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Internet/Satellite Radio - Canada - October 2018

"In a 2002 interview with The New York Times, legendary musician David Bowie predicted, “the absolute transformation of everything that we ever thought about music will take place within 10 years, and nothing is going to be able to stop it.” He went on to say that, “music itself is going to become like running water or electricity.” Almost two decades later, Mr. Bowie’s prophecies appear to be coming true. A music industry that has traditionally focused on the development of personal libraries and collections – whether they were vinyl records, cassette tapes, CDs or MP3s – is now seeing its content provided by monthly access to consumers via mobile networks and Wi-Fi connections. At the same time, the radio airwaves are no longer completely dependent on AM and FM signals; broadcasts are now being sent directly to cars and homes from satellites with global capabilities."

– Scott Stewart, Senior Technology and Media Analyst

This report examines the following issues:

  • Satellite radio is vulnerable to emerging internet radio technology
  • Significant barriers are limiting the growth potential of online music streaming

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • The issues
          • Satellite radio is vulnerable to emerging internet radio technology
            • Figure 1: Usage occasions for radio, August 2018
          • Significant barriers are limiting the growth potential of online music streaming
            • Figure 2: Reasons for not subscribing to paid audio content, August 2018
          • The opportunities
            • Almost half of consumers are already paying for an internet/satellite radio service
              • Figure 3: Music streaming service subscriptions, by age, August 2018
            • Many potential subscribers are already using free online music sources
              • Figure 4: Non-subscription audio content sources, August 2018
            • Online music streaming is changing how people discover and consume music
              • Figure 5: Sources used to discovered new music, August 2018
            • What it means
            • The Market – What You Need to Know

              • A brief history of internet radio
                • Data requirements for online music streaming
                  • The decline of CDs and digital downloads
                    • Satellite vs traditional radio in major cities
                      • Impact of internet radio on local radio advertisers
                        • Online streaming services fit with overall tech innovation
                        • Market Factors

                          • A brief history of internet radio
                            • Data requirements for online music streaming
                                • Figure 6: Spotify, September 2018
                              • The decline of CDs and digital downloads
                                • Satellite vs traditional AM/FM radio in major cities
                                  • Impact of internet radio on local radio advertisers
                                    • Online streaming services fit with overall tech innovation
                                      • Figure 7: Music fans: Introducing Actions for your Google Assistant, January 2018
                                      • Figure 8: This is Spotify Connect, September 2016
                                  • Key Players – What You Need to Know

                                    • Streaming services are expanding beyond music
                                      • Spotify is moving into the gaming world
                                        • SiriusXM Radio is using mergers and acquisitions strategically
                                          • The streaming service business model may not be sustainable long term
                                            • The music streaming market is difficult for new entrants
                                              • Streaming music services are getting creative to differentiate
                                                • Leveraging data from streaming services and other databases
                                                • What’s Working?

                                                  • Streaming services are expanding beyond music
                                                    • Spotify is moving into the gaming world
                                                      • SiriusXM Radio is using mergers and acquisitions strategically
                                                      • Challenges

                                                        • The streaming service business model may not be sustainable long term
                                                          • The music streaming market is difficult for new entrants
                                                          • What’s Next?

                                                            • Streaming music services are getting creative to differentiate
                                                              • Leveraging data from streaming services and other databases
                                                              • The Consumer – What You Need to Know

                                                                • Prevalence of paid radio subscriptions
                                                                  • Consumption of non-subscription audio content
                                                                    • Satellite radio’s role in the audio content market
                                                                      • Barriers to paid streaming subscriptions
                                                                        • How streaming is changing consumer behaviour
                                                                        • Prevalence of Paid Radio Subscriptions

                                                                          • Paid subscriptions are in the minority, but are still sizeable
                                                                            • Figure 9: Music streaming service subscriptions, by age, August 2018
                                                                            • Figure 10: Music streaming service subscriptions, by age and gender, August 2018
                                                                            • Figure 11: Audio content listened to at work among 25-44-year-olds, by gender, August 2018
                                                                            • Figure 12: Music streaming service subscriptions, by income, August 2018
                                                                            • Figure 13: Music streaming service subscriptions, by age and income, August 2018
                                                                            • Figure 14: Music streaming service subscriptions, by presence of children, August 2018
                                                                          • Music streaming services are highly competitive
                                                                            • Figure 15: Music streaming services subscribed to, August 2018
                                                                            • Figure 16: Music streaming services subscribed to, by gender, August 2018
                                                                            • Figure 17: How to make Mondays (sorta) awesome, October 2015
                                                                            • Figure 18: Apple Music: Asahd vs Khaled: The Negotiation – Apple, July 2018
                                                                            • Figure 19: Amazon Prime Membership – Discover Your Benefits, October 2015
                                                                        • Consumption of Non-Subscription Audio Content

                                                                          • Consumers are still using traditional channels for audio content
                                                                            • Figure 20: Non-subscription audio content sources, August 2018
                                                                            • Figure 21: Listen to traditional AM/FM radio, by age, August 2018
                                                                            • Figure 22: Usage occasions for traditional AM/FM radio, August 2018
                                                                            • Figure 23: Your Google Assistant for Android Auto: Get entertainment, January 2018
                                                                            • Figure 24: Source of audio content, by age, August 2018
                                                                          • Alternative sources of audio content are trying to establish a position
                                                                            • Figure 25: Paid vs free access to online music streaming services, by age, August 2018
                                                                            • Figure 26: Usage of internet radio stations and platforms, by income, August 2018
                                                                        • Satellite Radio’s Role in the Audio Content Market

                                                                          • Satellite radio is one-dimensional and vulnerable
                                                                            • Figure 27: Subscribe to SiriusXM Radio, by income, August 2018
                                                                            • Figure 28: Usage occasions for radio, August 2018
                                                                            • Figure 29: Usage occasions for radio, August 2018
                                                                          • Automobile innovation is a threat to satellite radio
                                                                              • Figure 30: Subscribe to SiriusXM Radio, by living area, August 2018
                                                                          • Barriers to Paid Streaming Subscriptions

                                                                            • Half of non-subscribers think free content is just as good
                                                                              • Figure 31: Reasons for not subscribing to paid audio content, August 2018
                                                                              • Figure 32: Don’t subscribe to paid audio content because free content is just as good, by age, August 2018
                                                                              • Figure 33: Source of non-subscription audio content, by ‘free content is just as good’, August 2018
                                                                              • Figure 34: Don’t listen to enough audio content to make subscription worth it, by age, August 2018
                                                                              • Figure 35: Don’t listen to enough audio content to make subscription worth it, by age and income, August 2018
                                                                            • Removing ads is a significant advantage for paid services
                                                                              • Figure 36: Reasons for subscribing to paid audio content, August 2018
                                                                              • Figure 37: Reasons for subscribing to paid audio content: ‘I don’t like listening to ads’, by age, August 2018
                                                                              • Figure 38: Spotify, September 2018
                                                                          • How Streaming is Changing Consumer Behaviour

                                                                            • People are listening to audio content in new ways
                                                                                • Figure 39: Use music streaming services to listen to songs I wouldn’t otherwise pay for, by age, August 2018
                                                                                • Figure 40: Discovered new music on streaming services, by age, August 2018
                                                                                • Figure 41: Sources used to discovered new music, August 2018
                                                                                • Figure 42: Use when hosting social gatherings, August 2018
                                                                              • Streaming services are helping to curb illegal download activity
                                                                                  • Figure 43: Getting less music from torrent/peer-to-peer sites, by age, August 2018
                                                                              • Appendix – Data Sources and Abbreviations

                                                                                • Data sources
                                                                                  • Consumer survey data
                                                                                    • Abbreviations and terms
                                                                                      • Abbreviations
                                                                                        • Terms

                                                                                        Internet/Satellite Radio - Canada - October 2018

                                                                                        US $4,395.00 (Excl.Tax)