeners who prefer AM/FM simulcast streams only spend 15% of their time weekly listening to Internet-only streams.

Music discovery plays a much larger part for listeners who spend most of their time with Internet-only radio. On a preference scale of 1-10, where 1="not an important reason to listen" and 10="the only reason to listen", Internet-only streamies value music discovery twice as much as the AM/FM simulcast cohort.

How much listening by these groups occurs on mobile handheld devices? Again, Internet-only streamies spend a greater percentage of their weekly listening (18%) on a mobile device than do "Simul-streamies" (8%).

*Sample = 3313 Internet-radio streaming consumers 6+
Methodology: Random digit dial, address-based telephone interviews, one person per household.

Sample error = +/- 1.8%