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Pure-play radio listening set to increase

Internet radio and music streaming services such as Spotify and Pandora will continue to take a share of the listening audience but their success depends on operators developing successful revenue streams says a new report, writes Kevin Hilton.

Internet radio and music streaming services such as Spotify and Pandora will continue to take a share of the listening audience but their success depends on operators developing successful revenue streams says a new report, writes Kevin Hilton. Living with Digital, compiled by research company Futuresource Consulting, concludes that “pure-play” services – non-broadcast programmes providing continuous, themed music as opposed to simulcasts by radio stations – are set to experience continuing and “relatively high consumer usage”. While the number of internet users of this form of internet radio and music streaming has not changed considerably since 2009 – 38 percent in the US and 30 percent in Europe – the study shows that listening hours have risen by 27 percent and 20 percent respectively. Most pure-play services are either free, paid for by selling airtime for commercials, or supported by user subscriptions. In the last 18 months Pandora in the US and Spotify in the UK have created sizeable followings but face considerable competition, both from conventional broadcast radio and subscription satellite radio, although this is primarily confined to the US with services such as Sirius/XM. John Bird (pictured), principal consultant at Futuresource, acknowledges that most listeners, and Europeans in particular, do not like the idea of paying for radio, but says pure-play does have its attractions. “Commercial broadcast radio has ads and all the stations have much the same mix of music,” he comments. “Thematic radio that can be personalised to a listener’s taste is a big selling point for these internet services. Perhaps even more important is the mobile aspect, with apps that can be used both in and outside the home. The in-car market is critical as well.” Bird does not view pure-play internet radio as a threat to either DAB digital radio or broadcast FM services, observing that it is a narrower market. Radio-W7 in Germany and Spotify in the UK and the Nordic countries have built up niche markets for their services and Bird says as these are still early days for internet radio there is still room for other companies to flourish. “Putting together enough consumers will be the secret of success for pure-play internet radio,” he concludes. www.futuresource-consulting.com

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