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Internet Radio - US - October 2016

"The use of internet-based music services is closing in on traditional means of listening to music, including terrestrial radio and personal libraries. The finding, alongside clear distinctions in how younger listeners use streaming services suggests that over the next decade streaming services will become the dominant means of listening to music, with ad sales and subscription sales currently allocated to terrestrial and satellite radio broadcasts transitioning to the coffers of streaming media services. To this end, Mintel’s Report explores how streaming services can better understand current users, and how advertisers can best take advantage of the growing usage of streaming services."
- Billy Hulkower, Senior Technology Analyst

This report discusses the following key topics:

  • Thumbs down for discovery, song selection, personalization
  • Audience opposed to monetization
  • Amazon about to take a bite out of competition

This Report covers internet-based streaming music services, including personalized streams utilizing user inputs of likes and dislikes and on demand services. Terrestrial radio, satellite radio, and personal libraries are discussed in the Report as competing sources of music listening. While data includes internet-based rebroadcasts of terrestrial radio, the focus of research rests on personalized streams of music services via desktop platforms and mobile apps. Video-based sources of music, including YouTube and Vevo, are considered to be part of the streaming music market.

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • The issues
          • Thumbs down for discovery, song selection, personalization
            • Figure 1: Attitudes to streaming music services, June 2016
          • Audience opposed to monetization
            • Figure 2: Attitudes to ads, subscriptions, and buying music, June 2016
          • Amazon about to take a bite out of competition
            • Figure 3: Leading internet radio services, June 2016
          • The opportunities
            • Migration from desktop to smartphone to lead revenue charge
              • Figure 4: Use of internet radio services on smartphones, by age, June 2016
            • Massive gains in ad sales still available from terrestrial radio
              • Figure 5: Terrestrial radio ad sales vs streaming music revenues, at current prices, 2013-15
            • Movement into dashboards to propel listening during commutes
              • Figure 6: Use of online music services in car, by household income, June 2016
            • What it means
            • The Market – What You Need to Know

              • Significant growth as smartphones and car usage boost sales
                • Paid subscriptions taking over
                  • SiriusXM subscriptions top leading internet radio subscriptions
                    • Amazon’s weight yet to be felt
                    • Market Size and Forecast

                      • Revenue quadruples from 2011-16
                        • New services add to growth
                          • Dashboard integration, smartphone usage to head further gains
                              • Figure 7: US revenues and fan chart forecast of streaming music, at current prices, 2011-21
                              • Figure 8: US revenues and forecast of streaming music, at current prices, 2011-21
                          • Market Breakdown

                            • New services propel paid subscriptions to leading segment
                              • Figure 9: US streaming music revenues and market share, by segment, 2013 vs 2015
                            • Growth slows for digital radio
                              • Figure 10: US streaming music revenues, by segment, 2011-15
                          • Market Perspective

                            • Competition between traditional listening and streaming
                              • Younger streamers dumping traditional listening
                                • Figure 11: Traditional music listening vs internet radio, by age, June 2016
                              • SiriusXM retains larger base than streaming services
                                • Figure 12: Satellite radio sales vs internet radio subscription sales, 2013-15
                              • High-income groups favor satellite radio
                                • Figure 13: Use of traditional listening platforms vs internet radio streams, by household income, June 2016
                              • Music sales still twice the size of streaming revenue
                                • Figure 14: US music sales, 2011-15
                            • Market Factors

                              • Smartphone usage
                                • Figure 15: Use of internet radio services on smartphones, by age, June 2016
                              • Sponsored data, unlimited plans a perk for streaming
                                • Dashboard access to propel ad sales
                                  • Figure 16: Use of online music services in cars, by age, June 2016
                                • Power users make use of mobile and auto
                                  • Figure 17: Use of online music services in cars and on smartphones, by number of services used, June 2016
                              • Key Players – What You Need to Know

                                • YouTube, Pandora most commonly used services
                                  • Advertising costs to narrow field
                                    • Amazon to cap on demand subscriptions, listening hours
                                    • What’s Working?

                                      • More than half of listeners use Pandora
                                        • On demand subscriptions
                                            • Figure 18: Internet radio services used, June 2016
                                        • What’s Struggling?

                                          • Concerns at Pandora
                                            • Subscriptions not rising as rapidly as at competing services
                                              • Stalling listener hours, user base
                                                • Efforts underway to resume growth
                                                  • Advertising ups ante for niche services
                                                    • Figure 19: Internet radio services used, June 2016
                                                • What’s Next?

                                                  • Amazon’s weight to be felt
                                                    • Consolidation continues
                                                      • Extending beyond music
                                                        • Exclusivity
                                                          • Lower pricing
                                                          • The Consumer – What You Need to Know

                                                            • Online adults as likely to stream as to listen to traditional radio
                                                              • Listening style varies with age
                                                                • Young, urban, and Hispanic groups closer to subscribing
                                                                  • Young, urban, and Hispanic groups respond positively to ads
                                                                    • Men, high-income groups spend on music
                                                                    • Methods of Listening to Music

                                                                      • Streaming closes in on traditional music listening
                                                                        • Figure 20: Methods of listening to music, June 2016
                                                                      • Young, Hispanic, urban trend toward internet radio
                                                                        • Figure 21: Methods of listening to music, by Hispanic origin and area, June 2016
                                                                    • Usage Patterns

                                                                      • Passive usage the standard
                                                                        • Figure 22: Attitudes and behavior relating to listening style, June 2016
                                                                      • Age primary determinant of listening style
                                                                        • Figure 23: Attitudes and behavior relating to listening style, by age, June 2016
                                                                      • Rural users put in time
                                                                        • Figure 24: Attitudes and behavior relating to listening style, by area of residence, June 2016
                                                                    • Subscribing

                                                                      • One in five use a paid service
                                                                        • Figure 25: Use of paid subscriptions, June 2016
                                                                      • Men, youth, Hispanics, and high-income groups sign on
                                                                        • Figure 26: Use of paid subscriptions, by select demographics, June 2016
                                                                    • Attitudes to Subscription

                                                                      • Listeners want music free of charge, ads
                                                                        • Figure 27: Attitudes to subscriptions, June 2016
                                                                      • Young more inclined to subscribe, accept ads
                                                                        • Figure 28: Attitudes to subscriptions, by age, June 2016
                                                                      • Urbanites, Hispanics more tempted by subscriptions
                                                                        • Figure 29: Attitudes to subscriptions, by Hispanic origin and area, June 2016
                                                                    • Response to Ads

                                                                      • Similar responses seen between internet and traditional radio
                                                                        • Figure 30: Response to ads, traditional vs internet radio, June 2016
                                                                      • 18-44s respond more positively to internet radio ads
                                                                        • Figure 31: Response to internet radio ads, by age, June 2016
                                                                      • Hispanics, urbanites respond more favorably to ads
                                                                        • Figure 32: Response to internet radio ads, by area, June 2016
                                                                        • Figure 33: Response to internet radio ads, by Hispanic origin, June 2016
                                                                    • Buying Music

                                                                      • Usual suspects also top buyers
                                                                        • Figure 34: Purchasing music heard on internet radio, by select demographics, June 2016
                                                                    • Appendix – Data Sources and Abbreviations

                                                                      • Data sources
                                                                        • Sales data
                                                                          • Fan chart forecast
                                                                            • Consumer survey data
                                                                              • Abbreviations and terms
                                                                                • Abbreviations
                                                                                  • Terms
                                                                                  • Appendix – Market

                                                                                      • Figure 35: Total US revenues and forecast of streaming music, at inflation-adjusted prices, 2011-21
                                                                                  • Appendix – Consumer

                                                                                      • Figure 36: Use of subscription-only services, by area, June 2016
                                                                                      • Figure 37: Use of subscription-only services, by household income, June 2016
                                                                                      • Figure 38: Traditional music listening vs internet radio, by number of services used, June 2016
                                                                                      • Figure 39: Purchasing music heard on internet radio, by demographics, June 2016

                                                                                  Internet Radio - US - October 2016

                                                                                  US $3,995.00 (Excl.Tax)