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April 26, 2011, noon

Internet radio might keep FM company, not kill it

You may have heard the worries of public radio leaders: When in-car streaming radio gets better, it’ll be a serious threat to all those stations built around a terrestrial FM signal. Is that true? Arbitron, the radio ratings authority, says one in five Americans (22 percent) is streaming audio on a weekly basis, and the number of people doing so in cars has nearly doubled from a year ago.

A study released yesterday by research firm knowDigital — based on interviews with about 30 heavy streamers in the Raleigh-Durham area who commuted a half-hour or more per day — found that listeners tend to stream Internet radio as a complement to, not a replacement for, AM/FM radio. Most report starting their listening day with terrestrial radio before switching to an Internet stream. And listeners tend to reserve Internet radio for longer drives, not five-minute trips to the dry cleaner. That would seem to corroborate a data point from an earlier Arbitron report: A whopping 89 percent of online radio listeners still used over-the-air radio.

Why? “They all still wanted to be connected to locale,” knowDigital president Sam Milkman said, a need that Pandora and Howard Stern can’t satisfy. Listeners in the study reported turning to FM radio for traffic, weather, news, and morning shows — the kind of local programming that public radio stations can still deliver. Ex-NPR CEO Vivian Schiller, in her advice to stations last week, said local programming will be the strongest way to remain competitive.

Moreover, many participants reported streaming traditional radio stations through their smartphones, even though the hassle-free FM equivalent is often available right there in the dashboard. Those participants said they preferred what they perceived as the higher quality of the static-free streaming version. “Get your app going,” Milkman advises local stations. “Sell the idea that you’re available anywhere, anytime.”

Finally, the listeners interviewed said they only wanted a handful of streams, even given the Internet’s endless choices. The researchers asked participants to pick 10 inputs for a mock car stereo. No one filled up all of the available slots; most programmed no more than five. The most popular presets were, in order: a smartphone, an FM radio station, an input for the consumer’s digital music library (e.g. an iPod), Pandora, and a second FM station.  “You better fight for your brand and your position right now,” Milkman said. “People aren’t going to program 27 presets on their dashboard.”

Photo by S. Diddy used under a Creative Commons license.

POSTED     April 26, 2011, noon
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