|
|
 |
|
Viewing report
|
|
|
|
2005 Outlook: Online Radio Advertising
Borrell Associates Inc., Dec 2004, Pages: 25
According to Borrell Associates, local radio broadcasters are about to join the ranks of the disrupted as thousands of online-only radio stations get their footing. The audience has grown to about 20 million listeners, half of whom may have come on board in the past year. Initial efforts by AOL, MSN, Yahoo! and others are focusing on music format, but it seems inevitable that they will strike at the heart of local broadcasters by including local traffic and weather.
While local media duke it out over the growing share of online ad spending, the major portals rush to capture the online radio audience. Meanwhile, the nation’s 13,500 broadcast radio stations have seemed, well, tuned out. What faces radio operators is an opportunity to increase listener loyalty, broaden their audience and grow non-traditional revenues. Given their lacklustre response so far, the likelier scenario is that the major portals and Internet start-ups may swipe this audience – or at least all but the drive-time segment – from local broadcast stations altogether.
It’s already happening. For as little as $2,000 per year in music licensing and Web hosting fees, anyone can establish an online radio station. No FCC license, no broadcast tower, no expensive tape decks or remote broadcasting trucks. Already, an estimated 450 professionally run Internet-only companies operating thousands of online “channels.” Another 2,250 web sites run by broadcast stations that simulcast their programming.
Online radio today is reminiscent of the early days of the Internet. The audience is overwhelmingly male, educated and higher-income. Accordingly, this audience has a very high buyers’ ranking for CDs, cars, homes, computers and travel. But this audience is also very small. Barely 10 percent of the U.S. adult population listen to “online radio.”
So this game has only just begun. We gauge the streaming-audio audience at roughly 20 million people1 and the advertising side of this business for both streaming audio and banner placement at $35 million2, or 0.3 percent of the $10.5 billion spent this year on Internet advertising. As many as half of these online listeners have come on board in the past year, pushed mainly by relentless online marketing by AOL, Yahoo and MSN for their online radio networks. MSN has taken a square aim at local listener affinities by allowing them to select an MSN radio channel “similar to” the call letters of local radio stations. Local traffic and weather reports – which are remarkably easy to come by – are likely to come next.
Where this goes is anyone’s guess. “Up” would be a safe bet. If history provides any lesson, it’s likely that Internet-only stations will begin to peel away a sliver of broadcast radio’s audience over the next several years, and that advertising dollars will follow that audience, growing nearly tenfold (to $320 million) over the next five years. Our bet, based on historical trending of other media affected by Internet usage, is that a significant share of radio’s daytime audience will be lost to the Internet over the next five years. And despite any effort to create their own Internet radio sites, traditional broadcasters won’t be the ones to recapture that lost audience.
Customers who bought this item also bought
Radio Trends: On Air and Online
Internet Radio Makes Waves
Marketing to the Online Video Audience
Radio Industry - Global Strategic Business Report
Local Online Video Advertising
The Market for Web Radio 2008 - 2012
Video Advertising Online: Spending and Audience
Online Content Aggregators-AOL, Google, Yahoo!, MSN, Apple-Slowly Defining The Future of Television
Digital Movie Marketing: Engaging the Online Audience
Local Online Advertising: Measuring the Market
Net Music Radio 2007 - 2010: Listening Hour Analysis By Site and Brand
Internet Music Radio 2001 - 2006: The Brands and the Beat Go On
|
|
|
|
