Update: Tuesday September 14, 2010
Updated: September 20, 2010

There has been considerable interest in the growth of Internet radio listening in recent years, especially with the arrival of Internet Radio measurement company Ando Media.

Founded in 2004, Ando Media is the leading provider of real-time audience measurement and ads management solutions for the internet audio market.

With recent Bridge Ratings studies showing accelerating growth among Internet radio listeners of all ages, we were curious as to the growth as reflected in Ando Media's "Webcast Metrics" numbers which are generated real time by actual listening.

We took the "Webcast Metrics" figures from Ando Media's November 2009 release and compared them to those of June 2010.

The numbers reflected here represent Ando's "Average Active Sessions" metric which is a measure of the average number of streams of one minute or more that are active within a time period. The time period reflected in the following analysis is Monday through Friday 6am - 8pm.

I. Total Measured Listening

We chose to compare Average Active Sessions (AAS) because it represents the number of average simultaneous listening sessions that are occurring during a specific day part.

The following chart compares the total number of Average Active Sessions among the top 20 Internet radio stations as measured by Ando Media between November 2009 and June of 2010:

The total AAS of all the stations in November 2009 was just over seven-hundred-forty-two thousand. By June 2010, that number had grown by almost 25% to 916,193, a significant growth spurt in just eight months.

II. Terrestrial Simulcast Streams vs. Pure Play (Internet Only) Streams

As part of the Bridge Ratings analysis, we looked at each measurement period by isolating into two groups the total average active session numbers by those terrestrial radio stations that stream and those pure play, Internet-only, streaming stations. (A list of these stations appears at the end of this article.)

This chart shows the share of all the total AAS listening in November 2009. Terrestrial simulcast streams amounted to 65% of the total AAS listening (742,407) that month.

With 23% growth in Average Active Sessions between November 2009 and June 2010, the share of measured on-line listening changed quite a bit.....to a virtual 50/50 tie.

The pure play stations increased from 35% of the pie to 49% with Pandora increasing the most in the number of Average Active Sessions (251,066 to 418,933...+67%).

The trend is quite revealing. Literally all of the growth between November 2009 and June 2010 was due to the increase in listening among those pure play Internet stations that were measured by Ando.

Since the original publication of this analysis, Ando Media issued their July 2010 rankings. Based on this new data, Bridge Ratings published audience share trends representing November-June-July listening for Internet Pureplays:

...and Internet simulcast streams from terrestrial radio:

III. Consumers Speak Out

In a January 2010 Bridge Ratings analysis, on-line Internet radio listening was dominated by AM/FM radio simulcasts. The report found that 84% of the total on-line Internet radio listening group regularly listened to AM/FM simulcast streams in a typical week; 62% regularly listened to pure-play Internet radio streams.

The report showed that these two groups often listened to both types of streams but terrestrial streamers predominately spent most of their time with terrestrial simulcast streams and vice-versa.

In a follow-up study fielded for this special report, a change in behavior is underway. And based on behavior tracking through the first eight months of 2010, Bridge Ratings' proprietary predictive analysis suggests that without renewed programming and marketing strategies, terrestrial Internet stream audiences will continue to decline through 2014.

Satisfaction levels among AM/FM simulcast streamers has plummeted overall as Internet-only or Pure Play Internet radio stations, led by Pandora, are gathering momentum as primary listening posts for Internet radio listeners in general.

A March 2010 Bridge Ratings study focused on Streamies perceptions and found that almost half of those interviewed were spending more time with Internet radio than they were six months previous.

Clearly this new study reflects a changing landscape. We wanted to know why current Internet radio consumers have been listening less to terrestrial simulcasts on-line and why they are projecting continued reduction in listening unless listening options change.

Bridge Ratings' latest projections based on these interviews. If terrestrially delivered content opportunities don't change AM/FM simulcast primaries (those who spend more of their on-line time listening to terrestrial simulcast content) will shrink to 50% by 2014.

Internet Pure Play stations are gaining in the all-important at-work location where the significant consumption of on-line radio takes place.

IV. The Why

Our panel of 2771 persons prefer the ability to customize their content. It's a fact of Internet-life. And this translates to Internet-delivered entertainment as it does for most Internet activities.

Nearly 80% of those questioned, say they listen to less terrestrial simulcasts are doing so because they can customize with Pure Play Internet radio options.

"Too many commercials" ranked second.

Epilogue

The Internet has proven its ability to rapidly move and change consumer tastes and preferences. The technology simply makes decision-making easier. Consumers are smarter than ever due to their interactions on the Internet. Nowhere is this more evident than in on-line radio listening.

As recently as January of 2010, our studies reflected a positive perception among consumers of terrestrial radio on-line simulcasts. Yet, as the year has unfolded, Pure Play Internet radio listening has out-paced terrestrial radio primarily on the back of Pandora.

Online measurement firm Ando Media confirms this growth without a doubt when analyzing Ando's Average Active Sessions (AAS) from November 2009 and June 2010. Future Ando reports will no doubt include additional Pure Play radio networks.

Why is Pure Play greatly outpacing terrestrially-delivered on-line radio listening?

Terrestrial radio companies have still not committed to the concept of differentiating their on-line content product from their terrestrial streams. Unique program opportunities exist for traditional radio on-line, yet few companies are taking the initiative to pursue these opportunities.

Perhaps it has to do with the fact that program directors of traditional stations don't have the time or ability to devote to proactive content development.

Ando Media's Chief Operating Officer, Paul Krasinski offers three reasons why Pure Play has the advantage:

1. The user content experience is better.

2. Pure Play streaming networks understand their audience better and they have the ability to target those listeners effectively for advertisers.

3. Pricing discipline. Pure Play operators understand both the realities and potential of on-line ad pricing.

"Is Traditional Radio Ready for a Digital Future?" The Bridge Ratings' study from June 2010 asked this question of 252 radio market managers. The result of that study was that despite the fact that terrestrial radio has access to the assets required to be prepared for their digital future, many companies are not investing in the personnel and infrastructure needed.

This follow-up study unveils the urgency which traditional radio must approach its digital future if it is to be positioned to take advantage of the increasing on-line advertising potential.

The following internet radio stations were measured by Ando Media and used to produce this report:

Terrestrial Simulcast Streaming Stations: CBS Radio, Clear Channel Radio, Citadel Broadcasting, ESPN Radio, Entercom Communications, Cox Radio, EMF Corporate, Radio One, Bonneville Broadcasting, Emmis Communications, Salem Communications, Univision, WNYC Radio, Saga Communications, Beasley Broadcasting, ICBC Holdings, Journal Broadcast Group, Lincoln Financial, Entravision,

Pure Play Streaming Stations: Pandora, Digitally Imported, 977 Music.com, AccuRadio, I.FM Corporate.