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Evolution of Streaming Radio vs. Terrestrial Radio

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    I was in my friends car when I complimented him on the music he was listening to.  He responded that we were actually listening to Pandora.  I was quite fascinated with the idea of listening to streaming music using the stereo or navigation system while driving. He then told me that new car radios have Bluetooth capability that allows listeners to stream music using their phones.  I found out later that new Ford owners would be able to listen to Spotify using the Ford Sync AppLink.  Pandora and iHeartRadio also made deals with carmakers to add their apps to the dashboard and iTunes Radio is set to launch this coming Fall.  Music consumption has been constantly changing and this technology is definitely altering how people experience music.  An April 2013 Nielsen analysis found that five of today’s arguably must-have music streaming apps found double and triple-digit growth in unique users over the past year.

    When we start analyzing the pros and cons of streaming versus terrestrial five main points keep on resurfacing.  Its all about accessibility, programming, music exploration, cost and music purchase.   Lets look at these in detail.

    Accessibility

    We have a desire to have access to music wherever we go and providers are meeting that demand.  Terrestrial is still strong during AM and PM drives but that might change when Streaming services embed their apps in cars.  On the other side of the coin, Terrestrial radio stations allow their listeners to stream through their website.  Although it comes at a premium, we have seen an increase in advertising through streaming radio services especially for our music clients.  Its an environment that has proven to be effective and continues to have high CTRs.

    Programming

    Jim Rome and The Dan Patrick sports talk shows continue to deliver high ratings.  Who has not heard about Ryan Seacrests Top 40?  Howard Stern has avid fans.  His audience will follow wherever he goes and he continues to do very well on Sirius XM.  A lot of radio listeners enjoy quality programming.  As they say, the proof is in the pudding. Syndicators continue to vie for these personalities and for good reason.  Just like when Jim Rome moved to CBS Sports Radio leaving a seven-year run on ESPN.  In contrast, streaming services allow more customization and control of their listening experience.  In addition, on demand content has become more prevalent due to the fast paced nature of our society.

    Music Exploration

    Terrestrial radio dates back to the 19th century and has been a preferred medium for music exploration up until a few years ago when music streaming services such as Pandora and Spotify took off.  Now there is an abundance of streaming services available at our fingertips.  The Music Genome Project by Pandora allows listeners to create a personalized music experience when the listener rates the music they listen to.  It presents opportunities for people to discover similar artists and can easily click on the album cover to learn more and possibly purchase the music.

    Cost

    Streaming and Terrestrial are both free of charge.  Consumers could pay for the subscription fee on some streaming services to eliminate ads and have uninterrupted music experiences but only a small portion of the audience actually pay for it.  One thing that is apparent is that the majority of music listeners do not mind advertising enough to spend for a subscription.

    Music Purchase

    Some people who pay for streaming services may think of it as a substitute to buying singles and albums, which results in a decline of music sales.  Although streaming may be hurting the music industry it enables potential consumers to purchase effortlessly with just one click.  Terrestrial radio conversion to sale cannot be tracked but it still plays a huge role in pushing consumers to purchase based on station spins.

    As you can see there are advantages and disadvantages for each and both have an attractive audience for marketers.  Our listening experience will continue to evolve and providers will continue to adapt to the needs and wants of consumers.  Clients are allocating their budgets differently versus three to four years ago.  The upside is that with new platforms and technology we now have a couple of ways to purchase inventory on these streaming sites without breaking the bank while we still provide cost efficient solutions to hit the terrestrial market.

    How do you consume radio?  Do you listen via streaming radio or terrestrial radio? 

    Trivia time! What country did Spotify originate from?  Hint: Its where the stylish and yet affordable home furniture brand Ikea came from.  Yes, thats correct its Sweden!  Home of the classic pickled herring.

    FAQs

    Streaming radio refers to the online distribution of audio content through internet platforms, allowing users to listen to radio stations or customized playlists on various devices.

    Terrestrial radio, also known as traditional radio, refers to the broadcast of radio signals over the airwaves using AM or FM frequencies, reaching listeners through radio receivers.

    Advantages of streaming radio include a wide variety of content options, personalized listening experiences, accessibility across devices, and the ability to target specific audiences through digital advertising.

    Advantages of terrestrial radio include broad reach, local audience targeting, immediate and widespread coverage during emergencies, and the familiarity and loyalty associated with traditional radio stations.

    Streaming radio platforms allow users to create customized playlists, follow specific genres or artists, and receive personalized recommendations based on their preferences, enhancing the listening experience.

    Terrestrial radio has a wide reach because it is easily accessible in vehicles, homes, and public spaces, making it a popular choice for mass audience reach, especially during peak listening times.

    Yes, digital advertising on streaming radio platforms can be targeted based on user demographics, location, listening habits, and other data points, allowing for precise audience targeting and more effective ad campaigns.

    Terrestrial radio stations often have a strong local presence and audience connection, making them effective for targeting specific geographic areas and tailoring messages to local communities.

    Streaming radio platforms can adapt to changing listener habits by offering on-demand content, podcast integration, offline listening options, and seamless integration with other digital platforms.

    Yes, terrestrial radio is known for its ability to deliver real-time information and emergency updates to a wide audience, serving as a vital communication medium during critical situations.

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