The Online Radio Market
By Jon Iverson September 6, 2004 — Online radio offers music lovers an unlimited choice of music options not found with either over-the-air or satellite broadcasters. Tens of thousands of "stations" are available online at no charge to anyone with a fast enough Web connection and compatible playback software. (Just Google "Web radio" to get started.)

For the audiophile, however, the sound quality of streamed radio can be annoying: A typical high-end station might stream at 128kbps—hardly even "CD quality." But what Web radio lacks in fidelity, it often makes up for when used as a tool for exposure to new music, or as a way to hear what is going on in virtually any part of the world.

Web stations' offerings can range from a very personal (and tightly focused) mix of music and commentary to slick simulcasts of real over-the-air broadcasts from traditional radio stations. This affords listeners the opportunity to tune in to a favorite hometown commercial or public radio station while on the other side of the world, or discover the popular music scene in a foreign city that would otherwise be unobtainable locally.

And did we mention that it's all free to those with a decent connection and the right software?

As with any growing new medium, success brings with it the attention of marketers vying for access to users. RRadio Network has been surveying online radio users for the past three years, aggregating web broadcasters into demographic groups for advertisers.

Their studies indicate that 37.2% of the online radio audience resides outside of the United States. As for the 62.8% of US-based listeners, 28.8% call the east coast home, 18% live in the midwest, 4.9% are central/mountain residents, and 11.1% listen from the west coast.

The Web radio audience also tends to be well educated, with 57.7% of those surveyed saying they hold a college or post-graduate degree. It's also a predominately male audience: 22.5% of the respondents are 25–34 year-old males and 35–44 year-old males come in second at 16.1%. Women of all ages combined account for just over 30%.

Recognizing that radio has always been a background medium, RRadio Network notes, "People do other things while listening, and this has never been argued. Figuring out what that 'other' is for broadcast is relatively easy, they mostly drive a car." Online, however, the company's surveys find that most listeners (30.1%) are tuned in while at work doing "business," random Web surfing is claimed by 22.1%, and 18.1% say they just listen.

The surveyers then asked listeners what percentage of time spent with broadcast radio, against the percentage spent with radio online, and 20% of the respondents said they listen to online radio at least 80% of the time. An interesting side note is that only 3.9% of online radio listeners subscribe to satellite radio, and 42.8% of these satellite radio subscribers report listening to radio online at least 50% of their total time spent listening.

Finally, it turns out that 42.6% of online radio listeners work longer than 40 hours a week. This translates to marathon listening sessions: 40.3% say they listen between one and three hours at a time, and 47.3% listen in stretches of more three hours.