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Sorry, Pandora - Radio Is Still Dominant And Growing
June 8, 2016
MARY BETH GARBER
Katz Media Group
At recent investor sessions, Pandora has been attempting to publicly challenge the strength and growth of America’s No. 1 consumer reach medium: broadcast radio.
But these claims ignore the volumes of studies that rely upon actual consumer behavior — metered or observed — that underscore why AM/FM radio should be a constant staple of the media mix.
Today, broadcast radio’s weekly reach among the entire U.S. population 18+ is 93%, and 92% with millennials, per Nielsen. The medium is the leading consumer reach medium, and the dominant source of audio usage and music discovery.
Let’s take a look at the facts.
*Despite usage of digital platforms, radio remains the No. 1 reach medium and dominant audio entertainment medium, reaching 93% of adults weekly. Broadcast radio stands alone as America’s constant companion, connecting with the community through local news, entertainment and personalities. Radio reaches four times as many people weekly as Pandora does monthly; radio’s share of audio listening is eight times greater.
*Radio’s daily time spent listening (TSL) among millennials has been strong and steady over the past several years, and is rising.
*Radio's Average Quarter-Hour ratings (AQH), or the average number of persons listening to a particular station for at least five minutes during a 15-minute period, is going up, especially in adults 18-34. A recent metered Nielsen study of radio usage in the 48 PPM markets that represent 52% of the country revealed that AQH ratings rose 10% year-over-year.
*Pandora recently claimed that people use streaming music sites to replace their radio listening. Not true. AM/FM radio has a firm grip on its listening audience with more than 9 out of 10 of them using radio every week, on the average of more than two hours a day, per a 2015 Scarborough report.
Time spent with personal music collections – primarily CDs and MP3 downloads – are shifting heavily to music streaming sites.
The broadcast radio experience is very different from that of personal music collections like playlists, and the two have always co-existed together.
Listeners have an emotional connection to their favorite station and its personalities, and rely on these personalities for news, sports, weather, traffic, community events, gossip – or products and services.
A music collection is a different experience. It’s where you curate music for your mood and escape from the world. But broadcast radio is used when listeners are ready to rejoin the world and tune back in to the social experience of radio.
It is much easier to use iHeartRadio, Spotify or Pandora to curate your music collection for you, which is why we have seen a steady decline in sales of CDs and downloaded music — and revenue from streaming sites continues to increase.
This is clearly demonstrated by the continued growth of iHeartRadio and Spotify, both of which outpace Pandora’s long-stunted growth. Streaming music listeners are not abandoning radio – more than 9 out of 10 of them use radio every week and, on the average, for more than 2 hours a day. Broadcast radio dwarfs the usage of Pandora in cars by 22 to 1, per Jacob’s Tech.
Radio continues to be the leading source of music discovery and closest partner of the music publishing world. A recent study by Jacobs Tech of over 40,000 radio listeners indicates that radio continues to rule as the primary and leading source of music discovery, as does a recent report from Nielsen 360’s music division.
Radio is personal — you can’t confuse 1:1 targetability with personal connection. One is a technical capability and, the other is an actual relationship, complete with relatable personalities who become listeners’ trusted friends — the friends listeners trust to sell them brands and products.
Radio is reliable, engaging, responsive and a direct connection to people in their local communities. Nothing can draw radio listeners away from their favorite radio stations and personalities. That is where they live, and, most importantly, where advertisers can truly connect.