September 5, 2007
Digital Media Forges Deeper Cuts into Traditional Radio
Each September one of Bridge Ratings' broadcast clients commissions a study of predictive media behavior for the fourth quarter.
The purposes are many, but the key metric our client is interested in is the consumption of music and electronics heading into the holiday season.
In recent years, trends in media behavior have shown increasing differences from that of the rest of the year. New releases in tech equipment, entertainment and consumable media itself tend to fuel these differences.
Apple's introduction of a refreshed line-up of iPods, for example, will provide a significant boost in retail activity. Other tech companies understand the importance of fourth quarter consumer behavior as an indicator of holiday sales. And, as fourth quarters go, quite often for most retail businesses, so goes the entire year.
This study was conducted during the month of August 2007 with a panel of 2533 persons 13+*.
Overview
Users of MP3 players and Satellite radio, in particular, continue to find increasing time to spend with these technologies. 31% of satellite radio subscribers - fueled by heavy listening by "introductory satellite radio subscribers" - expect to be listening more over "the next three months". 22% of MP3 player owners expect to be using the device more.
A net 10% of the traditional radio listeners in the study expect to listen to more radio in the coming three months. The gross number of listeners to traditional radio who said they expected to listen to more radio in the fourth quarter was actually 25%.
The net increase of 10% was due to 15% who indicated they expected to listen to less radio.
Traditional radio's fourth quarter boost will be primarily fueled by talk and news/talk radio listeners who intend to listen more in an effort to be more knowledgeable about the coming elections.
Increased interest in news/talk radio this year is coming three months earlier than in previous election years.
Portable Music Players
The MP3 player market will get a massive infusion of users and use during the fourth quarter with manufacturers bringing multiple new product versions to market. The fourth quarter has always experienced a surge in purchasing and this will greatly enhance the over consumer use of these products.
As Bridge Ratings has discovered in the several studies we have done on consumer use of iPods and MP3 players, initial use of these players by new consumers especially, is at least 25% higher in the first six months than it is by the twelfth month use.
This year's influx of new models will enhance overall use in the heavier quintiles in the chart above.
Overall, Bridge Ratings estimates that 22% of MP3 player users will increase their MP3 time-spent-listening this fall.
Traditional Radio
Time spent with traditional radio is charted above. Those listeners to AM/FM radio who listening more than 14+ hours per week indicate in this study that they will be listening less while those who typically consume less than 13 hours per week radio should spend slightly more time with the radio this fall.
10% of the sample predicts they will be spending less time with an AM or FM station this fall.
Satellite Radio
Almost a third of the Satellite radio sample estimated they would be listening more this fall.
According to continuing studies by Bridge Ratings, the average time-spent-listening by consumer of Satellite radio continues to increase over time. This is a function of primarily two sets of Satellite radio listeners Bridge Ratings has defined as:
"Introductory Consumers" of Satellite radio - those who are relatively new to the technology and continue to discover its advantages, and
"Mature Usage Consumers", those who have owned or listened to Satellite radio for more than a year.
Both of these groups represent the largest increase in time-spent with Satellite Radio.
The average is brought down by those in the middle, where "consumer fatigue" sets in or consumers reach a reduced level of usage as they pass a literal "discovery flat line".
"Discovery flat lining" can best be described as reaching a comfort zone with the technology after discovering all the positive and negatives through trial and error. In this six month period between the newness factor and the mature factor, consumers of Satellite radio tell us they often tend to return to other forms of media such as MP3 players and even traditional radio for a "return to the familiar".
The above chart reflects the change in time-spent with satellite radio by the entire group with the listeners with the heaviest consumption projecting increased use this fall.
Internet Radio
17% of Internet Radio listeners indicated they would be listening to Internet Radio more "in the next three months".
Internet net radio use is nearing 27% of the U.S. population and should reach that number (82 million per month) by the beginning of 2008.
Internet radio's heaviest users (14+ hours per week) tell us they'll likely be spending slightly less time listening this fall while those who traditionally have been spending between 4 and 13 hours a week with Internet radio should be listening more.
Podcasting
Podcast listening is gaining momentum as the following charts show. We asked our podcast listener panel in June if they had listened to a podcast in the previous 30 days. At the time, 63% said they had.
In August we asked them if they expected to listen more often or if they intended to listen to more podcasts in the next three months. 71% indicated they would listen more.
In fact, the number of Americans who are regular listeners of podcasts has increased 40% since January 2007 with ten million having listened to at least one podcast in the last seven days.
Cell Phone Mobile Media
The most significant change in use of audio media determined by this study is the cell phone universe where users of all ages are adopting the multi-media options offered by mobile telephones.
In the last study we did of cell phones and its users, 16-24 year olds were by far the most active users of cell phone applications such as text messaging, instant messaging, video and audio playback and Internet surfing. The results of this study reveal consumer behavior surrounding these cell phone "additives" is clearly moving into regular use by those 25+.
Every category of mobile phone user has seen large gains in adoption since June 2006, with the biggest adoption in the following areas:
How to read: In June 2006, 25% of respondents said they played video games on their cell phones. This number grew to 34% in August 2007.
Cell phones have clearly passed beyond being simply telephones across most demographics. Even those ages 55 and over are now using some of these new technologies at least once a week.
Final Thoughts
Digital media use will continue unabated in the fourth quarter of 2007 as technology choice for consumers becomes even more profound.
Of all the technologies studied in this project, the cell phone continues its march toward dominance as the one device that can satisfy multiple needs for most age groups. Cell phones that double as music playback devices continue to grow in popularity and even video playback and video streaming - previously of little interest to consumers - is showing signs of improved acceptance.
Convergence of all the media in this study is occurring and we see a time in the not-too-distant future when a hand-held media center will be the preferred consumer choice. As mobile carrier networks become faster, Wide-area Wi-Fi becomes commonplace and cell phone manufacturers figure out how to put it all together, these devices will be more pervasive than any other device in history.
Over 80% of Americans carry and use a cell phone on a daily basis. Half of them also use those phones for some other activity such as email or photo sharing.
At the present time, mobile phones present the greatest challenge to not only traditional media, but also maturing digital media such as stand-alone MP3 players and satellite radio.
Sample: 2533 persons 13+, national random telephone interviewing, 20% of sample was cell phone-based
For more information or questions, contact Dave Van Dyke at Bridge Ratings. dvd@bridgeratings.com or 818.291.6420.
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