Who Killed Radio?

Back in the day, as you drove off the dealer's lot, you turned on the radio. And that radio stayed on, all the time, for the life of the vehicle. Whether or not you were actually listening to it, the sound of the radio was as reassuringly present as the purr of the motor. That is changing.

Q: how do you tell the age of a car's driver?  A: You just listen. No, it's not how loud the exhaust is, or if they're listening to an oldie's radio station. It's whether they are listening to any radio station at all. Increasingly, listening to a radio station marks you as a geezer.

A survey of 7,600 consumers conducted by the NPD Group in the last quarter of 2012 reveals an unmistakable trend. Teens and young adults are tuning out AM/FM radio and turning to internet streaming "radio" services such as Pandora. By the numbers, for listeners aged 13 to 35, streaming accounts for 23% of their listening, a 17% increase over a year ago. To radio's credit, 24% of their listening was to radio, but this is a decline of 2% over a year ago. In the 36 and older bracket; radio is 41% of their listening, while streaming is only 13% Traditional radio certainly isn't dead. It's just getting old.

The kids favor Pandora with 39% listening to the free version; 11% listening to iHeartRadio, and 9% using Spotify. About half of the users access streaming with their phones. About 20% of the listeners listen to streaming in their cars, long a towering stronghold of traditional radio. About half of the kids say they listen to most of their music in cars.

Interestingly, because of music royalty fees, Pandora has started limiting free mobile listening to 40 hours per month. They say that will affect fewer than 4% of their listeners, so it probably won't signal a migration back to traditional radio. If anything, the heavy users will probably just switch to another streaming service when they hit their quota.

Radio isn't the only content provider feeling the heat. Consider these numbers from the same poll: In addition to AM/FM at 24% and internet streaming at 23%, listeners aged 13 to 35 prefer: digital files, 15%; on-demand, 14%; CD, 9%; satellite, 5%; other, 10%.

For now, by the slimmest of margins, in this survey, AM/FM radio still held the top spot among younger listeners. But for how long? With streaming trending up 17% and radio trending down 2%, streaming may have already replaced radio as the favorite music source.

It's too soon to tell if Pandora killed radio. But one thing is for sure. She opened the box.