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AM/FM radio:the centerpiece of
American audioFeaturing data from Edison’s Share of Ear Q3 2016
The gap between the perception and reality of audio listening among advertisers has never been greater. The truth is, AM/FM radio is bigger than ever.
This report examines Edison Research’s Share of Ear data to explore:
• The size and strength of AM/FM radio
• Emerging audio trends
The key takeaway: AM/FM radio dominates the audio landscape with mass reach and significant time spent.
The data: about Edison’s Share of Ear
“Share of Ear” is the authoritative and definitive view of how Americans consume audio content. Edison reports share of audio time spent and percentage of Americans who use each content source.
Edison Research conducts a quarterly study to track consumer use of audio. Each quarter, 2,000 respondents keep a 24-hour diary to record audio usage. Each released study reflects 8,000 respondents, representing a rolling four-quarter average.
Edison is a leading provider of AM/FM radio research, with more than 20 years experience. They also conduct exit polling for all national elections for America’s television networks.
Perception: AM/FM radio and streaming are nearly equal in the eyes of advertisers
Source: Advertiser Perceptions, May 2015, 327 advertisers and agencies
According to Advertiser Perceptions, advertisers and agencies think the share of
audio time spent with AM/FM radio is nearly the same as streaming
55%
45%
AM/FM radio
Spotify Pandora
Reality: AM/FM radio is the centerpiece of audio
Source: Source: Edison Research, “Share of Ear,” Q4 2015-Q1 2016, Q2-Q3 2016. Persons 18+
SiriusXM: Ad-Supported: Spoken Word. Ad-Free: MusicPercentages may not add up to 100 due to rounding
Share of audio time spent among persons 18+
1%
1%
1%
2%
2%
2%
4%
5%
6%
6%
7%
13%
52%
Ad-supported SiriusXM
Ad-free Spotify
Ad-free Pandora
Podcasts
Other
Ad-supported Spotify
Other streaming audio
TV music channels
Ad-supported Pandora
Ad-free SiriusXM
Music videos on YouTube
Owned music
AM/FM radio
The size and strength of AM/FM radio
52%
6%3%
AM/FM radio Pandora Spotify
People spend a much higher percentage of time with AM/FM radio than digital audio
Share of audio time spent persons 18+
18AM/FM radio is
times bigger than Spotify
8AM/FM radio is
times bigger than Pandora
Source: Edison Research, “Share of Ear,” Q4 2015-Q1 2016, Q2-Q3 2016. Persons 18+
The size and strength of AM/FM radio
People spend more time each day with AM/FM radio than digital audio
Source: Edison Research, “Share of Ear,” Q4 2015-Q1 2016, Q2-Q3 2016. Persons 18+
Average daily minutes listened among persons 18+
16 minutes7 minutes
AM/FM radio Pandora Spotify
2 hours10 minutes
The size and strength of AM/FM radio
AM/FM radio reaches significantly morepeople than digital audio
Source: Edison Research, “Share of Ear,” Q4 2015-Q1 2016, Q2-Q3 2016. Persons 18+
% of persons 18+ who listen daily
72%
14%6%
AM/FM radio Pandora Spotify
12
AM/FMradio has
times the daily reach of Spotify
5
AM/FMradio has
times the daily reach of
Pandora
The size and strength of AM/FM radio
Two-thirds of AM/FM radio listening is out of home
Source: AM/FM location of listening: Nielsen RADAR 130, September 2016; All Radio Stations Persons 12+, AQH M-SU
6AM-MID; Streaming Location: Edison Research, “Share of Ear,” Q4 2015-Q1 2016, Q2-Q3 2016. Persons 18+
67%of AM/FM
listening is away from home
37%of streaming audio
listening is away from home
The size and strength of AM/FM radio
AM/FM radio allows you to reach consumers close to the point of purchase
Only
Most listeners to other audio sources also listen to AM/FM radio
Source: Edison Research, “Share of Ear,” Q4 2015-Q1 2016, Q2-Q3 2016. Persons 18+
71%of Pandora
listeners also
listen to AM/FM
radio
67%of Spotify
listeners also
listen to AM/FM
radio
50%of SiriusXM
listeners also
listen to AM/FM
radio
The size and strength of AM/FM radio
Advertising on AM/FM radio also reaches a digital and satellite audience
Most Pandora listening comes from 5% of the U.S. – to reach everyone else, use AM/FM radio
% of daily total Pandora usage contributed by the 40% heaviest users
Source: Edison Research, “Share of Ear,” Q4 2015-Q1 2016, Q2-Q3 2016. Persons 18+The heaviest users represent listeners who have consumed 90+ minutes of Pandora per day
5%of Americans
represent
74%of Pandora listening
The size and strength of AM/FM radio
2%of Americans
represent
75%of Spotify listening
Source: Edison Research, “Share of Ear,” Q4 2015-Q1 2016, Q2-Q3 2016. Persons 18+The heaviest users represent listeners who have consumed 105+ minutes of Spotify per day
% of daily total Spotify usage contributed by the 40% heaviest users
Most Spotify listening comes from 2% of the U.S. –to reach everyone else, use AM/FM radio
The size and strength of AM/FM radio
Listening in the car
“The biggest risk for radio is the26-year-old planner who lives in New York
or Chicago and does not commute by car and does not listen to radio and thus does
not think anyone else listens to radio.”Colin Kinsella, CEO Havas Media, North America
November 16, 2016, Radio Ink Forecast Conference
AM/FM radio dominates audio in the car
0.1%
0.3%
1%
1%
1%
1%
1%
1%
3%
10%
13%
70%
Ad-free Pandora
Ad-free Spotify
Other
Music videos on YouTube
Ad-supported Pandora
Ad-supported Spotify
Other streaming audio
Podcasts
Ad-Supported SiriusXM
Owned music
Ad-Free SiriusXM
AM/FM radio
Share of audio time spent in-car among persons 18+
Source: Edison Research, “Share of Ear,” Q4 2015-Q1 2016, Q2-Q3 2016. Persons 18+, in-carSiriusXM: Ad-supported: Spoken Word. Ad-free: MusicPercentages may not add up to 100 due to rounding
The size and strength of AM/FM radio in car
5%Public
transportation
9%Other
86%Drive in a car
or truck
Of the 146 million Americans commuting to work daily,the majority drive in a car or truck
Source: U.S. Census Bureau, 2014 American Community Study
% of commuting by method
89% of car commuters
drive alone
The size and strength of AM/FM radio in car
In New York, the capital of media planning and buying, only 25% of people commute by car
Source: U.S. Census Bureau, 2014, American Community Survey, 1 year estimates. Means of transportation to work. American fact finder
City% that commute by car
or truck
% that commute by public
transportation
New York City 25% 57%
Los Angeles 84% 6%
Chicago 79% 12%
San Francisco 69% 17%
Dallas 91% 2%
Houston 91% 2%
Washington DC 76% 14%
Atlanta 88% 3%
Philadelphia 81% 10%
Boston 74% 13%
Total U.S.A. 86% 5%
The size and strength of AM/FM radio in car
Commuting habits of media buyers and plannersinfluence how they buy radio
Source: NuVoodoo Study of 423 advertising decision makers, media planners, and buyers, Fall 2015
Media buyers and
planners who
commute by car are
75%more likely to advertise
on AM/FM radio16%
28%Commute by car
Commute by mass transit
% of media buyers and planners who advertise on the radio
The size and strength of AM/FM radio in car
• Centerpiece of audio: 52% of all audio time spent goes to AM/FM radio
• AM/FM radio dominates digital audio: AM/FM radio share is 8x greater than
Pandora and 18x larger than Spotify
• Massive reach: AM/FM radio reaches 72% of Americans daily, significantly more
than digital audio
• On-the-go audience: two-thirds of all AM/FM radio listening takes place out of
home, close to the point of purchase; most streaming listening occurs at home
• Highest share for in-car audio: 70% of audio time spent in the car goes to
AM/FM radio
• Duplicated audience: most of the Pandora, Spotify, and SiriusXM audiences
also listen to AM/FM radio
Key findings: AM/FM radio
Emerging audio trends
Source: “Pandora’s Plan to Stay Independent Means Push Beyond Radio,” Bloomberg Business, March 7, 2016
“Pandora pioneered something really interesting, really special with their free ad-based streaming music
service … [but now] the early adopters are moving
to on-demand, & mainstream America is still in love with AM/FM radio.”Barton Crockett, FBR Capital Markets Analyst
Time spent with streaming grows at the expense of owned music – not AM/FM radio
Streaming 50%
Streaming 49%
Streaming 48%
Streaming 48%
Streaming 46%
Streaming 46%
Streaming 42%
Streaming 40%
Owned music 50%
Owned music 51%
Owned music 52%
Owned music 52%
Owned music 54%
Owned music 54%
Owned music 58%
Owned music 60%
Q3 2016
Q2 2016
Q1 2016
Q4 2015
Q3 2015
Q2 2015
Q1 2015
Q4 2014
Source: Edison Research, “Share of Ear,” Persons 13+. Q4 2014 – Q3 2016
Share of audio time spent between streaming and owned music
Emerging audio trends
Pandora stalls while Spotify grows
Source: Edison Research, “Share of Ear,” Spring 2015 – Spring 2016; Persons 13+
15.4% 15.5% 15.2% 14.9% 14.6%
5.4% 5.8%7.0% 7.4% 7.8%
Q3
2015
Q4
2015
Q1
2016
Q2
2016
Q3
2016
Q3
2015
Q4
2015
Q1
2016
Q2
2016
Q3
2016
Emerging audio trends
% of persons 13+ who listen daily
Audience share trends by audio source
Source: Edison Research, “Share of Ear,” Q3 2015 – Q3 2016; Persons 13+
Q3
2015
Q4
2015
Q1
2016
Q2
2016
Q3
2016
Q3 2015 vs. Q3 2016:
year over year %Takeaway
Owned music 15.1 14.8 15.3 14.8 13.8 -8.6Americans now rent
their content
YouTube music
videos 5.9 6.2 6.2 6.7 7.6 +28.8YouTube unseats
Pandora
Pandora 6.4 6.6 6.4 6.6 6.3 -1.6Growth stalls as
consumers shift to
on-demand
Spotify 2.5 2.8 3.5 3.6 3.7 +48.0Stunning growth
moderates
Apple Music 1.1 1.0 0.8 0.7 0.6 -45.5Apple is not a media
company
How to read: As of Q3 2016, Americans spend 13.8% of their audio time with owned music.
Emerging audio trends
Spotlight on Millennials
9.6% 9.0%
YouTube and Spotify see massive growth, Pandora stagnates among 18-24s
On-demand
platforms
YouTube and
Spotify soar
36%
Share of audio time spent
20.4%
27.8%
Pandora
YouTube
SpotifyPandora
YouTube
Spotify
Source: Edison Research “Share of Ear” Summer 2015 – Summer 2016; Persons 18-24; % of time spent
Summer 2015 Summer 2016
Emerging audio trends
21.4%18.9%
Owned music has decreased in share, YouTube/Spotifyhave jumped up among 18-24s
Source: Edison Research “Share of Ear” Summer 2015 – Summer 2016; Persons 18-24; % of time spent
Consumers in
2016 prefer to
“rent” content
rather than
purchase
Share of audio time spent
20.4%
Owned
music
YouTube
Spotify
Summer 2015 Summer 2016
Owned
music
YouTube
Spotify
27.8%
Emerging audio trends
Among 18-24 Millennials, Spotify closes theshare gap with Pandora
9.6%9.0%
6.7%
8.3%
Q3 2015 Q3 2016
Pandora Spotify
Source: Edison Research “Share of Ear” Summer 2015 vs. Summer 2016; Persons 18-24; % of time spent
Share of audio time spent Spotify’s18-24 share
surges
24%
Emerging audio trends
Spotify’s 18-24 Millennials have more passion than Pandora’s
Source: Edison Research “Share of Ear” Q4 2015-Q1 2016, Q2-Q3 2016; Persons 18-24
Ratio of audience share to reach
0.42
0.32
Spotify Pandora
How to read: Among 18-24s, Spotify generates a .42 audience share for every 1% of reach. Pandora only converts a .32 audience share for every 1% of audience reached.
Spotifydoes a better job converting its reach into
time spent
Emerging audio trends
4.94.5 4.4
4.03.7
3.1
2.7
Men 18-34 Persons 18-24 Men 25-34 Persons 18-34 Hispanics
18-34
Women
18-34
African
Americans
18-34
Total
13+
share
Podcasting resonates with MillennialsEmerging audio trends
Share of audio time spent
Source: Edison Research, “Share of Ear,” Q4 2015-Q1 2016, Q2-Q3 2016
• Time spent with streaming grows at the expense of owned music – not AM/FM radio
• Pandora stalls while Spotify grows
• Among 18-24 Millennials, Spotify closes the share gap with Pandora
• Podcasting resonates with Millennials
Trends
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