Terrestrial Radio Reacts To Growing Online Audience

Arbitron has released new data showing that the online radio audience has doubled every five years since 2001 to 57 million in 2011. However, September figures show the traditional audience grew slightly this past year to 241.4 million. According to a recent article in the New York Post, “a number of private-equity players are making bets that radio is ripe for transformation, thanks to the growth of mobile and huge interest in digital music platforms.”

However, lest anyone unplug their terrestrial radio, Arbitron also says that 81% of listeners still use am/fm and only 11% listen to online only. “The total terrestrial market is $16 billion and streaming is around $500 million,” says Arbitron’s Paul Krasinski. “It’s a budding industry starting to grow.”

Despite the fact that a huge gap exists between the well established terrestrial industry and newer online entities, there is lots of activity on all sides. For example, Clear Channel’s iHeart Radio app recently relaunched. It offers access online to almost all of the company’s hundreds of stations, plus includes interactive features that resemble some of the other players in the online space such as Pandora.

“Consumers require more control, and the challenge is that traditional radio doesn’t provide it,” says Slacker CEO Jim Caddy. “Look at TV and time-shifting — all those things are now reinventing radio. You can ask it to play what you want.”