• by Erik Sass  @eriksass1, April 8, 2009

The economy be damned. Online radio is still going strong, according to "Infinite Dial 2009," Arbitron's latest overview of the medium, due out later this week. The news follows a series of deals confirming that whatever happens in the economy at large, online radio is rapidly carving out a niche for itself in the digital media landscape.

And it's a sizeable niche. 42 million Americans over the age of 12 listen to radio during an average week, more than double the 2005 figure of 20 million, and up 27% from 33 million in 2008. That means online radio currently reaches about 17% of Americans over the age of 12, up from about 8% in 2005 and 13% in 2008. These figures are based on data collected and analyzed by Arbitron and Edison Research.

Recent months have also seen more deals in the online radio arena, as ad networks strive to build reach and improve measurement and accountability for advertisers.

This week, Katz Online Network and Ando Media renewed and expanded their deal for measurement of radio audience. Under the terms of the new deal, data from Ando's measurement platform will be made available, in real time, to all national sales agents who work in digital radio. Overall, the Katz Online Network delivers more than 4 million listeners per week, or 10% of the total online radio audience according to the figures from Arbitron and Edison Research.

In October, Targetspot, another big online radio ad network, acquired Ronning Lipset Radio, creating a combined network of over 1,000 online radio stations, including the Web portals of traditional radio stations. At the time, the network reached more than 6 million listeners a week. Among the merged network's partners are CBS Radio, Entercom, Yahoo, AOL and Live 365.

These are welcome signs of life amid a steep economic downturn; still, online advertising contributes only a small portion of radio's total revenues. In 2008, off-air revenues including online totaled $1.79 billion, or just 9% of radio's total $19.48 billion. Even worse, the rate of growth in off-air revenues slowed dramatically over the course of the year, with 15% growth in the first quarter dropping to 10% in the second, 5% in the third and 1% in the fourth.

This tally is especially troubling because many traditional radio broadcasters are counting on growing Internet ad revenues to offset declines on the broadcast side. Through March, total radio revenues have declined for 22 months straight.