Internet Radio – Closing in on Traditional Music Listening

by: Angela Moscaritolo

SFHH Logo 250X250A whopping 96 million individuals — or about 50 percent of the U.S. Internet population aged 13 and older — listened to an Internet radio or on-demand music service in the past three months, according to new data from The NPD Group.

More than a third (37 percent) of U.S. Internet users jammed out to music on Pandora and other Internet radio services, while nearly the same amount (36 percent) fired up an on-demand music service like YouTube, Vevo, Spotify, Mog, Rhapsody, or Rdio. The popularity and convenience of Internet radio appears to be cutting into traditional music listening.

Since 2009, the percentage of Pandora users who listened to an AM/FM radio declined by 10 percentage points. During the same period, CD listening fell 21 percentage points, while listening to digital music files on portable music players also dropped 21 points.

“Although AM/FM radio remains America’s favorite music-listening choice, the basket of Internet radio and streaming services that are available today have, on the whole, replaced CDs for second place,” Russ Crupnick, senior vice president of industry analysis at NPD, said in a statement. “We expect this pattern to continue, as consumers become more comfortable with ownership defined as a playlist, rather than as a physical CD or digital file.”

The decline in radio and CD listening can partially be attributed to the fact that 34 percent of Pandora users now listen to the service in their car, NPD said. Moreover, among YouTube and Vevo users, who skew younger, CD listening on players and in cars dropped 22 percentage points, while listening to digital files on portable players declined 17 points, and radio listening fell 12 points.

Pandora filed suit

Services like Pandora, Vevo, and YouTube are also helping music lovers discover new songs or rediscover stuff they forgot about, according to NPD. Sixty-four percent of users reported rediscovering older music while 51 percent learned about new music.

“AM/FM radio has traditionally played a significant role in helping consumers learn about new music from well known artists, as well as finding new ones; however, Pandora and other music services are an increasingly important part of the music-discovery process,” Crupnick said.

The future of Internet radio services were called into question earlier this week, however, when Pandora filed suit against the American Society of Composers, Authors and Publishers (ASCAP) over what it considers to be exorbitantly high royalty rates.

For more from Angela, follow her on Twitter @amoscaritolo.

NPD internet radio

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