Online radio listening jumped by one-third in 2014.

RADIOINK
March 10, 2015

Listening to online radio grew by roughly one-third in 2014, as tuning to both broadcast radio streams and online pureplays became more of a regular habit for more Americans. The number of Average Active Sessions in the domestic U.S. during the Monday-Friday, 6am-8pm daypart shot up 31.7% from the first quarter to the fourth quarter, according to Triton Digital. Growth in the total week, 6am-12 midnight daypart was even larger, up 34.7%. Both numbers represent historic highs. Triton describes internet radio’s 2014 trend as "steady growth, quarter over quarter." The ongoing shift away from listening on desktops in favor of mobile devices continued, with 2014’s growth driven entirely by mobile listening. Weekday Average Active Sessions on mobile devices increased by 47.5% while desktop tuning declined by 4.2% percent. The increases were also titled in favor of pureplay streams, which experienced a 49.5% mobile increase while broadcast streams grew by 13.5%. The new census-based listening metrics reinforce self-reported data released by Triton and Edison Research last week, which showed over half of the U.S. population (53%) now listens to online radio monthly and 44% tune in weekly. "Online radio consumption is now a majority activity" Triton Digital president of market development John Rosso said. "It’s the significant growth in consumption among those aged 25 and older that is driving growth overall."

Saga Communications’ Ed Christian sees "a calm river of business, with no apparent rapids or rocks just yet." The company is pacing down 0.5%-1% for the first quarter, not unlike where the industry stood this time last year. But with 2016 election talk already heating up, Christian suggested "things could be changing near the end of 2015, hopefully for the better." Political brought $22.2 million in radio revenue for Saga during 2014’s fourth quarter, which helped its net radio revenue grow 6.5% to $30.5 million. Quoting financial columnists and cracking jokes ("Saga in 2015 will be offering only antibiotic-free commercials"), Christian asked investors on yesterday’s results calls to step back and view broadcasting through a wider angle lens. "Certainly 2014 wasn’t a jump up and shout-out year," he noted. But it also wasn’t a great year for other industries. It was the ninth straight year where the U.S. economy grew less than 3%, he noted. New business formations are at a 35-year low. Despite falling gas prices, retail was down in the first two months of this year. "And yet with all this negative information, broadcasting is up or flat," Christian said. "Like it or not, that’s a win and a vote of confidence for what we do for our advertisers. Radio and TV advertising works and it offers a great return on investment." Christian said radio and TV get unfairly slammed as "outdated and outmoded" from pundits who fail to see the correlation between the economy and broadcasting’s performance.

Salem says radio’s in a ‘turf war’ with digital. Could lower gas prices and an improving job market finally be having an impact on marketers? The jury’s still out, but over the past few weeks Salem president of broadcast media Dave Santrella says he’s seen an uptick in spot spending from clients ranging from Home Depot to regional car dealer associations. "That may be a result of what they feel looks like an improving economy," he said during a conference call with analysts. It may not be enough to save the quarter. Salem Media Group estimates revenue will decline 1% to 3% during the first quarter. That follows a flat fourth quarter for its radio division as year-end revenue grew to $266.5 million for the company overall. On a larger scale, Santrella sees a "turf war" going on for ad dollars pitting radio against digital media. Nowhere was that more evident during Q4 than with the political ad category. CEO Ed Atsinger thinks the evidence is clear those dollars shifted to digital with a 39% drop in political spending compared to when the last mid-term election occurred in 2010. "Radio and TV audiences are holding up very well, some of the dollars are not," Atsinger said. He said Salem sales teams are working to figure out how to play up radio’s strengths in ways the web can’t duplicate for candidates. "We are back to the drawing boards, working on proposals that play to those strengths, and we hope that we can get some of those dollars back," he said.