05/05

“My Internet Radio Stream is Bigger than Yours”

Here's a piece from Inside Radio so chocked full of inaccuracies that I'm going to address each of them in turn.

Buzz aside, terrestrial webcast usage tops internet pureplays. A pair of recent studies shows that online radio listeners prefer pureplay internet radio stations over the streams of terrestrial stations. But unpublished results from Edison Research and Arbitron’s 2010 Infinite Dial survey obtained by Inside Radio paint a different picture. The researchers found that 47% of Americans 12+ have listened to the stream of an AM/FM station, more than double the amount (22%) that have ever listened to “online audio from internet-only sources.” 

Actually, this has nothing to do with "buzz" and everything to do with facts, as measured by the 100% accountable statistics published by Ando Media.

Unlike the competing sources, Ando's numbers are not estimates.  These are not polls. These are not opinion surveys.  These are not samples. These are accurate accountings of all stream usage among all the pure plays and broadcasters who allow their usage data to be measured by Ando, and that's most of them.

And those data routinely show that the usage of Pandora outstrips usage of terrestrial radio streams, even when you aggregate some of the top radio groups together.

The numbers vary by month, but I wrote about the December results some time ago.  And at that time there were as many users tuned to Pandora as to CBS and Clear Channel combined.

More from Inside Radio:

A finding from a separate Jacobs Media online poll of rock radio listeners showed a similar preference pattern: more than half of respondents who listen to pureplay webcaster Pandora (55%) said that it is better than most commercial radio music stations. “There’s a difference between the perception or attitudes that people have, as opposed to their behavior,” Rose says. “It’s very possible that just because radio stations have a bigger, broader bully pulpit driving people to their streams, they can have a bigger audience. That doesn’t necessarily mean that when people are listening to it, they feel better with that content than the other.” 

The conclusion about the "bully pulpit" strikes me as conjecture.  Yes, the pulpit is potent.  And it's massive.  But if we learned anything from the HD radio promotional debacle it's that listeners do what is in their best interests – they do what they want – not what we may want them to do.

And the fact is that the vast majority of terrestrial radio streams are redundant to what's already over the air, available throughout the market, and freely and easily accessible on every one of the five radios you have in your home, work, or car.  So I should go to your stream….why, exactly?

Pandora, on the other hand, is redundant to nothing and complimentary to everything.

No wonder it's "better" than the local radio station.  If you could tailor a station to your own personal music tastes, isn't it likely to be "better?"

So fuzzy and imprecise recall for what I may or may not have listened to online – assuming I even understand the interview question – is no substitute for facts as measured through an accountable source. And it's no basis for any conclusion about who holds the greater sway in the world of online radio.

That said, why does it matter so much to us who holds that greater sway?  Our job as broadcasters is to satisfy more listeners in more ways and link them with more clients more effectively.  Our job is not to compare what we bench press with Pandora's Tim Westegren.  Let's get over it, and get on with business. Do we need to devote more attention to what we stream and how we are meeting consumer needs in that space?  Yes. So let's do it then.  

Again, Inside Radio:

Pandora’s ascent to the top of Ando Media’s internet radio ratings has also helped fuel the perception that consumers prefer pureplays over terrestrial streamers. But of Ando’s top 20, 18 are over-the-air broadcasters. “What Jacobs forgets is that radio stations are local and Pandora is national, just like Sirius XM,” Southern California Broadcasters Association president Mary Beth Garber says. “Even the big groups don’t have radio stations that stream the same thing in every market and none of them cover every single market.”

Jacobs didn't forget anything because the conclusion itself is incorrect.  Pandora is not national – Pandora is personal.  It's not about national vs. local, it's about "ours" versus "mine."  Pandora is not "one thing."  It's more than 50 million things – at least one for every registered user.

Yet another reason to stop pumping fists and engaging in pointless debates and start leveraging our strengths in the important world of online radio.

Or, if you want to be assured the online radio sky isn't falling, I'm sure I can find a blue sky survey somewhere out there.

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  • Greg

    Mark,
    It’s sad – these terrestrial radio folks just don’t “get it” when it comes to these “personalized” music services, and “personalizing” the radio experience. They will publish study after study, and argue lack of bandwidth, in denial. Oh, but terrestrial radio has countered with HD Radio HD2/HD3 jukeboxes, and trying to sell the General Public on buying new HD radios.
    As a teen back in the 1960′s, I had the awesome experience of listening to Classic Rock, with DJs that actually “personalized” the music experience – I listened as much for the DJs as for the music discovery. In the D.C area we had the small AMs like WINX, WEAM, and WPGC. It’s gone, and now we have nationalized voice-tracking. What does terrestrial radio expect? Turn your back on listeners, and listeners will tune you out. Listening to Slacker, I await with the same excitement of music discovery, as I did back in the 1960s.

  • Justin Tabas

    I work in terrestrial radio and I have heard the argument for Pandora and it seems like there are some strong advocates,but i have to play the devils advocate here and ask “What hole in an already cluttered media/entertainment market does Pandora fill?” (I ask the same questions about satellite radio and jelli radio) I know that the benefits of terrestrial radio, primarily its localization and the benefits of the ipod over terrestrial radio in its personalization (you play only what you want). From arguments above the benefits of Pandora are its personalization but correct me if I am wrong, doesnt an ipod and the easy access and simplicity of sharing music beat Pandora in this benefit. This leads me to believe that Pandora may be a fad that has had a quick rise and will have a quick fall, as it is not actually filling a consumer need or hole in the market. Additionally, regarding benefits of commercial free radio, in my opinion commercial free is not a business model that is successful (thus if that is seemingly another benefit of Pandora beware – not to mention an ipod beats Pandora on that as well). Commercial free is only a smart business decision when you dont have enough patrons to charge advertisers for their attention. Once you have sufficient listeners to charge advertisers for their attention that is a strong revenue opportunity and thus commercials appear. Please forgive my ignorance when it comes to Pandora because though i hear much about it i have never had the urge or necessity to actually use it. I did just go to Pandora, typed in Pearl Jam – skipped the first 5 songs because they werent what i wanted to hear and it told me that due to licensing i have to choose a different channel. Meanwhile if i put my ipod on shuffle i would be satisfied and if i was looking for localization (ie concert updates, news, weather, weekend activities, local input on anything) the best choice would be my local radio station or local news website. Though it seems to be hot right now, I do not see a long term opportunity for Pandora where I do see long term opportunities for localized entertainment if that is what your terrestrial radio station is making a priority. Thoughts?

  • Hannah

    To an extent I can understand what you have to say, but I believe there are many reasons that support that Pandora, Grooveshark, and other web-based radio stations are here to stay.

    1) Technology. As the 18-25 demographic I can safety say the majority of my peers and I listen to music on the computer, apps on our phones, and other mp3 devices, including the IPod. Rarely, if ever, do the devices listed above have the option to listen to fm/am radio. Listening to terrestrial radio only really happens in the car during our five minute drive to work.

    2) Terrestrial radio plays the same billboard hits over and over again. With Pandora the user is given the option to stop a some from playing over and over again.

    3) User's are introduced to new artists because of the genome platform. Apple tried to compete with this by adding the genius sidebar to their itunes platform Terrestrial radio still has yet to show a response.

    Last, but not least, Pandora is branching out to cars. Pandora has a fantastic phone applicaton. This coming year Pandora has partner with Ford, Mercedes-Benz, and GM to create a feature which allows Pandora to function on these cars dashboards. If I could listen to Pandora in my car, you better believe terresitral radio will rarely be on.

    As for your local comment, that's what Google is for. The younger generation accesses the news online, finds apartments online, does taxes online, and has streaming/downloading/listening to music online since the mid-nineties. Its time the for the industry to keep up.

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