For Immediate Release:

Wednesday May 9, 2007

Cell Phone Pervasiveness Will Influence Behavior

Bridge Ratings conducted its bi-annual study to analyze mobile phone consumer behavior and potential impact of cell phone use on terrestrial radio. Included in this study was the degree of interest by consumers in the availability of radio station audio on cell phones. The study measured interest in broadcast, Internet radio, satellite radio and podcast radio.

The study used a sample of 3506 persons ages 13+ conducted by telephone interview and internet input between February 28 and April 30, 2007.

Cell phone pervasiveness will be a significant contributor to the success of cell phone radio. Top line findings of our national study conducted between December 5, 2006 and March 30, 2007 projects that in the United States, 70% of the U.S. population owns a cell phone: U.S. population stands at 300 million, with 210 million cell phone users. In fact, today cell phone technology is the only audio-capable technology that could approach traditional radio's market penetration (currently at 93% or 276 million Americans who listen to terrestrial radio at least once a week).

As users of cell phones become more comfortable with technology they are using their devices in ways previously monopolized by terrestrial radio: distribution of information and music. In fact, at this early stage, receiving traditional radio broadcasts or accessing radio broadcast content on-demand are services of interest for a respectable 30% of our sample.

Business Week covered the topic of cell phone radio in a 2005 article titled "Dial R for Radio on Your Cell". "Just how big is the revenue opportunity [for cell phone radio]? So far, it's small because wireless networks, as well as cell-phones microprocessors and memory, have only recently become robust enough to support the service. Cell-phone radio should generate a little over $70 million in sales in 2005, estimates market researcher IDC. But those sales will mushroom as companies like major wireless network operator Crown Castle (CCI ) and other providers launch a dozen radio services in the next year."

At current expected growth rates, cell phone users will top 300 million by 2015.

This accelerated growth for cell phone market penetration will be affected by new technologies and services unknown at the time of the study, but clearly as ease-of-use for information services improves, the potential to affect terrestrial radio - especially where these services have historically been available - escalates.

The following chart shows preferred cell phone services by current cell phone subscribers. The ability, for example, to catch up on news and sports information is preferred by 28% of our panel and text messaging remains the primary service most preferred by our sample use.

Preference for a radio receiver on their cell phone has been inching up in the last two studies we've done (15%) more than those who prefer the idea of viewing television with their phone.

In our study, 76% of teens own cell phones. 40% of teens buy cell phones just for text messaging.

Improved search and GPS capabilities ranked #1 and #2 with smoother interactivity and time-shifted audio close behind as services this sample deemed of most interest.

Cell Phone vs. Traditional Radio

As cell phones continue their growth as more than simply a person-to-person communications technology, the radio industry should be aware of the implications of information now available on cell phones that used to be the exclusive domain of radio.

We asked the sample of cell phone users "Which of the following services would you prefer to receive on your cell phone and which on your AM/FM radio station?"

This chart displays the responses to the above question and while on the surface it would appear that radio is fairly dominant across the board, the underlying trends are of concern. For example, when we isolate News/Sports updates and compare this year's results from our 2005 study, preference on cell phones for this information is skyrocketing:

....and for weather updates:

Format Susceptibility

Age breakouts of the above data show certain radio formats to be more susceptible to attack from cell phone use - some with different reasons. The following chart indicates which radio formats will be affected rated on a scale of vulnerability.

On a Monday through Friday basis, CHR and Hot AC listeners tend to use their cell phones at the expense of their radio listening more than any of the formats listed with CHR listeners spending nearly 31 minutes a day less.

This data represents confirmation by this sample that traditional media is facing strong competition for time-spent-listening from media outside its normal competitive channels. While among the entire study sample, terrestrial radio fared well, trends in this study show that very specific content services formerly the strongest domain of traditional radio face further attrition or at the least additional sharing among users of traditional media.

Looking forward, cell phones should be considered a vital new component of the media landscape - one that provides consumers many, if not all, of the consumer benefits offered by radio.

Sample size: 3506 persons 13+. Sample error: +/- 1.7%

For additional information or advisement, contact Dave Van Dyke at 818.291.6420.

Study was conducted on a national geographic footprint with the following regional sample proportions: Northeast: 19%, Midwest: 23%, South: 35%, West: 23%