Web radio audience surges to 86 million.

Story by Inside Radio

Fueled by the rise of smartphones, the online radio audience has been growing steadily since 2010. One in three Americans aged 12 and older now listen to some form of online radio on a weekly basis, an estimated 86 million people. But the vast majority of online radio listeners (8 in 10) also listen weekly to AM/FM radio while 2 in 10 (or 15.5 million) do not.

Like Triton Digital’s server-side listening data, the new Arbitron-Edison Research Infinite Dial survey shows Pandora continuing on an upward trajectory: one in five Americans said they listened to the web pureplay last week, up from 16% one year earlier. But the survey also shows iHeartRadio catching up — at least in terms of awareness. Clear Channel’s all-in-one web radio service showed a significant year-over-year increase in awareness, growing from one-third of Americans last year to 45% this year, putting it closer to Pandora’s awareness level (69%). There’s a larger gap between the two in app downloads: nearly half of smartphone owners have downloaded the Pandora app versus 15% for iHeart, 9% for an AM/FM station app and 6% for Spotify.

“Online radio is on a roll, and it’s attracting new competitors in addition to new listeners,” Arbitron SVP of marketing Bill Rose says. “It’s crucial to have a strategy to cut through the clutter and make it easy for the audience to find you online.” In addition to promoting their digital platforms on-air, Rose says broadcasters may want to consider cross-promoting their digital content on commonly-owned stations, such as sister stations in a market cluster.

Arbitron and Edison Research didn’t break out web radio listening by age groups in their new survey but a new study by NPD Group shines a light on the demographics of streaming audio listening. Free and subscription-based internet radio services accounted for 23% of the average weekly music listening time for consumers aged 13-35 in the fourth quarter, the market research firm reports. That’s up from a market share of 17% the previous year. AM/FM radio maintained a razor-thin lead in the demo, grabbing 24% of music-listening time, down by 2 percentage points. Broadcast radio occupies a more dominant position in the 36+ demo with a 41% share versus 13% for internet radio.

“Driven by mobility and connectivity, music-streaming services are rapidly growing their share of the music listening experience for teens and young adults, at the expense of traditional music listening methods,” NPD SVP of industry analysis Russ Crupnick says. So who’s winning the web radio war so far? Four in ten respondents aged 13-35 report using Pandora, compared to one in ten for iHeartRadio and one in ten for the free version of Spotify.