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Bridge Ratings Audience Erosion Study 2006 - Q2 Update

 

For Immediate Release:

Friday April 7, 2006

Where Are My Listeners Going?

In November, 2004, Bridge Ratings & Research released initial results from a multi-year-long Audience Attrition project. The results in that report reflected audience erosion from terrestrial radio due to generally less time spent with AM/FM radio and more time spent with a variety of digital media, including MP3 players (including iPods), Internet radio, satellite radio and Compact Disc.

As part of Bridge Ratings’ on-going studies of radio listening behavior, the company updated the report in March 2005 by releasing the 2004 full-year trending from its Audience Attrition project as well as initial findings from January/February, 2005 and the third quarter of 2005.

This study, which has been tracking such behavior since January, 2004, once again reveals behaviors we have assumed are taking place, but heretofore have not had clinical results to confirm. This on-going project is intended to track radio audience migration over time in order to better understand the ebb and flow of listener preference.

Traditional Media Erosion to New Media - Update

Where Does the TSL Come From? - Update

Increased Use of Traditional Radio Due to...

After a recovering Quarter 4 of 2005 for terrestrial radio where positive signs that terrestrial radio was experiencing positive Time Spent Listening and Weekly cume audience tune-in, the first quarter of 2006 showed just the opposite in overall listener behavior.

AM/FM radio listening among 18-34 year olds was significantly off fourth quarter 2005's pace as its increase in weekly quarter hours to "other media" than radio jumped from 50 to 60 quarter hours affecting the trend for both 12-24 and 25-49 year old metrics.

Other updated findings include:

1. Terrestrial audience erosion to alternative audio entertainment continues to occur in young demographics.

2. Podcasting is beginning to siphon listening.

3. MP3 device usage can consume as much as 80% of a radio user's audio entertainment during initial ownership weeks and months. This number tends to be generally lower among 30+ women and 35+ men.

4. MP3 player fatigue is slowing overall as the market continues to expand due to consumer interest in these devices. Fatigue with MP3 players remains high among those consumers who have owned the devices longer than 6-8 months.

5. Competition for traditional radio time-spent-listening is more severe. Time spent listening to terrestrial radio is fighting for its share of time with a multitude of digital devices. Even television has regained viewership based on this quarter's data. The most often given reason for this by our sample: better programming and new shows. Meanwhile, music-specific radio stations are vying for the attention of their constituencies as MP3 players continue to be more pervasive than ever (75 million sold). Podcasting is beginning to show evidence of cannibalizing radio's time-spent-listening.

6. Satellite radio also suffers from attrition! For the first time, we are seeing satelite radio consumers who have been subscribers for longer than 6 months are actually spending less time than they were six months ago with their satellite service of choice. According to our panel, during the second quarter of 2005 average time spent listening to satellite radio was 16 hours per week. During this most recent study during the period of January 1 through March 31, 2006, weekly TSL for satellite radio among subscribers of 6 months or longer was down to 12.6 weekly hours.

Methodology. Bridge Ratings measures CUME SHARE and FAVORITENESS rather than CUME and Average Quarter Hours.  AQH is a fabricated mathematical measurement of cume x an average quarter hour number composed of 'best guesses' by diary keepers.  Thus, the AQH number tells a station or its client nothing about the capability of the station to deliver listeners.

FAVORITENESS is a better measurement of loyalty especially when combined with the Cume number. The cume number divided by the favoriteness number yields a conversion number which more accurately measures station loyalty.  In Bridge Ratings studies, stations that convert their cume audience to favoriteness at the rate of 40% or more are powerful instruments in their communities. This is powerful information for both station and advertisers alike.

For the “Erosion Studies”, Bridge Ratings selected 6000 persons over six national markets to be interviewed on a weekly basis regarding the listener’s use of AM/FM radio and, where applicable, their use of digital media players, Internet Radio, CD’s, Podcasting or satellite radio. Questionnaires were structured to seek overall daily use of the aforementioned media with short recall requirements.

The results represent the multi-market sample’s behavior and reflects quarter hours of usage per week.

             Chart 1

Traditional Radio Audience Erosion to New Media    

Number of weekly quarter hours listened or used     

Demo Qtr 3 '04 Qtr 4 '04 Qtr 1 '05 Qtr 3 '05 Qtr 4 '05 Qtr 1 '06
 
Radio/Other
Radio/Other
Radio/Other
Radio/Other
Radio/Other Radio/Other
12-24
62 / 55
54/64
53 /65
53 /67
56/65
51/70
25-49 A
66 /39
65/43
64 / 44
64 / 48
67/46
60/60
35-64 A
76 / 20
70/22
73 / 22
75 / 25
73/27
69/35

         

How to read: In the above chart, during quarter 4 of 2005, 25-49 year olds surveyed were spending 67 quarter hours per week with traditional radio (AM/FM) and 46 quarter hours per week with alternative media. During quarter 1, 2006, traditional radio usage among this group decreased to 60 quarter hours per week while their use of alternative media increased slightly to 60 quarter hours.

Where Does the Time Come From?

Looking at other media use among 25-49 year olds, daily use of television continued its increases from 2005 with the average U.S. adult spending 5 hours a day viewing television programming. This figure is being impacted by a proliferation of out-of-home TV viewing acknowledged by our sample. Restaurants, bars, sporting events and even grocery stores are credited with out-of-home viewing minutes.

Internet use was back up last quarter (+18%), listening to recorded music was up 10 minutes per week overall and reading books and magazines also saw a slight dip.

Chart 2

Time Spent with Media Activities per day
Demo Adults 25-49 Qtr 4 '04 Qtr 3 '05 Qtr 4 '05 Qtr 1 '06
Television
3.6 hrs
4.1 hrs
4.5 hrs
5.0 hrs
Internet
62 mins
60 mins
55 mins
65 mins
Recorded Music
42 mins
37 mins
40 mins
50 mins
Books & Magazines
30 mins
25 mins
27 mins
23 mins

Bottom Line

During the quarter 1 2006 study, Bridge Ratings attempted to learn why these latest findings indicate that time spent with traditional radio has slumped again. When participants in the study responded they were listening to AM/FM radio less than they were three months ago, the following were results of asking "why":

Chart 3

Decreased Use of Traditional Radio Due to...
  12-24 25-49 35-64
More Cell Phone Use 10% 16% 14%
MP3 Use
27%
22%
18%
Satellite Radio
2%
3%
2%
Radio programming is "Same old-Same Old"
22%
17%
31%
Podcast Listening
3%
3%
2%
Activity Related*
25%
19%
23%
More Time on Computer
6%
15%
5%
Other
5%
5%
4%

*Behavior or listening locations changed, i.e. more time in-car/more listening in-office.

An update of data collected during Q2 2006 will be released by Bridge Ratings the first week of July 2006.

For additional information, contact Dave Van Dyke at 818.291.6420.

Markets measured: Los Angeles, Phoenix, Chicago, Nashville, Boston, West Palm Beach

Sample size: 6000 persons 12+. Sample error: +/- 1.2%

Bridge Ratings is a ratings and research company based in Glendale, California. We are dedicated to providing on-going, immediate, reliable, useable and affordable audience measurement services for the radio industry. Our methodology is based on sound consumer research principles. We are in the business of tracking listeners - not listening. Because we are a true research company we offer flexibility

 


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