Internet radio services like Pandora and Slacker radio are building momentum, following in the footsteps of conventional radio by offering subscription-free radio supported by advertising.
But don't let all that buzz fool you. Though the Internet radio services are getting the press, conventional radio is alive and well -- still the most used audio platform among consumers.
Because there's one thing that's holding Pandora, Slacker and streaming radio back: in-car listening. Terrestrial radio will continue to rule the air until 3G or 4G access is the norm in automobiles.
Let's take a look at the numbers. Pandora clocks in at a reported 60 million listeners at the end of 2010. Sirius XM, 20 million. Conventional radio? Each week in 2010, an average of 241.6 million people listened to conventional radio. So that's 60 million for Pandora, 20 million for Sirius XM. 80 million to 241 million. Let's even add Slacker's 10 million, reported at the end of 2009. So that makes it 90 million combines listeners among Sirius XM, Pandora and Slacker to 241 for conventional radio.
Like all media, conventional radio must evolve. And it is, by moving its signal online. Streaming an AM/FM radio signal is becoming a must for traditional radio stations. The future of local radio, I believe, is online. And streaming over-the-air broadcasts is the logical bridge to that point.
Internet Radio(also called web radio, streaming radio, net radio, e-radio)
Pandora is crushing the internet radio competition. A reported 60 million listeners at the end of 2010. Ando Media recently released its Internet Audio ranker for January, which lists the top-20-performing Internet radio stations. Pandora came out on top, with more than 643,000 listener sessions for the month of January. Next in line was CBS Radio with just over 161,000. CBS Radio's network is nearly 200 stations covering news, sports, talk, rock, pop, oldies, and adult contemporary, many of which are streaming AM/FM stations. Slacker ranked No. 5 out of the top 20, with just under 36,000 average active sessions in January.
Average time spent listening per session for internet radio, however, comes in below its conventional radio counterpart.
Most likely because of the means of distribution: the Internet. Whereas AM/FM radios are nearly ubiquitous, Internet-radio devices are rolling out but still missing a vast majority of the automobile industry, where much of radio listening takes place.
Pandora clocked in at an average time spent listening for each session of .85 hours. CBS Radio at .90 hours. Bonneville Corporate had the highest average time spent listening, coming in at 3.42 hours.
Conventional radio average time spent listening per session is roughly 3 hours during the weekday and 5 hours for each session over the weekend.
As in-car units become more readily available and a factory standard, watch for average time spent listing to increase substantially for Internet radio.
Pandora
Pandora makes things easy for listeners: subscription free and on nearly every device you own.
Pandora got its start on the computer. But the company is making even bigger leaps away from its traditional home on the PC. Pandora is now available on smartphones, tablets, televisions and a select number of automobiles.
According to a published report from Advertising Age, more than 50 percent of Pandora listening accomplished on devices other than the PC.
Pandora offers two ways to listen, as well as a third ad-supported brand radio.
Ways to Tune-in to Pandora
- Create your station: select artists you like and Pandora will choose songs it thinks you'll enjoy based on your interests.
- Genre stations, pick your format: very similar to conventional radio, with a different format for each station including rock, pop, R&B, hip-hop, country, etc.
- Brand radio. Advertisers compile a mix and a pop-up banner appears on the computer screen, with a heading along the lines of "Listen to Subway Radio," or whatever the advertiser. Another way advertisers are blurring the lines between ads and content.
Pandora does offer an ad-free option. Pandora One is $3 per month, billed $36 annually, to stream its music commercial-free. Pandora One also offers unlimited skips whereas the free version allows 12 skips per hour. "Skips" allow you to skip the current song and move on to the next.
Slacker
Slacker CEO Jim Cady will be a keynote speaker at radio's digital media conference, dubbed Convergence 11, May 18 and 19 in Mountain View, Calif. Slacker is the next hot thing on the music street.
Much like Pandora, Slacker offers two ways to listen: create your station or pick a music genre/format.
One advantage Slacker has over Pandora, and the reason I've been listening to it more than Pandora, is its partnership with ABC News. I'm enjoying my 14-day free trial of ABC News in my custom station, with news breaks at the top of each hour.
The company also recently announced a deal with ESPN which will give Slacker users access to ESPN Audio content including Mike and Mike In the Morning, SportsCenter, The Herd with Colin Cowherd, as well as top news stories and sporting events.
Slacker also offers an ad-free subscription option. Slacker Radio Plus is $4.99 per month billed monthly or billed annually at $47.88 ($3.99 per month). Slacker Radio Plus, in addition to commercial- and banner-free listening, offers unlimited song skips, complete lyrics and ABC News breaks at the top of each hour. As well as a cache feature that allows users to, after creating a station, save the playlist for offline use.
Slacker Premium Radio was introduced after Radio Plus and features even more radio goodness including lyrics, on-demand access to songs, caching and playlists. Slacker Premium Radio is $9.99 per month.
SiriusXM Satellite Radio
Since their start in 2001, Sirius and XM Satellite radio have both required in-car or at-home units that must be purchased from SiriusXM or authorized third-party developers. Subscription rates start at $14.95 per month.
Sirius Satellite radio and XM Satellite Radio completed their merger in 2008. The services still operate independently as to receive both Sirius and XM, subscribers must pay more for the "Sirius Everything Plus the Best of XM." Otherwise you'll get the Sirius lineup or the XM lineup, with some crossover but still different stations and sports leagues and sports/talk personalities.
After the merger and since the end of 2010, Sirius XM subscribers total 20 million. Sirius XM operates on a dual revenue stream, with monthly subscriptions in addition to advertising on its News, Sports and Talk stations. Its music-only stations are commercial free.
Update: After the merger, SiriusXM has introduced new pricing plans: Internet Radio, Sirius/XM Select, Sirius/XM Premier (Depending upon which radio the user has purchased).
SiriusXM Internet Radio is an Internet-only subscription for $14.49 per month, with more than 130 channels streaming. No unit is required.
SiriusXM Select is an in-car or at-home subscription featuring 130 channels -- requiring a Sirius Radio unit -- that comes in at the same price of $14.49.
Sirius Premier, with 140 channels, will set you back $17.99 per month. For both in-car or at-home plans, users have the option to add SiriusXM Internet radio for an additional $3.50 per month.
