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Digital Audio / Satellite Radio

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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 audio is an audio signal made by computers and digital devices that allows you to record and playback sound or music in digital form rather than in analog.

(Source: Reverb.com, How Does Digital Audio Work)

  • 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 192 million, representing 68% penetration of the U.S. 12+ population.
    • 86% of America's 12-34-year-olds listen online monthly

    • 76% of 35-54's are online listeners

    • The 55+ audience is slower to adopt, with just 42% penetration

(Source: The Infinite Dial 2020 - Edison Research/Triton Digital)

  • An estimated 60% of persons 12+ (estimated 169 million) tune in to online radio weekly
    • Weekly listening by P12+ over the past years have been substantial
      • 2012 @ 29%
      • 2013 @ 33%
      • 2014 @ 36%
      • 2015 @ 44%
      • 2016 @ 50%
      • 2017 @ 53%
      • 2018 @ 57%
      • 2019 @ 60%
      • 2020 @ 60%

(Source:The Infinite Dial 2020 – Edison Research/Triton Digital)

  • Digital radio continues to grow, partially as result of starting from a low base number, but also owing to adaptation among younger consumers and innovations in technology. Among pure-plays, growth is measured in sessions, not listeners like AM/FM radio.
  • In 2020, the average time spent listening to online audio is 15:12 minutes weekly compared to 13:40 minutes in 2018.

(Source: The Infinite Dial 2020 - Edison Research/Triton Digital)

  • 65% of A18+ stream audio through their smartphones while 24% of adults stream audio on their tablets each week.

(Source: The Nielsen Total Audience Report April 2020)

  • Number of paid audio streaming services that adults subscribe to
    • 1 - 38%
    • 2 - 15%
    • 3 - 5%
    • 4+ - 4%
    • None - 37%

(Source: The Nielsen Total Audience Report February 2020)

  • Influences of choosing an audio streaming service:
    • Ease of use, 78%
    • Variety/availabiliy of content, 72%
    • Cost compared to free alternatives, 64%
    • Quality of personalized content based on preferences, 61%
    • Availability across devices, 60%
    • Availability in car while driving, 56%
    • Quality of curated content available, 53%
  • Reasons to subscribe to additional audio streaming services
    • To acess on the go content, 39%
    • To acess content with little to no commercials, 39%
    • To expand content that I have available, 39%
    • To control playback of content, 33%
    • To listen on-demand on my own schedule, 31%
    • Flexibility of cancellation policy, 28%

(Source: The Nielsen Total Audience Report February 2020)

Smart Speakers / Voice

  • 24% of Americans 18+ (an estimated 60 million people), own a smart speaker.

(Source: The Smart Audio Report, Winter 2019)

  • Smart speaker adoption rates increase as awareness grows.
    • As of Dec. 2019, 84% of A18+ are aware of any smart speaker device.
    • 1 in 4 adults currently owns a smart speaker.
  • The number of households that have multiple speakers continues to grow.
    • As of Dec. 2019, U.S. households own an average if 2.6 smart speakers.
    • The number of smart speakers in U.S. households grew 135% from 67 million in 2017 to 157 million in 2019. 
  • Smart speaker owners are using their smart speakers frequently.
    • 33% of A18+ use their smart speaker several times a day.
    • 27% nearly every day
    • 21% at least once per week
    • 8% once per month or less
  • 54% of American adults have ever used voice commands.
    • Of these adults who have used voiced command, 24% use commands nearly every day.

(Source: The Smart Audio Report, Winter 2019)

  • Persons 13+ took the following actions with their smart speakers:
    • 46% streamed any audio
    • 24% streamed AM/FM radio
    • 10% streamed music that they own

(Source: The Smart Audio Report, Winter 2019)

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)

  • 212 million P12+ are familiar with audio podcasts
  • In 2020 - 55% of persons 12+ had ever listened to an audio podcast, an all-time high – increasing from 44% in 2018, 40% in 2017 and 36% in 2016

(Source: The Infinite Dial 2020 - Edison Research/Triton Digital)

  • Approximately 104 million (37%) of Americans reported listening to a podcast in the past month in 2020 – nearly double from 17% in 2015
    • 39% of men listened to a podcast in the last month while 36% of listeners were women.
    • 49% of America's 12-34-year olds listened to podcasts in the last month
    • 40% of adults 35-54 listened to podcasts last month while only 22% of adults 55+ listened.

(Source: The Infinite Dial 2020 - Edison Research/Triton Digital)

  • 68 million people or 24% of the population 12+ listened to a podcast in the last week.

(Source: The Infinite Dial 2020 - Edison Research/Triton Digital)

  • Podcast listeners listen to multiple podcasts each week - an average of 6 per week
    • Listen to 1 podcast per week - 11%
    • Listen to 2 podcasts weekly – 21%
    • Listen to 3 podcasts weekly – 19%
    • Listen to 4-5 podcasts weekly – 19%
    • Listen to 6-10 podcasts weekly – 18%
    • Listen to 11 or more podcasts weekly – 12%

(Source: The Infinite Dial 2020 - Edison Research/Triton Digital)

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
  • Satellite service claimed 34.55 million subscribers as of Q3 2019

(Source: SiriusXM Radio, 2019)


Digital Audio
  • Accessibility: Consumers like the ability to access streamed content 24/7, via an increasing variety of delivery platforms
  • Ease of Use: is a major factor in consumers' quick adaptation of streaming services, other digital audio.
  • Consumer Data: Digital audio platforms have a wealth of "big data" on their subscribers that can be used to help advertisers target specific consumers or segments.
  • Targeting: Targeted audio advertising can be inserted into live stream, enabling advertisers to target listeners based on user profiles, listening preferences, location, demographic and psychographic criteria and on specific devices; or to create custom segments based on listener data.
  • Trackable: Advertisers can immediately see impact of response to their advertising.
  • Mobility: In-Car listing via cellphone grew from 38% in 2017 to 45% of total 12+ in 2020.
  • (Source: The Infinite Dial 2020 – Edison Research/Triton Digital)
Satellite Radio Advantages
  • Availability: Consumers can access in their cars, as well as on many digital devices. Also available via many cable and satellite TV services
  • Drivers can access same programming anywhere: Has strong appeal to people who spend a lot of time in their vehicles, and especially those who drive long distances
  • Emulates AM/FM Radio: Wide variety of programming choices, with channels offering choices of music formats, on-air personalities, and news, talk and sports formats
  • Upscale: Nearly 44% of subscribers reside in households with $200K+ incomes, possibly an reflection of relatively high subscription fees
  • (Source: 2019 Doublebase GfK MRI )
  • Ad Acceptance: Although they pay a subscription fee, satellite listeners appear to tolerate commercials

Digital Audio
  • Awareness Outpaces Use:
    • Awareness of streaming services is high among the American public
      • 85% are aware of Pandora
      • iHeartRadio has 73% recognition
      • 72% are aware of Spotify
      • 71% know about Apple Music
      • AccuRadio and Deezer, the least-known services, have 10% and 6% awareness levels, respectively
        (Source: The Infinite Dial 2020 - Edison Research/Triton Digital )
  • Reliability: Consumers won't tolerate poorly designed interfaces or unreliable features and will switch quickly to alternative services
  • Lack on In-Vehicle Penetration: The majority of vehicles still don't have stereo systems that will accommodate a Smartphone or blue-tooth connection, limiting access to streaming services on the road
  • Cost: Access to services (or expanded functionality) may require payment of subscription fees
  • Resolution of ongoing legal issues regarding royalties for music aired on digital audio and satellite radio channels may lead those incur additional costs for their programming and ultimately result in passing those costs along to subscribers, or limiting music selections available
  • Increased Competition in Sector:  Pandora has been the early leader among digital services, but has experienced some erosion as competition with other services has heated up
  • Relatively Low Rate of Adaptation:  Consumers are not migrating en masse to digital. Consumers continue to tune into AM/FM radio as radio continues to deliver content across devises and platforms as well as on-demand
    Content Limitations: News and Sports content isn't widely available at this time, although music consumers also want access to information.
  • Privacy Issues: Perceived advantage through ability to track consumers may also prove to be a liability as government, consumer concerns regarding privacy increase.
  • Accountability: Online radio and music services do not have accredited audience measurement services in place.
  • Online audio channels/services compare the total audiences they claim against single AM/FM radio stations in any given market, making the claim that they are #1 in the market; rightly would need to aggregate all stations for broadcast groups within that market for a more accurate comparison.
  • Additionally, there is no way to determine duplication among "registered users," as many may have created multiple account to avoid reaching caps on free listening.
Satellite Radio Disadvantages
  • Low In-Car Use: Satellite radio touts its in-vehicle presence, but enjoys relatively low in-car use among consumers
  • SiriusXM claims 76% penetration of total new vehicle population
    • SiriusXM has only 37% penetration of the used car market
  • Availability doesn't translate to use
    • 24% of Adults 18+ who have driven or ridden in a car in the past month have ever used satellite radio in their primary vehicle
    • 12% of 18+ drivers/riders say the listen to satellite radio "almost all the time" or "most of the time" in car
      (Source: SiriusXM Investor Data; The Infinite Dial 2020 – Edison Research/Triton Digital)
  • Digital Music/Online Radio challenging satellite radio's in-car use:
  • AM/FM radio is nearly ubiquitous in vehicles of all ages – new or on the road for 10 years or more – and is available at no cost to the listener
  • Digital audio services such as Pandora, Spotify, etc. are challenging satellite radio's position as the in-car option to AM/FM radio.
    • SiriusXM has dipped a toe into the streaming audio waters as it has recently invested in Pandora.
    • Apple's CarPlay presents a challenge to satellite radio as it allows iPhone connectivity to the vehicle's dashboard for easier access to apps, music, phone calls, etc.
  • Monetary Investment: Hardware and/or subscription fees required to receive satellite radio contrast to free over-the-air radio
  • Resolution of ongoing legal issues regarding royalties for music aired on digital audio and satellite radio channels may lead those incur additional costs for their programming and ultimately result in passing those costs along to subscribers, or limiting music selections available

AM/FM Radio offers broad reach that will fill in the gaps of high percentages of the U.S. population not reached by alternative audio platforms.
  • Reaches 89% of the total U.S. 12+ population weekly, according to latest Nielsen Audio data
(Source: Nielsen Audio RADAR 144, March 2020 )
Traditional radio offers advertisers an established, audited audience ratings system (Nielsen Audio); online audio services make claims based on a variety of untested and questionable metrics.

Radio is the go-to source in weather events, emergencies: Consumers turn to AM/FM radio during emergencies and weather events when access to television and cable signals fails. FM chip-enabled smartphones also help to deliver information during these same emergencies.

Insures Exposure to Ad Messages: On AM/FM radio, everyone hears the same content (both programming and advertising) and advertisers run messages tied to specific content in specific time periods; customized online audio sites allow everyone to listen to their own individualized station, so there's no way to buy against specific content at a specific moment. Airing schedules on both AM/FM and digital/online and/or satellite insures that target audiences will be exposed to the advertiser message.

Radio has a high out-of-home presence, making it an optimal vehicle for retailers and other advertisers who need to reach the on-the-go consumer right before they shop:
  • Among Adults 18+ who have driven/ridden in a car in the past month
    • 81% have ever listened to AM/FM radio in their primary vehicle 
    • 41% have ever used owned a CD player in their primary vehicle
    • 48% have ever used owned digital music in their primary vehicle
    • 33% have ever listened to online radio
    • 24% have ever used satellite radio
    (Source: The Infinite Dial 2020 – Edison Research/Triton Digital)


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