• by Erik Sass  @eriksass1, April 17, 2006

The digital revolution is good news for radio as an ad platform, because it's adding to, not diminishing conventional analog broadcasting audiences, finds new research released last week by radio ratings firm Arbitron and Edison Media Research.

More than 52 million Americans age 12 and up now listen to radio over the Internet at least once a month -- a 50 percent increase over 2005 -- while 30 million of these said they tuned in during the last week, an 8 percent increase over last year, according to the report, "The Infinite Dial: Radio's Digital Platforms."

Arbitron and Edison were quick to point out the desirability of these demographics, noting that Internet radio reaches 19 percent of the 18- to 34-year-old audience and 15 percent of the 25- to 54-year-old audience on a weekly basis. Meanwhile, these listeners are 36 percent more likely to belong to a household with and annual income exceeding $100,000.

"The Infinite Dial" asserts there actually is little friction between the Internet and traditional radio broadcasting as advertising media. The amount of time spent listening to traditional AM/FM radio by consumers with access to digital platforms appears to be roughly the same as those without: about 2 hours and 45 minutes daily.

As for future intent, 77 percent of listeners with access to digital platforms for all kinds of media -- not just radio -- said they didn't foresee listening less to AM/FM.

Meanwhile, more innovative broadcasting methods, including online podcasting, have made less headway, according to the report, with only 11 percent of respondents recalling ever hearing one. Still, the youthful skew of podcast audiences makes them an attractive advertising medium. Twenty percent podcast listeners are ages 12 to 17, and more than 50 percent of listeners are under the age of 35. The medium promises access to a very lucrative demographic, especially if the younger cohort continues tuning into podcasts as it moves into adulthood.

One of the broadcast radio industry's main initiatives, HD terrestrial digital radio, meanwhile, seems to be getting a mixed reception. Only one third of respondents said they were "very" or "somewhat" interested in the technology, and of these, only one third said they would consider buying a digital radio set if the price drops to $100. HD iBiquity, the firm that controls terrestrial digital radio technology, is forecasting a low-end price of $200 by the 2006 holiday season, indicating HD digital radio has a long, hard slog ahead of it.

By the same token, HD terrestrial digital radio may present a real threat to satellite radio in the smaller niche market for digital radio: 40 percent of satellite radio listeners said they were interested in HD terrestrial digital radio. Satellite radio receivers can also receive terrestrial digital broadcasts, which means the next few years could see increasing churn in the satellite market, especially since HD digital radio is free. This niche audience is highly desirable, according to Arbitron and Edison, with 27 percent of satellite subscribers living in households with annual incomes exceeding $100,000.