Types of Radio

Digital Audio / Satellite Radio

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.
(Source: IAB – Internet Advertising Bureau)
  • 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.
(Source: Media Review: Music Streaming Services Market Profile – Clearvoiceresearch, May 2014)
  • 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 143 million, representing 53% penetration of the U.S. 12+ population
    • Tune-in increased from 17% in 2003 (first year recorded) to 27% in 2009 and 2010
    • Incremental reach increases over past 5 years have been substantial
      • 2011 @ 34%
      • 2012 @ 39%
      • 2013 @ 45%
      • 2014 @ 47%
      • 2015 @ 53%
    • 77% of America’s 12-24 year-olds listen online monthly
    • 61% of 25-54’s are online listeners
    • The 55+ audience is slower to adopt, with just over 1/4 (26%) penetration
  • An estimated 44% of persons 12+ (estimated 119 million) tune in to online radio weekly
(Source: The Infinite Dial 2015 – Edison Research/Triton Digital)
  • Digital radio growing by double-digit percentages annually, partially as result of starting from a low base number, but also owing to adaptation among younger consumers. Growth is measured in, not listeners like AM/FM radio.
(Source: Triton Digital, 1/15)
  • On-demand streaming audio of music grew 60% in 2014 to a record 78.6 billion streams
  • 67% of music consumers listen to music online through any form of streaming in a typical week
(Source: 2014 Nielsen Music U.S. Report – year-end report – 1/15)
  • Music is the most popular content type on digital radio, but spoken word programming saw strong growth in 2014, especially on podcasts.
(Source: Triton Digital, 1/15)
  • The Internet audio pie is continually growing with increasing completion across platforms and contexts
    • Leading services flourishing
    • No evidence any one is growing at another’s expense, to date
    • AM/FM radio streams comprise an important element of online radio usage
(Source: The Infinite Dial 2015 – Edison Research/Triton Digital)
  • Streaming service users don’t seem to be strongly influenced by either price or presence of advertising
    • Most services are comparable on both counts
    • Unless service configurations changed dramatically, incremental price or ad increases would be tolerated by the majority of users

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.
(Source: About.com)
  • In 2014, 33% of persons 12+ had ever listened to an audio podcast, an all-time high – increasing from 11% in 2006, 23% in 2010%, 30% in 2014
  • Approximately 46 million (17%) of Americans reported listening to a podcast in the past month in 2015 – up from 9% in 2008
  • The majority of podcast listeners listen to multiple podcasts each week, with 1 in 5 consuming 6+ weekly
    • Listen to 1 podcast per week - 14%
    • Listen to 2 podcasts weekly – 22%
    • Listen to 3 podcasts weekly – 23%
    • Listen to 4-5 podcasts weekly – 17%
    • Listen to 6-10 podcasts weekly – 9%
    • Listen to 11 podcasts weekly – 15%
(Source: The Infinite Dial 2015 - Edison Research/Triton Digital)
  • 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
      • 2013 – 63%
      • 2014 – 46%
      • 2015 - 42%
    • Access podcasts via smartphone/tablet/portable audio player
      • 2013 – 34%
      • 2014 – 51%
      • 2015 - 55%
(Source: The Infinite Dial 2015 – Edison Research/Triton Digital)
  • Streamed audio not seen as replacing AM/FM radio or satellite radio listening – streaming music services represent more of a format shift in music libraries, similar from the move from records to CDs or from CDs to digital downloads – a different way to distribute a personal music library
(Source: David Frear, SiriusXM CFO at Citi Media Conference, 1/15)

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
      • Historically, 55% of paid promotional subscribers do not convert to self-paying when the initial subscription expires
      • 75% of self-pay subscribers stay with the service
(Source: Seeking Alpha, 2013)
  • Satellite service claimed 27.3 million subscribers as of Q4 2014
    • Added 1.75 million net new subscribers in 2014 to data
    • Added half a million net new subscribers during fourth quarter 2014 - the largest number for any quarter since 2007
(Source: SiriusXM Q4 2014 Investor Report)
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