RAIN 1/26: Mobile ad spending outpaces forecasts; at least half of consumers willing to accept ads

Michael Schmitt
January 26, 2012 - 8:00am

eMarketer's predictions for mobile ad spending over the next few yearsThe U.S. mobile advertising market is "growing far faster than expected," according to new predictions from eMarketer. Users may be happy to accept these ads as well...so long as the mobile app or service is free.

eMarketer now predicts that mobile ad spending will grow 80% in 2012, reaching $2.61 billion. That's an upgrade from their earlier prediction of $1.8 billion. It predicts display advertising will grow 93.5% and video ads will increase 122%. "By 2015," eMarketer writes, "ad-supported mobile content revenues in the U.S. will surpass $1 billion, with growth rates slower but still strongly in the double digits."

Looking specifically at ad-supported mobile music, games and video services, eMarketer predicts ad revenues will grow 52.7% in 2012 (reaching $433.8 million) after growing 81.9% in 2011. By 2015, eMarketer estimates around 30% of mobile music, video and gaming revenues will come from ads. 

Borrell Associates recently predicted that mobile audio ad spending would reach $667 million by 2016 (RAIN coverage here).

Moreover, mobile users seem to approve. Nielsen's State of the Media report for 2011 found that 51% of mobile users are happy to accept mobile ads, as long as the app is free. The report also found that 45% of tablet and smartphone users downloaded a music app in a 30-day period. And 27% of users paid for a music app.

Mobile devicesThis all may be great news for Internet radio. Monetization of mobile listening is reportedly less than that of desktop listeners for some webcasters -- even as mobile becomes the dominant way to tune in to web radio.

For example, in October 2011 a Morgan Stanley analyst claimed that Pandora's desktop listeners generate nine times the revenue of the service's mobile users (RAIN coverage here).

You can find eMarketer's predictions here and here. Ars Technica has more coverage on the Nielsen report here.

Paul Maloney
January 26, 2012 - 8:00am

Canada's CBC and the international Audio-Video Licensing Agency have announced an agreement that will enable the launch of a new CBC digital music service. The broadcaster plans to increase the online availability of its radio programming, including via on-demand services

Meanwhile, AVLA has also forged a deal with Canadian webcaster and digital music company Mediazoic for "reproduction" rights. (For its webcasting operation, Mediazoic has an agreement with Re:Sound to cover performance rights. Re:Sound is Canada's non-profit that licenses recorded music for public performance, broadcast, and digital.) In addition to their own webcasting operation and record- and radio-production facility, Mediazoic creates software tools for third-party organizations who wish to offer their own customized Internet radio stations. Renowned personality Alan Cross is currently a Mediazoic host.

AVLA represents the copyrights of more than 1,000 record companies and copyright owners, including majors Warner Bros., Sony, and EMI. Mediacaster Magazine reports AVLA members "own or control the copyright to most of the sound recordings and music produced, distributed and heard in Canada. It can license both the broadcasting and reproduction of members' audio and video recordings in Canada...

"Both AVLA deals are seen as clever and imaginative business propositions, and among the first such negotiated collective licenses in Canada for on-line streaming and podcasting of radio and online digital music programming," Mediacaster writes.

Read Mediacasters' full coverage here.

Michael Schmitt
January 26, 2012 - 8:00am

Bob MacciniFormer Ando Media CEO Bob Maccini (now a managing director at Angel Street Capital) asks in a new blog post, "What do broadcasters see in iHeartRadio?"

Clear Channel recently added more than a dozen college radio streams to its online radio platform, iHeartRadio (more here), just days after adding KCRW and KUSC (more here). iHeartRadio -- in addition to featuring Clear Channel stations and customizable web-only streams -- now offers stations from Greater Media, Cumulus, EMF, WNYC and Univision.

"Even though I believe in added distribution channels, there simply is very little benefit for stations to join and distribute their programming via this platform," writes Maccini. He sees the Clear Channel as the only winner. "They get content for free to add to the offerings on their platform to the consumer and take advantage of the effects of 'the long tail.'

"It appears that this is more a feel good strategy that terrestrial radio is doing something in digital." 

You can find Maccini's full analysis at the Angel Street Capital blog here.

Michael Schmitt
January 26, 2012 - 8:00am

A "vintage" 1980s radioLifehacker recently highlighted a DIY project that involves converting an old 1980s radio into a Wi-Fi repeater.

The result is a strogner Wi-Fi signal in your house, and you can still apparently use the radio!

"What's really cool is that in [this project], you don't even need to break the radio to put it all together--it's still completely functional after the process is complete," writes Lifehacker. You can find out more here.