Radio, Music and a Future Challenged by Pandora

For decades, consumers relied on radio to learn about new music. But new technology and services like YouTube, Pandora, and iPods have changed the economics and nature of the music industry. According to data from Edison Research, radio still plays a role in the lives of younger music listeners but industry operators may want to adjust their strategy to stay relevant to consumers and marketers.

When Edison Research initially studied this topic 10 years ago, radio was an important media format to the then 12–24 year-​olds in its cohort group. The medium remains important to this group, now between the ages of 22–34. When these consumers start their day, here are the media formats they are most likely to listen to:

  • Radio 29%
  • TV 25%
  • Internet 23%

However, for younger consumers who have grown up with more technology available to them, the rate of radio use has dropped. Ten years ago, young consumers spent  2:43 hours listening to the radio on a daily basis. That level has dropped to 1:24 hours daily for 12–24 year-olds.

The good news is consumers put radio at the top of the list when it comes to finding out about new music:

  • Radio 51%
  • Friend 46%
  • YouTube 31%
  • Music video channels 23%

A chief complaint about traditional AM/​FM radio stations is that they present too many ads and perhaps not enough variety. No strangers to technology, 33% of 12–24 year-​olds have tried Pandora which gives them an interesting new way to access music. The rapidly growing service has a larger audience than Internet and AM/​FM radio streams combined.

Here’s what consumers like about Pandora:

  • Ability to create radio stations based on songs/​artists 55%
  • Fewer commercials than traditional radio stations 46%
  • Access to a wider selection of songs than AM/​FM radio stations 42%

These findings indicate that radio stations might need to adjust their strategies to attract younger music fans. Research reveals that 67% of 12–24 year-​olds are somewhat or very interested in a radio TiVo type of application. And about 1/​3rd of this age group also noted that having an FM tuner on their mobile phones would increase listening time. But radio stations could start with something more innovative. Edison Research analysts encourage radio stations to ‘claim Internet audio’. And instead of just putting out the over-​the-​air product, station owners could offer innovative formats along the lines of Pandora to protect market share and marketing dollars.
[Source: Edison Research Releases The American Youth Study 2010 — Part One: Radio's Future. Edisonresearch​.com. 29 Sep. 2010. Web. 9 Nov. 2010] 

Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.