Signals Strong For Internet Radio

by Erik Sass , May 4, 2010

Internet radio is burgeoning, according to a new report from SNL Kagan, which predicts more rapid revenue growth. But the big question, as far as media buyers are concerned, is how much of this future growth will come from advertising sales.

Looking at the top Internet radio operations, SNL identified CBS Interactive as the revenue leader, with total revenues of $550 million in 2009, thanks in part to its ownership of Last.fm and ad sales partnerships with AOL Radio and Yahoo. It also has a large number of station Web sites.

Counting other partnerships with CNET, Radio.com and TV.com, CBS Interactive boasted an average 226 million unique users per month in 209. Competitor Clear Channel posted total revenues of $175 million in 2009 -- virtually all from advertising -- with an average monthly base of 100 million unique users.

Among pure-play Internet radio operations, MySpace led the way with $490 million in revenue and an average 70 million unique users per month -- boosted "by leveraging Fox's music-focused TV shows 'Glee' and 'American Idol,' according to SNL Kagan.

In 2009, Pandora had about $50 million in revenue -- also mostly from advertising -- and 50 million registered users, about half of whom are actually active.

Adding up the top players, Internet radio delivered over $1.25 billion in revenue in 2009 -- but comparing this figure with separate numbers from the Radio Advertising Bureau, it's clear that online advertising is still playing second fiddle to subscription and download fees.

The RAB reported total digital ad revenues in 2009 of $480 million -- or 38% of total online radio revenues.

consumer, music, radio, trends

3 comments about "Signals Strong For Internet Radio".

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Andrew Knight from Nokia, May 5, 2010 at 8:52 a.m.
What would be good to add to this review is the sentiment and needs of consumers relating to Internet Radio and without it there is a gap in the analysis. How will consumer demands fuel the potential of this media and what type of devices will they be thinking of using in the future to consume internet radio?
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Thomas Siebert from BENEVOLENT PROPAGANDA, May 5, 2010 at 10:22 a.m.

Since I bought my Squeezebox internet radio receiver three years ago, I've listened to almost nothing else and dumped satellite radio. It's only gotten better, too, as the product's corporate owner has struck deals that now allow me to stream Pandora, Last.fm and other services.

Even the few local public radio stations that I listen to -- WFUV, WFMU, etc. -- I program into the Squeezebox. Can't recommend it highly enough.

Jonathan Mirow from BroadbandVideo, Inc., May 5, 2010 at 1 p.m.

That's because internet radio rocks, is customizable, lacks 15 minute commercial breaks, streams on multiple devices and the list goes on. Since I got my Droid I have not turned on my car radio in 6 months. Hell, I'm IN media I don't care about terrestrial radio anymore. As I am writing this I'm listening to Oingo Boingo doing "Dead Man's Party" - coincidence while I'm writing about radio? I think not.