Goodbye Radio?

According to a recent report from Arbitron and Edison Media Research (EMR), approximately nine million consumers who have ever listened to Internet audio said they would be willing to pay a small fee to listen to the one audio channel they listen to most online.

The study, "Internet 8: Advertising vs Subscription—Which Streaming Model Will Win?" also reveals that 40% of "audio streamies" (the report's term for those who have listened to Internet audio) would be willing to pay a small fee for commercial-free content, high-quality audio, or content they can't find anywhere else.

Arbitron's Bill Rose explains, "This study presents important evidence about the consumer's willingness to pay a subscription fee for streaming content. For streaming subscription models to be successful, however, content providers must follow the time-tested model of offering something extra to the consumer: no commercials and great, exclusive content. In essence, Webcasters must bring the HBO model for cable broadcasting to the Internet."

The study also shows significant growth in the regular use of online audio and video. Approximately 40 million Americans (17%) listened to audio or watched video in a typical month, compared to 13% last year. Overall, approximately 80 million Americans age 12 and older (35%) reported having ever accessed streaming audio or video online. Just two years ago, less than a quarter (24%) of Americans had ever listened or watched online, claim the researchers.

EMR's Larry Rosin adds, "The streaming media business sector has experienced growing pains in recent months, and it is facing new controversies regarding digital rights fees. Despite these issues, consumers continue to use streaming media in record numbers. Therefore, Webcasters with the most compelling content and strongest brands should maintain their streaming efforts because they will be most capable of weathering the short-term obstacles and be best positioned for success when the market matures."

The Internet 8 study also finds that 45% of audio streamies said they use the Internet to listen to audio content they cannot find otherwise on traditional over-the-air radio. In addition the report finds that streaming is not just a youth phenomenon. The age composition of those who listened or watched online in the past month was remarkably balanced among all age groups from 12–54 years old. These streamies are likely to live in homes and have $50,000+ annual income (49%). They are also more likely to have made an online purchase in the last month: 42% compared to 31% of all Internet users.