Digital Audio / Satellite Radio

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AM/FM radio was the original portable electronic medium as technology migrated out of homes and into cars and onto transistor radios through the mid-20th century. Now online audio services and satellite radio have stolen some of traditional radio’s mobility thunder with delivery on multiple devices and capacity for each user to customize content or to receive unique content based on algorithms
Although it’s all sound, consumers and the respective industry segments differentiate among traditional AM/FM radio, digital audio/Internet radio services, and satellite radio services. The newer audio options have established a place in the media spectrum relatively quickly, appealing to younger consumers, early adapters, upscale adults – and advertisers, who are attracted to the expanded options afforded by satellite and digital/online audio marketing.
Digital Audio (Internet Radio, Streaming Audio) Streaming media is multimedia that is constantly received by and presented to an end-user while being delivered by a provider. The verb “to stream” refers to the process of delivering media in this manner; the term refers to the delivery method of the medium rather than the medium itself.
Streamed music (or other audio) may be played on a downloaded player on a compatible device or on a player embedded in the website from which it is streamed. Audio music streaming sources include Google Play, Grooveshark, iHeartRadio, iTunes Radio, Pandora, Rdio, Rhapsody, Slacker, Spotify, TuneIn.
Digital music technology records, stores, and reproduces sound by encoding an audio signal in digital form rather than analog form.
Pureplay radio services are webcasters that transmit only on the Internet; they don’t transmit simulcasts of AM/FM radio broadcasts. These may not be interactive (“on demand”) based on a ruling on royalty payments. (Arista)
Online radio’s monthly audience (pureplay/AM/FM streamed combined) is estimated at 180 million, representing 64% penetration of the U.S. 12+ population Listening by P12+ over the past years have been substantial 2011 @ 22% 2012 @ 29% 2013 @ 33% 2014 @ 36% 2015 @ 44% 2016 @ 50% 2017 @ 53% 2018 @ 57% 88% of America’s 12-24 year-olds listen online monthly 73% of 25-54’s are online listeners The 55+ audience is slower to adopt, with just under 1/3 (33%) penetration
An estimated 59% of persons 12+ (estimated 160 million) tune in to online radio weekly
Digital radio continues to grow, partially as result of starting from a low base number, but also owing to adaptation among younger consumers and innovations in technology. Among pure-plays, growth is measured in sessions, not listeners like AM/FM radio.
On-demand streaming audio of music grew 59% from 252.38 in 2016 to a record 400.48 billion streams in 2017
Among Americans who stream music online, aproximately half create their own playlists, while 35% use public playlists based on genres or moods
While music is a popular content type on digital or online audio, but spoken word programming, especially in podcasts continues to see growth.
The Internet audio pie is continually growing with increasing completion across platforms and contexts Leading services are flourishing Pandora continues to gain traction over Spotify based upon trends in The Infinite Dial 2018 AM/FM radio streams comprise an important element of online radio usage
18% of Americans 12+ (an estimated 51 million people), live in households that have at least one Smart Speaker. Smart Speaker ownership has more than doubled from 7% from 2017 Adoption is at a faster rate than the early days of the smartphone, which showed only 4% growth in a comparable timeframe. 72% of adults own an Amazon Alexa but not a Google Home, 17% own Google Home but not Amazon Alexa and 11% of adults own both.
Audio Podcasting A podcast is an audio program formatted to be played on the iPod and made available for free or for purchase over the Internet. The name derives from the combination of broadcast and iPod.
Podcasts are shows similar to a radio show that is produced by professionals or amateurs and posted to the Internet for download and listening or viewing.
In 2018 44% of persons 12+ had ever listened to an audio podcast, an all-time high – increasing from 40% in 2017, 36% in 2016 and 33% in 2015 A year ago, 18% of podcast listeners described the car as the place they most often listened to podcasts; this year, that number is 22%.
Approximately 73 million (26%) of Americans reported listening to a podcast in the past month in 2018 – nearly double from 12% in 2013
The majority of podcast listeners listen to multiple podcasts each week,with an average of 5 podcasts listened to weekly Listen to 1 podcast per week - 18% Listen to 2 podcasts weekly – 17% Listen to 3 podcasts weekly – 13% Listen to 4-5 podcasts weekly – 21% Listen to 6-10 podcasts weekly – 17% Listen to 11 podcasts weekly – 14%
Podcast tune-in source shifted significantly from computers to mobile devices in just one year (2013 vs. 2014). The shift continued, albeit more slowly, 2014-2015: Access podcasts via computer/laptop 2015 – 42% 2016 – 34% 2017 - 33% 2018 - 29% Access podcasts via smartphone/tablet/portable audio player 2015 – 55% 2016 – 64% 2017 - 65% 2018 - 69%
Streamed or online audio not seen as replacing AM/FM radio in the car. AM/FM Radio continues as the most used audio source in car over other audio options including owned digital music.
Satellite Radio Satellite radio arrived on the American scene with the September 2001 debut of XM Satellite Radio, followed by Sirius Satellite Radio in July 2002. The two competitors merged in July 2008 after it became apparent the sector couldn’t support two distinct entitites – now known as SiriusXM Radio. Satellite radio services broadcast from satellites, with programming delivered primarily to vehicles or other dedicated devices. Programming is available only to those who subscribe to the service.
Satellite radio subscriber categories: Self-Pay – individuals pay their own monthly fee Promotional – Depending on how initial deal with an auto partner is structured, promotional subscriptions may or may or may not be “paid” by the manufacturer or a third party
Satellite service claimed 32.17 million subscribers as of Q3 2017 Self-pay subscribers were 26.986 million Total subscriber growth of 119,000 was the smallest increase since Q4 2103.

Digital Audio Accessibility: Consumers like the ability to access streamed content 24/7, via an increasing variety of delivery platforms
Ease of Use: is a major factor in consumers’ quick adaptation of streaming services, other digital audio.
Consumer Data: Digital audio platforms have a wealth of “big data” on their subscribers that can be used to help advertisers target specific consumers or segments.
Targeting: Targeted audio advertising can be inserted into live stream, enabling advertisers to target listeners based on user profiles, listening preferences, location, demographic and psychographic criteria and on specific devices; or to create custom segments based on listener data.
Trackable: Advertisers can immediately see impact of response to their advertising.
Mobility: In-Car listing via Cellphone grew from 6% in 2010 to 26% in 2014 – to 44% of total 12+ in 2018.
Satellite Radio Advantages Availability: Consumers can access in their cars, as well as on many digital devices. Also available via many cable and satellite TV services
Drivers can access same programming anywhere: Has strong appeal to people who spend a lot of time in their vehicles, and especially those who drive long distances
Emulates AM/FM Radio: Wide variety of programming choices, with channels offering choices of music formats, on-air personalities, and news, talk and sports formats
Upscale: Nearly half (48.13%) of subscribers reside in households with $250K+ incomes, possibly an reflection of relatively high subscription fees
Ad Acceptance: Although they pay a subscription fee, satellite listeners appear to tolerate commercials

Digital Audio Awareness Outpaces Use:  Awareness of streaming services is high among the American public (96%) 85% are aware of Pandora iHeartRadio has 67% recognition 65% are aware of Spotify Deezer and AccuRadio, the least-known services, have 8% and 7% awareness levels, respectively Only 48% of the 12+ population use Pandora to to keep up-to-date with musc
Reliability: Consumers won’t tolerate poorly designed interfaces or unreliable features and will switch quickly to alternative services
Lack on In-Vehicle Penetration: The majority of vehicles still don’t have stereo systems that will accommodate a Smartphone or blue-tooth connection, limiting access to streaming services on the road
Cost: Access to services (or expanded functionality) may require payment of subscription fees
Resolution of ongoing legal issues regarding royalties for music aired on digital audio and satellite radio channels may lead those incur additional costs for their programming and ultimately result in passing those costs along to subscribers, or limiting music selections available
Increased Competition in Sector:  Pandora has been the early leader among digital services, but has experienced some erosion as competition with other services has heated up Pandora ranks the highest in audio brand awareness by approximately 85% of U.S. consumer 12+.
Relatively Low Rate of Adaptation:  Consumers are not migrating en masse to digital. Consumers continue to tune into AM/FM radio as radio continues to deliver content across devises and platforms as well as on-demand
Content Limitations: News and Sports content isn’t widely available at this time, although music consumers also want access to information.
Privacy Issues: Perceived advantage through ability to track consumers may also prove to be a liability as government, consumer concerns regarding privacy increase.
Accountability: Online radio and music services do not have accredited audience measurement services in place.
Online audio channels/services compare the total audiences they claim against single AM/FM radio stations in any given market, making the claim that they are #1 in the market; rightly would need to aggregate all stations for broadcast groups within that market for a more accurate comparison.
Additionally, there is no way to determine duplication among “registered users,” as many may have created multiple account to avoid reaching caps on free listening.
Satellite Radio Disadvantages Low In-Car Use:  Satellite radio touts its in-vehicle presence, but enjoys relatively low in-car use among consumers SiriusXM claims 76% penetration of total new vehicle population SiriusXM has only a mid-30% penetration of the used car market Availability doesn’t translate to use 21% of Adults 18+ who have driven or ridden in a car in the past month have ever used satellite radio in their primary vehicle 13% of 18+ drivers/riders say the listen to satellite radio “almost all the time” or “most of the time” in car
Digital Music/Online Radio challenging satellite radio’s in-car use: AM/FM radio is nearly ubiquitous in vehicles of all ages – new or on the road for 10 years or more – and is available at no cost to the listener Digital audio services such as Pandora, Spotify, etc. are challenging satellite radio’s position as the in-car option to AM/FM radio.  SiriusXM has dipped a toe into the streaming audio waters as it has recently invested in Pandora. Apple’s CarPlay presents a challenge to satellite radio as it allows iPhone connectivity to the vehicle’s dashboard for easier access to apps, music, phone calls, etc.
Monetary Investment: Hardware and/or subscription fees required to receive satellite radio contrast to free over-the-air radio
Resolution of ongoing legal issues regarding royalties for music aired on digital audio and satellite radio channels may lead those incur additional costs for their programming and ultimately result in passing those costs along to subscribers, or limiting music selections available

Americans overwhelmingly cite AM/FM radio as the electronic source used most often for keeping up-to date with music: AM/FM radio - 82% CD Player – 49% Owned Digital Music – 45% Satellite Radio – 21%
AM/FM Radio offers broad reach that will fill in the gaps of high percentages of the U.S. population not reached by alternative audio platforms.  Reaches 90% of the total U.S. 12+ population, according to latest Nielsen Audio data
Radio reaches more people weekly than any other medium.
They may like customized playlists and personalized channels on digital platforms, but consumers rely on AM/FM radio for new music discovery: 49% of consumers use AM/FM radio to discover new music, continuing its reign as the primary source of new music discovery 72%of U.S. online streamers listen to some form of radio
Traditional radio offers advertisers an established, audited audience ratings system (Nielsen Audio); online audio services make claims based on a variety of untested and questionable metrics
Radio is the go-to source in weather events, emergencies: Consumers turn to AM/FM radio during emergencies and weather events when access to television and cable signals fails. FM chip-enabled smartphones also help to deliver information during these same emergencies.
Insures Exposure to Ad Messages: On AM/FM radio, everyone hears the same content (both programming and advertising) and advertisers run messages tied to specific content in specific time periods; customized online audio sites allow everyone to listen to their own individualized station, so there’s no way to buy against specific content at a specific moment. Airing schedules on both AM/FM and digital/online and/or satellite insures that target audiences will be exposed to the advertiser message.
Radio has a high out-of-home presence, making it an optimal vehicle for retailers and other advertisers who need to reach the on-the-go consumer right before they shop Among Adults 18+ who have driven/ridden in a car in the past month 49% have ever used owned a CD player in their primary vehicle 45% have ever used owned digital music in their primary vehicle 28% have ever listened to online radio 21% have ever used satellite radio
Commercial Acceptance: Online audio listeners have the capability to skip content and advertising messages; while AM/FM listeners can change the station to avoid commercials, research shows that the majority stay tuned when the spots come on. The study by Arbitron/Coleman Research, “What Happens When the Spots Come On” found that 93% of listeners stay tuned during lead-in to commercial breaks, and 90% stayed for breaks longer than 3 minutes.
Glossary:  http://www.rab.com/public/reports/buysellterms.pdf FAQs:  http://www.rab.com/whyradio/faq.cfm Statistics and Trends:  http://www.rab.com/whyradio/


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