Bridge: Net Radio Leads On Digital Growth Scorecard
August 20, 2007 at 5:30 AM (PT)
The latest BRIDGE RATINGS report on the growth of digital media came up with some fairly predictable, while at the same time, sobering statistics. As could be expected in an era where digital media is growing by leaps and bounds, Internet radio showed the most significant growth of monthly users, rising from 24% of the U.S. population (72 million) at the end of 2006 to 27% (80 million) in JUNE. Weekly listening rose from 19% to 20%, with a weekly Internet radio audience is estimated at 60 million.
Consumer awareness of HD radio continues to grow impressively, but consumer interest in owning or listening to HD radio continues to decline
BRIDGE predicts that monthly Internet radio listening will reach a third of the U.S. population by the end of the year, and rise to 40% by the end of 2008
Satellite Radio Mixed ... Or Is It?
BRIDGE's conclusions about satellite radio was decidedly mixed. On the one hand, awareness and interest in satellite radio is growing again, which it attributed to the media reports of a merger between SIRIUS and XM. On the other hand, it points to lower audience growth projections and what it considers to be a high churn rate as signs of satellite weakness. It cites XM's churn rate of 64% and SIRIUS' churn at 44% --primarily due to new care owners refusing to pay for continued service once the free trial runs out.
However, in a JULY 28 column in Hear 2.0, MARK RAMSEY took a different perspective: "One out of every two people who try something decide to subscribe at $13/month -- and this is viewed as bad news by the radio trades?" he wrote. "I doubt very much this is viewed as bad news by XM! Have you ever grabbed a free food sample in a supermarket? Have you purchased the product you sampled 50% of the time? Has it even been 25% of the time? 10%? ... Let me assure you in no uncertain terms that when one of every two samplers purchases the product they are sampling that is an outstanding conversion rate."
Churn debate notwithstanding, BRIDGE predicted a growth of 3.4 million subscribers to satellite radio in 2007, resulting in a total satellite radio audience of around 17 million.
HD In Trouble?
BRIDGE sent out warning signals to those who advocate HD radio, describing its growth as "the most disappointing highlight of this study" because interest has yet to "gain traction" in terms of sales growth. "Consumer awareness of HD radio continues to grow impressively, but consumer interest in owning or listening to HD radio continues to decline ... only 7% expressed that they are Very Interested in owning HD radio, down from 9% in JANUARY of 2007. "
Return To Terrestrial?
One potentially heartening sign for terrestrial radio interests is the notion that American youth are returning their interest in on-air radio. A 2006 consumer analysis first depicted signs of "a slow reversal of [young listener] attrition. "12-21 year olds were less likely in these 2006 studies to abandon terrestrial radio than they were in the 2004 studies." Why? Possibly because of "iPod fatigue" and a growing interest in terrestrial radio's Net broadcasts.
However, by parsing its conclusions carefully, the findings are not all that encouraging. Although a greater percentage of teens (16%, compared to 9%) are listening to terrestrial radio more and a decreasing percentage of teens (44%, down from 54%) are listening to radio less, the bottom line remains that almost three times as many teens are listening less than listening more. Reducing the rate of the teen audience erosion is hardly something to celebrate. Obviously, more work needs to be done in creating male teen-friendly content, in both music and programming -- if terrestrial radio is interested in reclaiming this oft-ignored audience.
Read the entire BRIDGE RATINGS study here.