Thursday, September 26, 2013 - 11:55am
Larry Rosin authored a new Edison Research package titled “The New MainStream,” a study of Internet radio listening. (See the slides here, and RAIN's initial coverage here.) The survey was presented at this week’s Advertising Week conference in New York, in collaboration with the Streaming Audio Task Force.
RAIN spoke with Larry Rosin about the study’s genesis and reception, the impact of Internet radio on AM/FM listening, the variety of user preferences, and, unexpectedly, 1970s research that led to the introduction of cable television in the U.K.
Here are excerpts of the conversation, lightly edited for readability.
RAIN: Can you describe the history of this study?
LR: I was contacted by the three companies on the Streaming Audio Task Force, looking for a data set dedicated to the topic of streaming audio, to create a benchmark for where things stand among the online population of the U.S. Ideally it will be repeated annually, to track the dynamic aspects of this space.
RAIN: How was it received at its introduction at Advertising Week in New York? Was there was good engagement?
LR: Very much so. Questions during and afterwards. I thought it went over really well. I think it was a logical story that hit people’s guts, made sense, and was a positive and upbeat story. I emphasized that audio is a booming category. I don’t think it had ever been put the way I put it, perhaps as forcefully. People seemed to be very open to that point of view.
RAIN: Did you discern any surprise around the 53-percent metric? [53 percent of online Americans listen to Internet radio.]
LR: Not really. I didn’t meet any resistance, and it didn’t seem to register as much higher than the audience thought it would be. I didn’t do the game-show technique of asking people to guess what the number might be.
RAIN: One key point is the amount of displacement of broadcast listening that it might represent, and the amount of listening that has been added to the day, thanks to mobile devices.
LR: There are certain people who would have you believe that not one second of online usage comes from time that was previously spent on broadcast radio. And there are people who assume that 100% of internet radio time comes straight out of broadcast radio. Of course, both are wrong. It turns out, both about equally wrong. I think it’s important to note that our study confirms what Arbitron reports about the reach of broadcast. We got virtually the exact same number that Arbitron reports for the reach of broadcast radio. But online radio has a considerable reach as well. And while the total time spent listening to broadcast radio is clearly down somewhat, not anywhere close to all the time [spent on] internet radio comes straight from AM/FM radio.
The overwhelming point is: this technology has brought audio to new places, new locations, and new times in people’s lives that they weren’t previously filling in with audio. This is a golden age of audio. If all audio were counted, people would see that never before -- probably even going back to the twenties and thirties when radio had no competition -- there is more audio listening going on today than ever before.
RAIN: Would you say there are two viewpoints, and two marketing approaches: One is reach, and the other is time spent? Things look different depending on which vantage you’re using.
LR: Correct. But it’s not a wholesale transference. The pie has absolutely expanded. I truly believe that advertisers should be shifting more money into the audio space. Then let the players in the audio space hash it out in that greater pool of money. The line which has been used for years, that the amount of time people spend with audio relative to the amount of revenue audio gets, is dead on. In fact, that discrepancy is probably worse than ever, as audio continues to expand. I am proud to be an evangelist for advertisers taking money from other verticals and putting more of it into the audio space.
RAIN: It seems that choice is a thread that runs through many of the survey responses. Choice of stations, choice of tracks, etc. Are choice and customization the main differentiators of Internet radio?
LR: They are slightly different things, but yes. They are two of the things that really matter to people. But there are other [reasons to choose Internet radio] that people might find surprising. A lot of people mentioned better sound quality, or reception, if you will. A lot of people are transferring listening to their favorite over-the-air radio station to I.P. because they can hear it better. In this day and age, with a lot of RF in office buildings, a lot of interference, for many people the Internet is a better way to listen.
Another reason [survey respondents choose Internet radio], in services like Pandora and Spotify, is the ability to skip songs, [which is] a powerful differentiator of their experience. It repositions the experience of linear listening. It changes the way you relate to what you’re listening to. It’s not unlike a DVR. If you’re accustomed to pausing live TV, and then you’re in a hotel room and you lose that capability, it can be frustrating to shift back. It’s a similar situation [in radio listening]; it’s hard to shift back.
RAIN: What you’re saying is parallel to how media consumption has been developing for years, getting more granular in the choices offered to consumers.
LR: I’ll tell you an anecdote. In the late-1970s or early-1980s, a research company did a study in the U.K. about television, and whether there would be a market for cable television in the U.K. At that time television sets in Great Britain had four buttons on them. There were four television stations. That’s how you watched it. They did a survey. People’s overwhelming response was, “What more could we possibly want? We’ve got FOUR choices at any given time!” People’s imaginations couldn’t conceive of wanting more than four channels. Undaunted by this research, and seeing what was going on in the U.S., they launched cable television in the U.K. Suddenly, people were like, “Oh, wait a second here. There’s a 24-hour news channel?”
Very few people are against more choice. [But] there is a paradox of choice. Too many choices [can be] stressful and overwhelming. Seems like, in media, very few people feel that way.
RAIN: TV in America used to be four channels: ABC, CBS, NBC, and public television.
LR: Oh yeah.
RAIN: There are different postures of Internet listening: lean forward, lean back, and various postures in between. Your data seem to show that an in-between attitude -- for example, leaning forward to create an artist-based station, then leaning back to listen -- has the highest usage metric. Is that correct?
LR: Right. But there’s a lot that goes into that. Certain platforms and products have had a nice running start, and have developed that. It’s fascinating to track. Your thesis could very well be correct. Or, it could just be a moment in time, and those numbers might change.