“So can we call Internet radio mainstream yet?” The question, recently posed by an internet radio supporter, is an interesting one. Has internet radio become mainstream?
Maybe one day, but it looks a long ways off.
Internet radio claims to be the future of radio. According to its supporters, one day soon few people will be listening to traditional radio. They will be listening to new personalized streams of Internet companies like Pandora, Slacker, and others yet to be created.
The gold standard then is broadcast radio. If the goal is to replace broadcast radio, then Internet radio should be measured against broadcast radio.
The comparison is somewhat complicated by the fact that internet and broadcast radio ratings are not directly comparable. Internet radio measurement counts IP addresses and reports things like sessions, while broadcast radio measurement counts listeners and reports things like quarter-hours.
Fortunately, with a little math, the two can be compared. In a June post we showed that both broadcast and online ratings can be converted into Hours-Tuned, a metric that tells us how many hours people spend “consuming” radio.
For example, people in just New York and Los Angeles consume about 334 million hours a week listening to local radio stations in the two markets. Nearly half of the hours are spent listening to just the top 20 radio stations.
The latest national Arbitron estimate puts total broadcast consumption at over 3.5 billion hours a week.
How does that compare to Internet services?
The top 20 Internet streams generate 377 million hours of consumption. The number is somewhat misleading, however. Over 200 million of those hours go to Pandora alone.
This means that the consumption of broadcast radio in just two markets nearly equals the national consumption of the top 20 Internet radio services even when we include Pandora. Back out Pandora and New York broadcast consumption alone is greater than the remaining national Internet services.
There’s really no comparison between broadcast listening and Internet listening. For example, consumption of just the Clear Channel stations in New York exceeds the total national Clear Channel streaming consumption.
Nine New York broadcast stations have greater hours-tuned than Slacker’s national numbers.
Were it not for Pandora, Internet radio would barely exist. The graph above shows weekly consumption in millions of hours according to Ando Media’s July domestic full week ranker. For scale, we’ve included the leading station in New York and Los Angeles (in bright red) for comparison. (Click to enlarge.)
So can we call internet radio mainstream yet?
For a business that hopes one day to be broadcast’s successor, Internet radio is falling well short of being a serious threat. Yes, Pandora is a phenom, but its success is the exception, not the rule.
There are no other break-out successes that suggest Internet radio has gone mainstream. Maybe one day, but not this day.