RAIN 11/16: Internet-only radio fuels 20% growth in online listening in 2011

Paul Maloney
November 16, 2011 - 12:00pm

The 826 million hours of online radio listening Triton Digital Media tallied in September is 20% more than January's total. And while listening to broadcast radio simulcast online is indeed growing, it's the huge gains made by Pandora (and, to a much lesser extent, other "pureplay" Internet radio outlets) that's powering that growth.

As a matter of fact, two years ago, 70% of online listening Triton measured was credited to simulcast streams of broadcast radio. As of September's numbers, it's online-only radio that accounts for 70%. During those two years, Pandora saw its AQH (note: we're switching here to the AQH number) more than quintuple from 147,673 in September, 2009  (Mo-Su 6a-12M)  to 752,816 in September, 2011.

[Take a look at the chart on the right. The "outlier" is Pandora. A larger and easier-to-read-sized graph is here. Also, see RAIN's coverage of the September 2011 Triton Digital Webcast Metrics ratings here.]

Mike AgovinoTriton Digital COO Mike Agovino thinks pureplay outlets that allow the listener to influence the music they hear have a clear advantage over basic online simulcasts here. "The broadcast simulcast model does not translate online, where you have so much choice, so much less clutter and the opportunity to customize the experience," Agovino explained, as reported by Inside Radio today. "Broadcasters need to look at how to take the best of their brand experience over the air... and combine it with more choice, less clutter and the ability to customize the content."
 
And, like most things, the best time for broadcasters to start enhancing their online offerings would be "now." Inside Radio writes, "Depending on the market and demographic, the online audience can represent 3%-10% of overall listening for a radio station, Triton says. The company expects that percentage to hit an inflection point within the next 12-18 months with a double-digit percentage of demographics under 40 that will fuel more growth for the space."

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Paul Maloney
November 16, 2011 - 12:00pm
A Borrell Associates report predicts that U.S. radio’s total online ad revenue will grow 85% next year, reaching $539.4 million. And for the first time, online audio advertising will bring in more dollars for radio than on-site display ads, Borrell says.
 
Online audio ads were just 1.7% of total online spending this year. But that's forecast to more than double next year, to 3.2%. Given the shifting proportion of online listening towards pureplay webcasters (especially Pandora, see today's top story), while broadcasters can expect to bring in $159 million for the audio ads they stream in 2012, online-only radio should book $418 million (more than twice radio's take).
 
Of course, local broadcasters should have the advantage over pureplays when it comes to local online sales. And to take advantage of that, Borrell says the key will be mobile.

Borrell Associates

"While traditional local online ad spending will grow double-digits again next year," Inside Radio writes, "the real sizzle to this advertising steak is now found in mobile spending.  Borrell Associates forecasts 88% of all local online advertising will viewed on tablets, smartphones or GPS-enabled laptops by 2016." Borrell predicts local mobile advertising will spike 66% in 2012 to $4.3 billion.

Subscribe to Inside Radio here.

Michael Schmitt
November 16, 2011 - 12:00pm

Nokia's MixRadio on the Lumia 800As we reported in October (here), Nokia's new Windows Phone 7 devices will include MixRadio -- a Pandora-like streaming radio service.

Now Nokia has announced the service will be powered by The Echo Nest (the same service that fuels iHeartRadio). The Echo Nest will provide "music intelligence" about which songs are similar to each other.

But unlike other streaming services, MixRadio will be able to scan the phone's hard drive to see what music the user has. That step will "constantly improve the listening experience over time," writes Billboard.

The MixRadio library contains about 15 million songs, Nokia says. MixRadio will also include around 100 stations programmed by "music experts," Billboard writes.

Billboard comments (here) that MixRadio shows "anyone can do personalized radio...Pandora may have built its personalized radio service on its proprietary Music Genome Project, but falling barriers to entry mean the company is going to have plenty of competitors. (Whether or not those competitors can create an equally satisfying experience is another matter, however.)"

Nokia's Windows Phone 7 devices -- which include the pictured flagship Lumia 800 -- will launch in the U.S. next year.

You can find more coverage from the Echo Nest's blog here and from Engadget here.

Michael Schmitt
November 16, 2011 - 12:00pm

Jonathan BenderSoundExchange has appointed Jonathan C. Bender as its chief operating officer (COO).

Bender has served in the music industry for over 20 years, holding senior operational roles at Concord Music Group, Universal Music Group and EMI Music.

"He will also oversee repertoire management and the organization's database for tracking, collecting and distributing music royalties on behalf of artists and record labels," SoundExchange stated. SoundExchange is the U.S. music industry body that collects and distributes royalties for digital performances of copyright sound recordings.

You can find SoundExchange's press release here.