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After a tough 2011, Borrell predicts growth for local radio's online ad revenue

Tuesday, April 3, 2012 - 12:05pm

Borrell Associates says "pureplay" Internet radio generated $206.3 million in streaming audio advertising in 2011, significantly topping broadcasters' $67.4 million. And while Borrell Associates’ new Benchmarking Local Online Media: 2011 Revenue Survey predicts radio will double its streaming audio revenue in 2012, it'll still be only half of what "only-online" radio does.

Borrell says streaming audio ads represented 22% ($67.4 million) of broadcasters’ 2011 online revenue. 

Local stations didn't have a great 2011 online. While the online advertising market grew overall, local radio's share of the pool didn't keep up. While the rest of the online media industry grew 20.6%, says Borrell, radio grew only 6.1%, giving them less than 2% of 2011's $16.4 billion total.

That said, Borrell is looking for radio to turn it around, with a nearly $410 million 2012 in local online ad sales, for a 35% increase over 2011.

(See Borrell's predictions from November here. We also recently reported on BIA/Kelsey's 2011 local online ad revenue recap here.)

Borrell Associates CEO Gordon Borrell will both participate in the "Charting Digital Audio Ad Dollars" panel, and present a "POV" (see story in today's issue) at our upcoming RAIN Summit West in Las Vegas (more here). Read more on the Borrell study here.

Weekly web radio listening up 30% from 2011, largest growth since 1998 says Edison and Arbitron

Wednesday, March 28, 2012 - 12:45pm

Internet radio on smartphonesAccording to new data from Edison Research and Arbitron, weekly Internet radio listening in the U.S. grew 30% from 2011 to 2012. "This is the largest year-over-year increase we’ve seen since we began tracking this stat in 1998," writes Edison VP Tom Webster. And it's likely thanks to smartphones.

The data is part of Edison and Arbitron's report, "The Infinite Dial 2012: Navigating Digital Platforms," which will be released in full on April 10.

The companies found that 29% of Americans 12+ used Internet radio (including AM/FM streams and pureplays) weekly in 2012, up from 22% in 2011.

Webster points to smartphones and mobile web access as the catalyst. "In a sense, the continued penetration of smartphones is encouraging something of a radio renaissance, though it doesn’t look like your father’s Victrola," he writes.

"The ability to pick songs is now an algorithm. The Internet radio services of tomorrow have to show me how that content matters, if they want to matter."

You can find more from Edison Research's blog here.

Pew: Mobile devices beginning to impact broadcast radio, but may prove a "saving factor" for journalism

Monday, March 19, 2012 - 12:40pm

Pew's findings on mobile news consumptionLast year news media "entered a new era," writes the Pew Research Center. "The age of mobile, in which people are connected to the web wherever they are... the new era brings mixed blessings." That's the big takeaway from Pew's new report, "The State of the News Media 2012."

For radio in particular, "digital options are beginning to have an impact" on AM/FM, "especially in the mobile realms." Pew notes that nearly 40% of people listen to online-only audio services (a number which eMarketer expects to double by 2015). "Even more worrisome for AM/FM radio, in-car listening via smartphones nearly doubled in the last year to 11% of people who own cellphones. And carmakers are installing new models with internet-ready listening," writes Pew. 

One of the biggest names in news radio, NPR, saw a drop in total listening "for the first time in years, but the organization is making headway in developing digital platforms to reach new audiences," the report states.

Overall though, Pew repeats what it wrote last year: "the news industry... finds itself more a follower than a leader shaping its business." The industry is following a handful of tech giants (like Google, Amazon, Facebook, Apple) which are "rapidly moving to consolidate their power by becoming makers of 'everything' in our digital lives."

Though in 2011 "traditional news operations also took new steps to monetize the web in their own right," five tech companies accounted for nearly 70% of all web ad revenue.

But it may be the mobile devices those tech companies produce -- especially tablets -- that preserves the "demand for long-form, quality journalism," argues Chris Hughes, who recently bought The New Republic.

"In sum," concludes Pew, "the news industry is not much closer to a new revenue model than a year earlier and has lost more ground to rivals in the technology industry. But growing evidence also suggests that news is becoming a more important and pervasive part of people’s lives. That, in the end, could prove a saving factor for the future of journalism."

You can find Pew's report here.

NPD Group: Far from hurting music sales, online radio cited as reason for growth

Tuesday, March 6, 2012 - 11:55am

Music sales increasingAfter years of decline, more consumers are buying music, in part thanks to online music services. So says the NPD Group in its "Annual Music Study."

The NPD Group found that in 2011, for the second consective year, the total number of music buyers increased (up 2% to 78 million). Plus, total music-track sales rose 4% thanks to "a healthy paid-music download market."

Consumers surveyed by the NPD Group pointed to the wide variety of music services now available -- from AM/FM to Pandora and Spotify -- as a driving factor behind increased music spending. Mobile devices, a decline in P2P downloads and the perception of improved quality also were cited as reasons for growth. 

The report makes the (oft-made) point that the profileration of online radio and web music services hasn't replaced the need to buy and own music. In fact, as stated, it may help drive more music sales.

The NPD Group"Despite all of the exciting online radio options, we are still seeing healthy growth in the market for digital-music downloads," said Russ Crupnick, a SVP at NPD. "As long as consumers want to own digital tracks and continue to have a passion for the physical format and a way to play their CDs, online radio and paid-to-own music will live in harmony." 

All Things Digital's Peter Kafka comments (here) that it's "a little counterintuitive" that music purchases would increase in the face of growing free streaming options.

"But that’s always been part of the streaming music service pitch to the big labels... We’re starting to hear murmurs from the labels that this is actually how it’s working in the real world, too."

You can find The NPD Group's press release here.

New report encourages existing Australian broadcasters to launch their own customizable web radio offerings

Monday, March 5, 2012 - 11:40am

AustraliaAustralia may soon be a new marketplace for customizable Internet radio services, according to a new report from Morgan Stanley. The firm recommends existing broadcasters launch their own personalizable offerings in the meantime.

Morgan Stanley's report predicts that "personalized Internet Radio services, such as Pandora, will enter this market [Australia] at some point over the next 2-3 years." Such a new entrant will capture 2-3% of the nation's market within 3 years of launch, according to the report.

Australia already has access to on-demand streamers like Spotify, Rdio and the Omnifone-backed Rara.com.

Morgan Stanley goes on to forecast that the largest Australian media group Southern Cross Media (SXL) may be hurt by the launch of Pandora or similar services. However, SXL also "has the strongest platform from which to launch its own personalized Internet radio business and to gain a first mover advantage over new entrants," writes The Register.

"We believe it’s only a matter of time before the Internet has a negative impact on traditional radio listenership," Morgan Stanley's report states. "And thereafter radio asset values in Australia too."

The Register has more coverage here.

Revenue growth outpaced web music audience gains last year, study finds

Thursday, March 1, 2012 - 11:30am

Web radio growthFor years, Internet radio and web music services have been growing their audiences but complained that revenues weren't keeping up. That all changed last year, says AccuStream Research, when for the first time revenue growth outpaced listening hour increases. Moreover, the research firm expects that growth will "continue unabated in 2012."

AccuStream's report (“Internet Music Radio and Track Play Growth 2012-2014: Listening and Monetization Analysis”) found that listening hours for "Internet music radio and track play" (presumably including services like Spotify and Rhapsody) grew 50.5% in 2011, reaching more than 1.3 billion hours monthly.

Meanwhile, mobile listening exploded: it grew 222% in 2011, according to AccuStream, and now accounts for 41% of hours streamed monthly. In 2012 70% of Pandora's listening is "non-PC," says the report, as is 50% of Slacker's audience.

Increases in monetization (including ad and subscription revenue) outpaced listening hour growth, with an advance of 64.6% in 2011. The study reports the industry generated more than $293 million in gross media spending (audio, video, display) and another $171 million in subscription revenue.

In late October 2011 SNL Kagan forecast that Internet-only radio stations would generate $293 million in revenues in 2011. That same study predicted AM/FM digital revenues would reach $713 million in 2011. Audio4Cast has more on SNL Kagan's predictions here.

AccuStream ResearchAccuStream expects the market to increase 78% in 2012, reaching 6.2 billion avails per month ("driven in part by Pandora's increasing focus on the in-stream audio format"). Audio fill rates will reach 60% this year, says AccuStream, with an eCPM (average equivalent CPM) of $6.80.

"Combined with an in-house sales force selling into top local DMAs where terrestrial broadcast radio advertising has historically been bought," writes AccuStream, "the audio format is moving to the forefront of the programmer's monetization initiatives."

You can find AccuStream Research's press release here.

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