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Streaming vs. Terrestrial Radio: Who Will Win?

Posted by Tricia Varner on 10/13/15 8:44 AM

Pandora. Spotify. Slacker. If I asked you 10 years ago what these names meant, you probably wouldn’t recognize them. Maybe even five years ago. The amazing rate that these streaming stations are growing (according to Spotify, it grew from 50 million listeners in September 2014 to 60+ million in just four months!), however, is indicative of the ever-swelling digital wave that lately has been engulfing nearly every media channel.

Streaming vs. Terrestrial Radio: Who Will Win?

Let’s talk streaming for a minute. There’s no denying that streaming radio is becoming more prevalent, especially with increasing AM/FM terrestrial radio station streams and customizable pureplay radio options. Approximately 94 million Americans ages 12 and older—or more than 1 in 3—listened to all forms of online radio on a weekly basis in 2014, based on Edison Research’s Infinite Dial 2014 national survey.

And it looks like more and more people are only going to join the streaming audio bandwagon. According to Rain News, audio streaming listening hours are estimated to grow more than 40 percent, from 30 billion in 2014 to 43 billion in 2017. That plays out to be roughly 180 million U.S. digital radio listeners, per eMarketer.

It’s no wonder, considering streaming radio is pretty good at what it does. How so? Advertisers looking to geotarget and pinpoint the just-right consumer can do that with streaming services. “Online listeners are worth their weight in gold to webcasters and advertisers targeting the Internet audience,” said Bill Rose, vice president/general manager, Arbitron Internet Information Services.

So that leaves us to ponder where good old-fashioned, turn-the-knob AM/FM terrestrial radio fits in.

Will Terrestrial Radio Survive as Streaming Floods Radio?

The answer is yes, mostly because streaming isn’t really “flooding” radio at all. In reality, the Pew Research Center analysis of Nielsen Media Research data states that more than 90 percent of U.S. consumers ages 12 and older tune into traditional AM/FM radio. And leading streaming radio stations such as Pandora only reaches 15 percent of Americans, while Spotify reaches about 5 percent, according to Edison’s latest Share of Ear study.

What does that look like in active sessions? Triton Digital’s April Domestic Ranker reports that Pandora had 2.4 million average active sessions, followed by Spotify with 904,000 and iHeartMedia with 346,000. Basically, that’s peanuts compared to the vast reach terrestrial radio still has.

So essentially, there’s no need to put on the life jacket yet.

So, is Streaming Radio Overhyped?

The streaming revolution will continue to strengthen in the digital landscape. And that’s a good thing for advertisers, as it opens up new canvas to reach target audiences. It’s also provides a more convenient, customizable way for consumers to listen to the music they like. That said, terrestrial radio is still the stronghold in audio right now.  Here’s what you should keep in mind:

  • Traditional radio is still a powerhouse media channel. It’s not only reliable, it has evolved and supported new technologies, like streaming, as the world has changed.
  • Terrestrial radio is an influential tool for digital. It’s very effective for driving online sales, as it helps drive consumers to company and product websites where they’re converting to customers.
  • Streaming and terrestrial radio fits perfectly into an omni-channel marketing strategy. The most effective way to reach your target audiences is to integrate multiple media channels and build a seamless consumer experience across all platforms—including all audio and digital elements of streaming and AM/FM radio.

Are you ready to learn how streaming and terrestrial radio can positively influence your marketing strategy? Call Marketing Architects today and we’ll share nearly two decades of direct response marketing experience with you by helping you build the most powerful omni-channel marketing strategy possible. 

Topics: Direct Response Radio

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