In this week’s Programming To Win column, Richard Harker takes a deep dive into the latest Triton streaming data. With Pandora’s growth having slowed down notably, what’s next for streaming audio? What will happen with your station’s online stream? And where are the listeners going?
Richard Harker
By Richard Harker
I have both good news and bad news on the streaming front.
It doesn’t look like Pandora is going to destroy radio. Pandora’s growth is rapidly decelerating. It wasn’t that long ago that Pandora listenership was growing by triple digits.
Today growth in listenership is still positive, but down to single digits. At the rate it is dropping, Pandora growth may peak this year. And Slacker is going nowhere.
For broadcasters, that’s the good news.
But for those who thought that streaming would be local radio’s salvation, I have some bad news.
Even as Pandora’s situation worsens, broadcast streams look even worse. Broadcast streaming growth has peaked. We are now into the second year of eroding listenership
Take a look at the graph. It illustrates what’s going on.
We’ve totaled the Hours Tuned for Triton Digital’s Top 20 and plotted each month’s change from the same month of the previous year. The red line shows the combined trend for all services. The green line shows the trend of the Top 20 less Pandora.
Pandora makes up 78% of all listening in the Top 20, so the red line is a good proxy for Pandora.
Total streaming growth, as measured by Triton, peaked in July 2012 as listening doubled over 2011, up by 102%. Pandora listenership alone increased 151% over July 2011.
Since then the rate of growth of the top 20 services has steadily declined except for up-ticks in March, April, and May. Growth bottomed out at 9.6% in February, and even with the up-ticks, growth stands at 18% year-over-year. That’s including Pandora.
As an aside, if you have any doubt that Pandora growth is decelerating, you need only look at what’s happening to Pandora’s “active listener” numbers, the number of people who sign on to the service at least once a month.
We’ve superimposed Pandora’s active listener growth as reported in their monthly press releases over the Triton numbers on the graph. As you can see, in 2012 Pandora was reporting 50-60% year-over-year growth in active listeners. In May Pandora claimed active listeners were up 9% over 2013.
And this is with monthly listeners. If Pandora numbers were reported as weekly cume numbers, the declines would be much more dramatic.
So both Triton Digital and Pandora itself confirm that growth is slowing dramatically. At this rate it is only a matter of months before growth stops all together for streaming’s 800 pound gorilla.
So with Pandora’s growth slowing, is local radio streams benefitting? Not so much.
Without Pandora to prop it up, the Triton Digital trends look even worse. As the green line shows, in March of this year growth for the other 19 services stopped completely, and in the past two months listenership has actually declined.
That bears repeating. Growth for streaming services ranked two through twenty combined have less consumption today than they did one year ago. And it isn’t a fluke. The group has been in a steady decline since April of last year.
As ominous as Pandora’s trend looks, broadcast radio streaming looks even worse.
From May of last year consumption for Cumulus streaming is -26%, CBS -15%, Entercom -6%, and Clear Channel -1%.
The battle for listeners hasn’t been much of a battle. In the past four years, the 19 services competing with Pandora for listeners peaked at a year-over-year growth rate of 30%.
It means that together the radio groups, Slacker, ESPN, NPR, and a handful of others achieved a growth rate barely better than Pandora’s worst to date.
Not much to brag about.
Of course, Triton Digital measures many streams but only publicly releases the ratings of the Top 20 services. Is there perhaps a more positive story looking beyond these twenty?
Triton’s May report includes a graph of total listening hours comparing the last three years. Total listening is near 1.8 billion hours compared to slightly over 1.4 billion hours last year. Most of the gains, however, can be attributed to Pandora’s spring spike. Earlier in the year 2014 gains were trailing previous years by a significant margin.
So the malaise we see in the Top 20 appears to extend to Triton’s weaker clients.
Taken as a whole, the numbers strongly suggest that streaming as measured by Triton Digital is reaching a peak. Even Pandora as dominant as it is appears to be maxing out.
How can it be that both broadcast over-the-air Nielsen numbers and Triton’s broadcast stream numbers are eroding? Where are listeners going?
Triton only measures the streams of clients. There are many other streaming services that Triton does not measure.
The best guess is that unmeasured services like Spotify, iRadio, AOL, Rhapsody, and others are luring listeners away from both Nielsen measured broadcast stations and Triton Digital measured streaming stations.
If that’s the case, maybe just porting our stations onto the Internet isn’t the answer.
If people are looking for on-demand services, perhaps local broadcast stations need to develop distinctively different products for the Internet that combine local elements with on-demand elements.
Maybe the sweet-spot for local radio is a local Spotify-like station where listeners can create their own personalized local station?
The anemic performance of broadcast streams combined with Pandora and Slacker flame-outs suggest that we are far from determining what 21st century radio will look like.
The only thing we can safely conclude is that it won’t look anything like what we’re doing.
Richard Harker is President of Harker Research, a company providing a wide range of research services to radio stations in North America and Europe. Twenty-years of research experience combined with Richard’s 15 years as a programmer and general manager helps Harker Research provide practical actionable solutions to ratings problems. Visit www.harkerresearch.com or contact Richard at (919) 954-8300.
