• by Jeffrey Sass , September 27, 2011

When people think of streaming music, they envision the so-called "cloud" services that provide easy access to music that doesn't have to be downloaded or stored locally to a device. Streaming music is typically thought of as delivered from Internet radio and subscription-based services like Pandora and Spotify, or "locker" services like Google Music and Amazon Cloud Player.

That's all true. The first wave of streaming music services has just begun to scratch the surface of what is possible when you combine the dynamic connectivity of the Internet with real-time streaming of music and other entertainment content.

It's hard to fathom that the first portable MP3 players came to market around 1998; music fans have been partying like it's 1999 ever since. Before portable music, fans gathered together in a bedroom or at a venue to share their music listening, and together they screamed in the joy of a shared experience.

Then the Sony Walkman and the subsequent portable cassette, CD, and MP3 players turned music listening into a solo pastime. You grabbed your portable music player, plugged in your headphones and tuned out from everything else as you tuned in to your music. Thanks to streaming, portable music today can be much more than a solitary listening experience.

The fast-growing adoption of smartphones is the latest boon to the portable music business, especially streaming services. With an always-on Internet connection, Wi-Fi, Bluetooth and great audio playback capabilities, the typical smartphone is an ideal Internet radio device, and according to a survey by TargetSpot, 45% of Internet radio listeners listened on a mobile phone or smartphone.

Another impact of the shift of music delivery from all other formats to streaming may well be the advent of social radio and the myriad features and contextual overlays that streaming music from the Internet can facilitate. That music is served up from the Internet in real-time has opened the door to increased real-time personalization and discovery through recommendations, sharing, group listening, chatting and other features that once again make music a shared community experience.

With the emergence of social radio services, music listening can be participatory instead of passive. Just as social media created a world where -- thanks to the widespread use of services like Twitter and Facebook -- you are never really alone, social radio means you may never have to listen alone.

What does this mean for advertisers? The vast majority of streaming music comes through free services, supported by advertising. According to research from Ando Media, TargetSpot and Informa, last year there were nearly 70 million monthly Internet radio listeners in the U.S., and only 2.5 million paying subscribers. Thanks to smartphones and widespread broadband in the home, access to free streaming music is nearly ubiquitous.

Advertisers have had opportunities to engage with music fans around the downloading of music for several years now, and while effective, those touchpoints are generally gone when the music is actually being consumed.

Internet radio (streaming music), like its terrestrial predecessor, is able to weave advertising into the listening experience. However, unlike broadcast radio, Internet radio is a digital, interactive medium; advertising can be far more targeted and engaging, leveraging synchronized visual and audio ads, banners, video, rich media and highly creative custom units.

Social radio, which enables real-time engagement among listeners while they listen together, will likely inspire even more engaging ways for brands to reach music fans on the Web, phones and tablets. New social radio services will be created from the ground up with the ability to incorporate multimedia ads in ways that are contextual, relevant, and interwoven with the consumer experience.

Streaming music is here to stay and becoming as portable and available as the Internet itself. With innovative free services that have engaging social features, listening to music is once again something for fans to scream about.