• by Erik Sass  @eriksass1, September 10, 2009

New studies bring both good and bad news for radio broadcasters, who have seen burgeoning interest in digital radio both online and via mobile devices. But they have also suffered steep drops in their core traditional broadcast business. Both trends are likely to continue over the next couple of years, according to recent surveys.

On the digital side, more and more consumers are listening to streaming digital radio programming via their mobile devices, per The New York Times, which cited data collected by Pandora, the popular online music service.

Tim Westergren, Pandora's founder, said that about 65,000 people register for a Pandora account each day, with 45,000 registering on mobile phones. Similarly, Clear Channel Radio has reported great success with its free digital radio apps for the iPhone and BlackBerry, racking up hundreds of thousands of downloads. Together, these data indicate that mobile devices may be supplanting desktops and laptops as the preferred listening mechanism.

This is good news for radio broadcasters in general, which have long profited from radio's mobility. For example, it gave them a virtual monopoly on media delivery in automobiles. By transitioning digital radio listening to mobile devices, they can extend their potential reach.

Much as traditional radio broadcasts reached drivers, mobile streaming can reach an even broader potential audience of consumers "on the go," as well as at home. (Many listeners plug their devices into speakers in their cars or at home, according to Westergren.) Better yet, Pandora found that mobile listeners are about twice as likely to click on mobile display ads as they are comparable ads online.

The good news on mobile listening is buttressed by Apple's recent announcement that the newest version of the iPod Nano will include an FM tuner, giving radio a foothold in the desirable demographic of Apple device owners.

However, these developments are also tempered by more bad news for the radio business in general -- which is braced for at least another year of declining ad revenues, according to a new forecast from eMarketer.

Overall, eMarketer anticipates an 18% drop in revenues in 2009 compared to 2008, to just $14.5 billion, followed by a further 2% drop in 2010 to $14.2 billion. These declines come on top of an earlier 11% decline in 2008 compared to 2007.

Altogether, Internet radio will attract about $288 million of ad spending in 2009, according to ZenithOptimedia -- or just 2% of the total projected revenues this year.