Making Waves: Internet Radio May Threaten Terrestrial Drive-Time
While actual penetration remains fairly low, Internet radio poses at least a hypothetical threat to traditional radio listening in cars, according to a new national survey of 2,141 radio listeners, including cell-phone-only respondents, conducted from August 10-25 by Mark Ramsey Media and VIP Research.
MRM and VIP found that 34% of those surveyed said they would listen less to traditional local broadcast radio stations -- long the dominant drive-time medium for advertisers -- if they had access to Internet radio in their car.
The proportion that would listen less to traditional radio was even higher among young adults ages 18-24, at 42%, and among fans of alternative music, at 50%.
Men were slightly more likely than women to say they would listen less to traditional radio, at 37.3% vs. 33.6%.
Given a choice between having Internet radio in their dashboard or a broadcast radio in their iPod, 58% of all respondents opted for Internet radio in the dash.
On a positive note, respondents were less likely to "give up" radio than other media and devices, with 5.3% saying they would give up radio compared to 39.1% for game consoles, 15.3% for iPods or MP3 players, 14.2% for DVRs, 12.9% for DVDs, and 5.9% for TV. However, these results may simply reflect the fact that there is no cost savings associated with forgoing free broadcast TV or radio.
This isn't the only data suggesting Internet radio could pose a threat to traditional radio in drive-time listening. A survey by J.D. Powers released earlier this month found that car-buyers' favorite audio system feature was the ability to play music file formats of their own choosing, such as MP3 files or iTunes.
Separately, in January, Internet audio service Pandora struck a deal with electronics manufacturer Pioneer Corp. that will allow consumers to bring Pandora's personalized audio content to their automobiles. Pioneer is manufacturing a multipurpose navigation and media device, priced at $1,200, that will allow iPhones customers to stream the online music service to their car stereos -- after they download a new app that allows the devices to link up.
Pandora senior vice president Jessica Steel remarked: "Delivering Pandora's personalized internet radio to our 48 million listeners in their vehicles is a key focus of our company this year."
Outside of automobiles, a new analysis by Bridge Ratings found that pure-play Internet radio stations are taking audience share from traditional radio broadcasters on the Web -- for example, terrestrial radio stations which stream broadcast airplay online.
Using Ando Media's Webcast Metrics, Bridge determined that pure-play Internet radio's share of total online listening increased from 35% to 49% between November 2009 and June 2010. According to Bridge, "literally all growth [in Internet radio listening] between November 2009 and June 2010 was due to the increase in listening among those pure-play Internet stations measured by Ando."