10/29/13: iTunes Radio not much threat to Pandora (survey)

Brad Hill
October 29, 2013 - 12:25pm

Investment firm Canaccord Genuity surveyed Pandora users who have tried iTunes Radio, to get a picture of its existential threat to Pandora. The survey’s headline indicates a limited downside to Pandora: “92% of iTunes Radio Listeners Still Use Pandora.” RAIN spoke with Michael Graham, author of the research note, to flesh out the survey’s conclusions.

It is important to note that the survey and its report are part of a “Buy” recommendation for Pandora stock, to the company’s investment clients. We asked Graham about the integrity of the research.

“We commissioned this survey from an outside party,” Graham told RAIN. “We had no influence over the who the respondents were. We presented the data as we got it. Obviously there are different ways to interpret it. But the data that we’re showing is raw.”

While the context gives this survey an agenda (Graham: “We’re bullish on Pandora”), it presents an interesting antidote to the fuzzy media math surrounding the iTunes Radio-vs.-Pandora comparison of audience metrics reported by the two companies. (See RAIN coverage here.) Apple recently announced 20-million unique users have listened to iTunes Radio, while Pandora cited 72.7-million active listeners were engaged with Pandora in September.

The research also peers below the pure number of listeners in each service, to discern the reaction and intent of those listeners when evaluating the two competing music platforms. Following are excerpts of our conversation with Michael Graham. 

RAIN: What was the purpose of the project, and the sample size?

MG: We surveyed 860 users, all “iDevice” [Apple] users. We asked them a few qualifying questions: First, are you an active Pandora listener? Second, are you using iOS 7? Third, have you tried iTunes Radio? We then asked them a few questions to compare and contrast the two services, and what their intentions were for future listening.

The purpose was to understand better how competitive the landscape is becoming. We’re bullish on Pandora stock. We’ve tried iTunes Radio extensively, and found it to have good and bad points. We wanted to see what consumers at large think of it. In the short term, we wanted to gauge what the impact would be of Pandora’s October audience metrics.

RAIN: What are the key takeaways?

MG: Number one, 92 percent of those who tried iTunes Radio indicated that they have gone back to using Pandora at least a little bit. Sixty-six percent indicated that they resumed using Pandora as much, or more, than before using iTunes Radio. About 40 percent said they are using Pandora more than iTunes Radio. This is significant. It means that a very small portion will listen to iTunes Radio and never listen to Pandora again. The others will probably fire up their Pandora account in October. So, short-term, we don’t think the October listener metrics [for Pandora] are going to suffer much.

Longer term, I think the implication is that there will be a lot of people using both services. If we roll forward the math behind all this, the eight percent portion of the addressable market that iTunes Radio can go after (not Android, Windows PC), we come to about one percent of the Pandora listener base that is at heavy-duty risk of leaving, and going to iTunes Radio. That’s a much smaller number than most people are scared of.

RAIN: Do the data indicate whether iTunes Radio is expanding the market for streaming listening, or merely is dividing the existing pie differently?

MG: We didn’t explicitly ask that. As a matter of fact -- our survey only questioned Pandora listeners, so we only determined whether iTunes Radio was dividing the market or not. My hunch is that it is expanding the market, and a big chunk of those 20-million [Apple-reported unique listeners] is incremental.

Brad Hill
October 29, 2013 - 12:25pm

Operating in a street-level studio on First Avenue in New York, East Village Radio (www.eastvillageradio.com) is an FM-to-Internet conversion story. Kicked off the air by the FCC for broadcasting on an unlicensed frequency, EVR took its act(s) into IP delivery.

Resembling a college station but with even more eclecticism, EVR presents an always-on schedule of two-hour shows hosted by individual and paired DJs. The programming is mostly musical, but includes straight talk and music & interview mixes. (Some shows are repeated during the week, so if you have DJ skills and live in the city, you might find receptivity to your pitch.) We have a weakness for Guilty Pleasure, which features indie pop on Mondays from 8-10pm.

The great beauty of East Village Radio is its library. Each show is archived. Some of these archives go back for years. There is a deep well from which to drink when you find your favorites. (Guilty Pleasure, has over four years of shows on the shelf.) Program playlists are archived also -- another link to the college-radio ethos which seems to infuse the EVR experience.

Here at the RAIN editorial office, we confess to an unabashed love for East Village Radio. It embodies the renegade spirit of grass-roots broadcasting which might get new wind with the FCC expansion of LPFM (Low Power FM). Wide-ranging, personality-driven, local, and adventurous, East Village Radio brings primal values of broadcasting to the pureplay realm.

EVR is distributed via Android and iOS apps, in addition to the desktop website.

Brad Hill
October 29, 2013 - 12:25pm

RAIN Summits are popular, world-class Internet radio conferences, the preeminent resource for learning and networking in the field of online audio. RAIN Summit Orlando took place in September, 2013. This page links to conference session videos.

RAIN Summit West will take place on April 6, 2014, in Las Vegas.

Session 1: Alternative Revenue Strategies - This panel explores platforms and strategies that drive incremental revenue for streaming audio companies, including performance based and direct response campaigns, ad exchanges, daily deals, and more. Moderator: Paul Heine (Inside Radio) Panelists: Dan Weiner (Pandora), Ted Gurley (Univision), Matt Cutair (Dial Global) , Daniel Anstandig (LDR Interactive) [WATCH VIDEO]

Session 2: Pecha Kucha - Aha by Harman “Connected Vehicle Conundrum” Presenter: Toby Trevarthen [WATCH VIDEO]

Session 3: Ad Insertion Panel - There has been a lot of discussion as to whether broadcasters should use ad insertion as part of their streaming and online strategy. This panel considers both sides, taking into consideration measurement implications, revenue opportunities, programming issues and available resources. Moderator: Kurt Hanson (RAIN: Radio and Internet Newsletter, AccuRadio) Panelists: Steve Goldstein (Saga Communications), Mike Agovino (Triton Digital), Natalie Swed Stone (OMD), Alexis Van de Wyer (Adswizz), Tom Bender (Greater Media) [WATCH VIDEO]

Session 4 - KEYNOTE: David Field, CEO Entercom [WATCH VIDEO]

Session 5: Building a Top Digital Sales Team - Learn from top digital sales executives how to staff and train your digital sales department. What to look for when hiring, best practices for digital sales training, how to arm them with the best sales tools and optimize inventory. Moderator: Michael Theodore (Interactive Advertising Bureau) Panelists: Kurt Gentry (Radiate Media), Sarah Van Mosel (WNYC), Martin Kristiseter (Marketron), Mort Greenberg (Proxi Digital) , Al Pervin (Intertech Media) [WATCH VIDEO]

Session 6: The Internet Radio Marketplace - This presentation by GroupM Next addresses the future of streaming radio, looking at consumer behavior and implications for brands from the advertising agency perspective. It includes recommendations on ways that streaming content providers can optimize the opportunity for advertisers. Presenter: Steve Sherfy, Jesse Wolfersberger [WATCH VIDEO]

Session 7: The Race to the Dashboard - Presented by Triton Digital, this discussion ranges from best ways for integration to happen (in dash, versus receiver) to identifying aggregators, to discussing best options for both listeners and streaming services during the interim stages. Moderator: Brad Hill (RAIN: Radio and Internet Newsletter) Panelists: Geoff Snyder (Pandora), Scott Burnell (Ford Motor Company), Ted Cardenas (Pioneer Electronics), Kevin Straley (TuneIn) , Steve Cotter (Slacker) [WATCH VIDEO]

Session 8: State of the Industry Keynote  - AccuRadio/RAIN founder Kurt Hanson delivers his annual address about the state of Internet radio. [WATCH VIDEO]

Session 9: Streaming Music Trends - Presented by Securenet Systems, this panel features a discussion of online listener habits and behavior, including genres that are popular, music recommendation technology, best strategies for sharing, listening patterns, and more, by a roundup of key execs at top streaming services. Moderator: Jim Lucchese (The Echo Nest) Panelists: Brian Lakamp (Clear Channel Media + Entertainment), Chris Boyce (CBC Music), Eric Davich (Songza), Philippe Generali (RCS - Media Monitors)

Session 10: Internet Radio Awards: Kurt Hanson bestows the RAIN Internet Radio Awards in several categories. [WATCH VIDEO]