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Radio Is Streaming’s Next Frontier How Streaming Will Disrupt Radio Like It Did Retail

Report by Mark Mulligan
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The 20,000 Foot View:  Streaming’s first achievement was becoming a long-term successor to retail, now it has its sights set on doing the same to radio. Even though the revenue per user is much smaller, the addressable market is far higher. Streaming’s post-radio strategy has the potential to be much more far reaching and impactful than subscriptions have been in terms of audience impact at scale. Radio companies are just beginning to wake up to the magnitude of the threat, but in the main underestimate it because traditional radio measurement methodologies underplay the extent of change taking place.

Key Findings

  • Radio is losing teens to streaming:        of        year olds stream for free, compared to        that listen to radio
  • Radio audiences are getting smaller: radio listener penetration in the US, Canada, Australia and UK fell to        in        2017 from        in        2016
  • Radio audiences are also older:        are aged        plus, compared to        for streaming
  • Radio suffers from brand fragmentation, with the average WAU penetration for the top radio brand just        compared to        for Spotify
  • Free streaming penetration is steady in mature markets but with a clear younger audience bias
  • After holding back the Spotify tide for years, Pandora’s user base is now in decline, as is Sirius XM’s
  • Curated playlist penetration is stable at        in        2017, with a young audience spread
  • Curated playlist brands are the equivalent of radio channels, but none have more than        total population penetration 
  • Deezer has the highest share of its users using curated playlists        while Amazon has the highest share using user-generated playlists       
  • The most engaged radio listeners are the most likely to adopt streaming:        of weekly radio listeners use free streaming
  • Radio companies need to create something that is neither what radio nor streaming currently offer

Companies and brands mentioned in this report: Afternoon Acoustic, Amazon, Amazon Prime Music, Apple, Apple Music,  BBC, Capital, Deep Focus, Deezer, Echo, Global, Google Play Music, Heart, iHeart, iHeart Media, Intense Studying, Liberty Media, Mixcloud, Napster, Peaceful Piano, Radio        Radio        Rap Caviar, Rhapsody, Pandora, Sirius XM, Slacker, Soundcloud, Spotify, Tidal, Vevo, YouTube

*Note: As a supplement to this report, an additional seven slides are included in the Powerpoint published alongside this report.

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