Note: We've updated this post here with additional information.
Has Internet Radio stopped growing?
We first raised the question last month in this space after Arbitron released research that showed no growth in the number of people listening online.An analysis of Ando Media trends has raised additional questions about the future of Internet radio.
Pandora has orchestrated a magnificent public relations coup to become the face of Internet radio. The New York Times, Washington Post, and Wall Street Journal have all given the service priceless publicity, and as a result subscriber numbers have exploded to over 50 million.
Because so much of the news about Internet radio has focused on Pandora, one would naturally assume that Internet radio is rapidly growing. Pandora, however, is far from typical. It is Internet radio’s superstar.
To see whether Internet radio has peaked, we have to look beyond Pandora. We need to look at a service that isn’t the favorite of mainstream media.
AccuRadio is a 430 channel Internet-only service in operation since 2002. It bills itself as the next generation of radio.
It is one of the few services that consistently shows up on Ando Media’s top 20 online services, so we can track its performance.
The graph shown to the left is AccuRadio’s performance going back to May 2009. It trends the service’s global performance in session starts, average sessions, and TSL. We have indexed each trend to the service’s May 2009 numbers to see all three trends on one graph.
AccuRadio offers Christmas programming during the holiday season, which explains the spike in December as well as a bump in November. To understand the underlying trend, one has to look at the pattern outside the holiday season.
Session starts are up 10.5% over the period. However, average sessions are down 6.8%, and time spent listening is down over 20%.
These are world-wide numbers because Ando Media has only recently begun breaking out domestic numbers. Domestically, AccuRadio is down 6% in session starts in 2010. Average sessions are down 2%.
These are not estimates subject to wobbles. Ando Media counts IP addresses at the services’ servers, so any change is real, and not due to sampling error.
This is only one service, but by Internet standards, it is a large service. It is also one that we can trend. And it certainly raises questions about the long term potential for Internet radio.
Interestingly, the performances of the top terrestrial streams are up for the year. Excluding CBS (which includes AOL and Yahoo LaunchCast in its numbers), the top terrestrial streams are up over 5% in average streams.
Additional evidence comes from the latest Nielsen Web numbers.
Nielsen tracks monthly sessions, web sites and pages visited, and the time spend on line. All the numbers have flat-lined or declined.
People spend about two hours a day online, about the same as last year, and a slight decline from 2008. The number of web sessions and domains they visit are essentially unchanged.
The web has matured. It is no longer a source of fascination. It is no longer a novelty.
How is this possible given the meteoric rise of services like Twitter and Hulu? Despite new services, people still spend the same amount of time online. They are simply redistributing their online time to accommodate new services.
On the computer, Internet radio is really competing with other online services, not local radio stations. And it isn’t gaining any ground.
Internet radio understands this. It’s why there’s a rush to get on smartphones and in automobiles. Less competition.