Bridge Ratings has been observing the increasing media competitive landscape since 1999 when music sharing service Napster first enabled fans of music to share music files without cost. The great music "goldrush" began and the "genie" has never returned to the bottle.
With this update we have included podcasting.
Music sharing and free music streaming are common these days. More than 80% of Americans stream music of any variety each month and Bridge Ratings is projecting that by the end of summer 2020 that number will jump to 88%.
Since 1999 broadcast radio has faced an unending array of new media, each competing for entertainment time from a medium that virtually had the music listening experience to itself. Aside from CD players and cassette players, broadcast radio had the playing field to itself until satellite radio was introduced in 2001.
Internet radio followed shortly thereafter.
Satellite radio, Internet radio, MP3s, mobile phones, social networks, music downloads, iTunes, on-demand streaming, Pandora and Spotify.
2017 brought a significant increase in voice-activated assistants such as Amazon's Echo and Google Home. With Apple's HomePod added in 2018, consumer purchase and use of these devices is growing exponentially with nearly 20% of U.S. homes using one or more of these units to get audio information (news, weather, sports, stocks), shopping, music and much more.
We are forecasting that these smart devices like the Amazon Echo, Google Home and Sonos One will be installed in a majority – that is, 52 percent – of U.S. households by the year 2022. By that time, over 70 million households will have at least one of these smart speakers in their home, and the total number of installed devices will top 175 million.
This new forecast follows other reports pointing to growth in the voice-enabled speaker market, including one from eMarketer which said that 35.6 million U.S. consumers would use a voice-activated device at least once per month in 2017, representing 128.9 percent growth over last year.
Despite the increased adoption of smart speakers with voice control capabilities, the new data points out that the majority of voice assistant usage won’t be through these in-home devices. Instead, the most usage will occur on smartphones, with over 5 billion assistants installed on smartphones worldwide by 2022.
This analysis of radio's run through the technology gauntlet over the past 16 years reveals the specific moments in time when new media had its greatest impact on radio listening. A variety of problems plagued the radio industry during this term including an economic breakdown which began in 2000, worsened in the fall of 2001 and created an operational upheaval starting in 2009.
Listener apathy also has played its part as sharing of music files in the early 2000s boosted the sexy new tech of MP3 players on the young end, while satellite radio's effective marketing blitz -- spearheaded by XM in 2002-03 -- painted satellite technology as the next generation of radio. Adults have been more apt to adopt this technology. Satellite radio's strong two-year consumer love affair seemed to overshadowed traditional radio in those years as the radio industry searched for revenue solutions that weren't necessarily linked to improving programming content.
Broadcast radio has plowed through this media "gauntlet" for the first sixteen years of this century. And continuing technology disruption hasn't let up.
Bridge Ratings continues to track the impact of all of this audio as it has affected radio's share of time spent listening.
From the perspective of a seventeen year hindsight view, the trends become clear. Broadcast radio sees weekly (cume) use remain fairly stable but time spent with radio quite naturally has been chipped away but partially stabilized in 2017. - Dave Van Dyke, Bridge Ratings
While there are numerous new media options siphoning listening/favoriteness from radio, the charts here reflect consumer preference for a select group of media options:
- Radio Cume - Percentage of Americans that listen to broadcast radio each week for at least 15 minutes
- Radio Favorite - Percentage of listeners who consider radio as their favorite or "first choice" for music. This metric closely correlates to how much time is spent with that medium. The "favorite" trend-line for broadcast radio began significant decline between 2010 and 2014.
- Index - The relationship between radio's weekly cume and it's "favoriteness". Weekly cume for broadcast radio remains fairly steady but will see accelerated deterioration going forward as additional entertainment options present themselves to the American public. Since "favoriteness" is declining at a faster rate, the index relationship between the two increases. It stabilizes at .64 - considerably less than in the '90s and early 2000s.
- Downloads Favorite - Music download preference. With the increasing popularity of on-line music streaming, even downloading music files peaked in 2014 as evidenced in its growth curve.
- Streaming Favorite- A significant growth curve as adoption surpasses 70% of Americans. Use will continue to grow as the "favorite" metric for technology for consuming music increases.
- Podcasting Cume & Favorite - Podcasting is experiencing a boom in 2017 in both usage and the potential for advertising dollars spent. The Gauntlet chart tracks both the number of different people who listen to at least one podcast a month (cumulative audience) as well as "favoriteness".
If you have been following Bridge Ratings studies for a number of years, you're familiar with the word we use to define radio station primary listeners. The term "Favoriteness" is used in our interviews when we ask listeners to tell us the "radio station they listen to most, the one they consider their favorite."
Favoriteness is closely related to radio station passion because these are the listeners who spend the most time with that specific station.
Favoriteness also is closely related to time-spent-listening which is how long a listener will spend with a particular station during each occasion of listening.
This update to the New Media Gauntlet Study shows the increasing "favoriteness" of music streaming and its potential in coming years.
Interesting to note that music downloads had significant "favoriteness" growth starting in 2007 about the same time that music streaming was gaining momentum. However, as the music consumer discovered the advantages of and low-cost of music streaming, paying for individual digital song downloads began to be questioned.
According the Gauntlet trends (see chart) digital download favoriteness leveled off by 2013 as music streaming consumption, fueled by platforms like Pandora and Spotify, assumed much of the passion formerly felt for downloads.
The trends are clear and from this long-range perspective broadcast radio may have missed its opportunity to take advantage of the available technology to transition listeners seeking different ways to consume music. According to a recent Bridge Ratings study, creation of alternative pure-play internet radio stations by broadcasters could have and can still capture listening that has funneled to internet radio.
For the first time in the seventeen years Bridge Ratings has been trending data for the "New Media Gauntlet", we have enough historical data to show how the siphoning effect of all the new media options has impacted broadcast radio Favoriteness.
In our annual "New Media Gauntlet" studies, we always have asked the question "What is your favorite _____, the one you spend the most time with each week?" seeking to know specifics about consumption of individual entertainment platforms.
Over the course of these studies, we have learned that "favoriteness" correlates closely to the time-spent-listening metric used in audio consumption.
The chart above reflects the change in broadcast radio "favoriteness" between 2001 when we started these studies through 2017 with projections to 2019. By our estimates, broadcast radio has thus far seen a 33% attrition of favoriteness in that time. 30% of the attrition has been attributed to on-line music streaming, which includes internet on-demand services like Spotify and YouTube. Internet Radio accounted for 15% attrition. This includes non interactive services like Pandora and AM/FM simulcasts. While less than 2% of the attrition can be attributed to AM/FM simulcast streams, we felt it was important to include that in the Internet Radio category.
in the current 2017 edition of the "New Media Gauntlet" study, Music downloads are less likely to impact time-spent listening and now account for 8% of the attrition in broadcast radio "favoriteness".
How have these sources of favoriteness-siphoning changed over time? The following chart reflects the differences between 2007 and 2017.
The information here has reflected Total audience behavior. The results are striking. Yet the degree to which radio "favoriteness" and streaming "favoriteness" have changed is more evident when seen from younger consumers, 18-34 year old adults.
Trend lines are further exaggerated with this age group which often cannot provide a reply to the survey question "What is your favorite radio station, the one you listen to most?" Few have a favorite they can name.
Music download interest has flattened out remain having plateaued by the end of 2013 while streaming continues to provide a much greater satisfaction for this life group.
More Contenders for Our Time
Music sharing has experienced the most reduction in siphoning "favoriteness" from broadcast radio over the last eight years while Music Streaming's growing popularity is obvious.
With Nielsen's latest (mid-2017) analysis of music consumption, on-demand streaming use for the first half of 2017 continues to rise with no end in sight.
Streaming, podcasting, song downloads, satellite radio, social networking, broadcast radio and internet radio are among the many entertainment options available to the average consumer. No doubt more will be added to this list as technology advances.
The popularity of broadcast radio remains high when one looks at the number of people the medium reaches. With 91% of the U.S. population reached each week by radio, it stands as the medium with the greatest ability to reach consumers - above TV (76%). This consistent performance is evident when looking at the Gauntlet graphic above. And while this is a positive attribute, the pie of time-spent with media continues to be fractionalized.
The "New Media Gauntlet" better reflects the totality of broadcast radio's competition for consumers' time and graphically represents the distractions with which the radio medium has had to contend.
Bridge Ratings updates this data every two years with the next update due in 2019.
A panel of 4020 persons 12 years of age and older were interviewed for this update on radio’s digital gauntlet. Each person on the panel met the following criteria: currently listened to broadcast radio at least 30 minutes per week, and also downloaded music and consumed music through streaming on smart phones, tablets or desktop computers, and spent at least 30 minutes per week listening to internet radio. Panel members also used social media at least 3 times per week.