On-Line Listening Growth Anemic. Maybe Even Declining.

The latest on-line radio ratings raise serious questions about the future of digital radio.

Aside from a couple of exceptions, on-line listening growth is at best anemic, and in some cases even declining.

Broadcast groups that are betting everything on streaming and an app may be making a very bad bet.

In 2010 Radio Insights introduced Hours-Tuned in order to create a metric that would enable the industry to compare broadcast and streaming listening levels. Hours-Tuned tells us how many hours of listening a station attracts.

Think of it as a measure of the total “consumption” of a radio service.

Hours-Tuned illustrates the fact that when it comes to on-line radio, there’s Pandora and then there’s everyone else.

Pandora alone makes up 75% of listening reported by Triton Digital. Not only does Pandora dominate Triton ratings, the service’s share is increasing, up from 66% a year ago.

But even Pandora’s growth is slowing. The first graph at left shows the monthly year-over-year percent change in Hours-Tuned for Pandora.

After six months of triple digit growth, Pandora growth has dropped precipitously. It’s still considerably higher than most other services, but well off the pace of earlier this year.

On top of that, Pandora is one tide that isn’t lifting any other boats.

The second graph better illustrates what’s happening at many streaming services.

After fourteen months of slow steady growth, AccuRadio went into reverse, losing total hours.

For seven months now, year-over-year Hours-Tuned comparisons have been negative, with the decline accelerating. (Note the difference in scale compared to the Pandora graph.)

Even a brand like ESPN isn’t immune from this trend.

The ESPN graph below isn’t pretty, with twelve of the last 16 months showing negative growth in consumption of ESPN streaming.

Clear Channel is the best performing broadcast group, but it too is showing decelerating growth. It’s growth rate is similar to Pandora’s but with a fraction of its total hours of listening.

Total Hours-Tuned for the top twenty streaming services has increased 54.5% in the past year, but most of this is Pandora.

If we take Pandora out of the picture, streaming hours have only increased 11.9%, not exactly robust growth.

Terrestrial groups have grown 8.3% in the past year, but this too is distorted by one outlier, Clear Channel. Take Clear Channel out, and terrestrial radio stream listening has declined 24%.

One of the problems in analyzing long term Triton Digital trends is the many changes that have taken place within services.

For example, CBS numbers included AOL listening until AOL moved to Slacker. The move led to an immediate decline in CBS numbers, and a gain for Slacker. Since then CBS has added Yahoo.

Interestingly, the combined listening of CBS and Slacker today is 28.4% lower than a year ago.

The September change in Hours-Tuned for several groups are summarized at the left. The numbers do vary somewhat from month to month, so the numbers might be different next month but the trend is unmistakable.

Aside from Pandora and Clear Channel, on-line listening growth is at best anemic, and perhaps even declining.

When we recently noted the precipitous decline in on-line listening spans, new-media pundits and stakeholders rose up to challenge the numbers.

One declared:

In fact, while ATSL is declining as people migrate to mobile, their number of SESSIONS per week is increasing at a FASTER rate, so that total Internet radio listening hours per consumer per week (or per month) -- i.e., TSL -- is INCREASING, not decreasing.

It sounds reasonable, but it isn’t true.

Hours-Tuned takes into account both ATSL (time per session) and Sessions, and total hours are declining for many services.

Pandora and Clear Channel are both growing, but over-all listening growth is slowing, and some services are declining.

The rosy new-media narrative of nearly infinite Internet radio potential might sound great, but the numbers paint a very different picture.

Streaming is becoming a game with many more losers than winners.

Pundits like to point to Pandora and its death-defying success story as proof of Internet radio’s inevitable dominance.

But we heard similar stories about on-line gaming and daily deals.

Is Pandora another Zynga or Groupon? These are each category leaders with what seemed like limitless possibilities.

Now Zynga is a $2 stock (down 88%) and Groupon is a $3 stock (down 89%). Meanwhile Pandora has fallen to $8, a 60% decline.

Are the declines in listening just confirming what Wall Street has already figured out?

Comments

[Guest]

Almost across the board, large and small, our digital traffic is up significantly this year as in over 30% up.

I'm not sure what constitutes the measurement here but Triton did change their definition of a session and that could impact this number is a negative way.

Regardless, our customers, even the small ones, are seeing an increase in traffic this year (and every year).

[Richard Harker]

Good point. One unfortunate aspect of Triton Digital ratings is that we know only the ratings of the top 20 services. That's why we refer to the numbers as "reported." Given the rapid fall-off in both AAS and SS even within the top 20, it is safe to conclude the rest of Triton's clients have minimal ratings. In September WNYC, the 20th ranked service, had only 7,155 average active sessions, and 1.3 million session starts. That's considerably less than half of what the 10th ranked service had, and less than one-half percent of Pandora. If the unreported portion amounts to 20% of total listening, there must be many services with extremely small audiences.

[Mary Beth Garber]

Interesting perspective and good stats except for one. Pandora is not 75% of the streaming sites reported by Triton. Only the top 20 sites appear in Triton's public ranker, which is why some appear in one report but not the next. The unpublished group amount to something in the vicinity of 20% of total listening reported by Triton. So P's share is closer to 60% of the reported streamers and who knows what of all the unreported sites including Spotify, Rdio and Lastfm. Just for the record.