Internet Radio Thrives, while CDs and Digital Music Downloads Decline

By Amanda Ciccatelli November 14, 2012

Internet radio has become increasingly popular as music lovers stream their favorite stations featuring certain artists and genres while at work or on-the-go. With such a wide variety to choose from, Internet radio has been designed to satisfy the needs of all types of listeners out there. As a writer, I listen to music on my Internet radio of choice, iHeartRadio almost throughout my entire workday.

Did you know that over half of all Internet users choose to listen to music using Internet radio or on-demand music services instead of CDs and digital music downloads? According to the “Music Acquisition Monitor,” a report from market research company The NPD Group, 50 percent of U.S. Internet users (96 million) listened to music on an Internet radio or on-demand music service in the past three months.

“Although AM/FM radio remains America’s favorite music-listening choice, the basket of Internet radio and streaming services that are available today have replaced CDs for second place,” said Russ Crupnick, senior vice president of industry analysis at NPD, in a statement. “We expect this pattern to continue, as consumers become comfortable with ownership defined as a playlist, rather than as a physical CD or digital file.”

According to the report, more than one-third (37 percent) of Internet users listened to music Internet radio services, while an equal percentage (36 percent) used an on-demand music service, like YouTube, VEVO, Spotify, MOG, Rhapsody, and Rdio.

via Shutterstock

Year after year, the Internet radio audience has grown 27 percent, as the on-demand music audience has grown by 18 percent. As Internet radio and on-demand listening has risen, the number of consumers who reported listening to CDs dropped 16 percent, while the AM/FM radio music audience fell four percent and the number of consumers listening to digital downloads declined by two percent.

Since 2009, the percentage of Pandora users who also listened to AM/FM radio declined by 10 percent, those listening to CDs on a non-computer device fell 21 percentage points, and listening to digital music files on portable players also dropped 21 points. These declines are partly due to the fact that 34 percent of Pandora users are now listening to music on the service in their cars.

Listening to music on YouTube typically appeals to a younger audience, but NPD found similarities in patterns among these users since 2009. Among YouTube and VEVO users, CD listening on players and in cars dropped 22 percentage points, listening to digital files on portable players declined 17 points and listening to AM/FM radio fell 12 points.

Consumers who listened to music on Pandora, VEVO, and YouTube noted a positive effect on their overall discovery of music, as 64 percent of users reported rediscovering older music, and 51 percent were learning about new music.

The report stated, “AM/FM radio has traditionally played a significant role in helping consumers learn about new music from well known artists, as well as finding new ones; however, Pandora and other music services are an increasingly important part of the music-discovery process.”

Edited by Jamie Epstein

TechZone360 Web Editor

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