Internet Streamers, Radio, Ratings, The Numbers Game ...

 A Monday Morning White Paper from Gregg:

While they are doing well, obviously the Internet-only services, such as Pandora and Spotify are comporting their stories in a manner that shines the best light on themselves.  We’re hearing news everyday about the great strides Internet-only streams are making in developing significant audiences.

It is important to understand the differences in measurement techniques to be able to defend traditional (terrestrial) radio’s strength.

Although streaming media services are a factor in today’s marketplace, we shouldn’t let their “smoke and mirrors” distract from common sense and good math.   

What THEY Are Saying …

- “1 in 5 listen to online radio” …

- “Services like Pandora, now have listenership numbers that compare to terrestrial radio in many, including some very large, US markets.

What WE Should Know About What THEY are Saying  …

Ironically, perhaps by happy-accident, Arbitron’s PPM technology is more sophisticated than Internet services, who can measure outgoing streams, to the infinite degree quantitatively.  In actuality, the streamers have no idea who is listening, or even if their streams are unattended.

Meanwhile, radio listening estimates never have had anything to do with if a radio is simply on.

From diaries to people meters, radio estimates are about human beings … quantifiable human beings and their listening habits.

- Suggesting 1 in 5 listen online, is impressive.  Keep in mind, that when one drills down, the statistic refers to a survey of Internet Users, which the study sets at, a still impressive, 80 percent of the total population.

Of course, terrestrial radio always refers only to the total population with ratings.  It would be fair to discount the streamers’ own number by 20 percent, meaning less than 1 in 6 (aka: 16%) of the total population listen online.

20 percent is a statistically significant variation.  They (the streamers) are not readily sharing demographic, psychographic or life-style details.

Finally, from their “1 in 5″ (or adjusted “Less than 1 in 6″)  claim, it cannot be assumed that people who are listening online are NOT actually listening to their local radio station.

- It is not a safe assumption that all online listeners come at the expense over-the-air radio stations … It is more than likely many online listeners were lured away from personal music devices rather than traditional radio stations.

What Their Numbers DON’T  Mean …

The online streamers, who are releasing their numbers are not going to any effort to quell conclusions, that after a quick read of their statistics, someone might jump to — in error.

- Their numbers DON’T mean 16% of Total Persons are listening online at any ONE TIME … any more than any cume audience for any station listens at the same time.

- Their numbers DON’T mean that 16% of Total Persons are listening to any ONE STREAM … of the thousands of streams (tens of thousands by many estimates) available at any given moment.

- Their numbers DON’T mean that 16% of the Total Persons who listen online do so exclusively … to the exclusion of terrestrial radio stations.  (It doesn’t even mean that people who listen to Internet streams for as long as they do (TSL) with on-air radio.)

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Major Points

It is Not Good to “Mix and Match” …

Arbitron has been honing the process of audience measurement for decades.

In the Radio-Info article referenced below, they examine the major differences between online and over-the-air audience measurement.

Here are some key discussion points that can be helpful when defending on-air broadcasting’s established audience measurement techniques:

 - Online advertising is presented in a completely different fashion …  Online listeners expect less ads and the ones that are delivered are not nearly as “forefront” as ads delivered by on-air radio stations.

- Each stream will, in many cases be delivered a different ad … no matter what the wholesale listening number are, the reach numbers for an individual advertiser will be less impressive.

Highly-targeted ads, such as those touted for their efficiency by streaming audio services are not automatically well-suited for every category of advertiser.  (For example:  How can an advertiser looking to articulate a need and a solution, such as a lawyer, a medical specialist or a car dealer promoting an event, benefit from lazar-sharp targeting?)

 - Almost all online listening estimates use proprietary approaches to audience measurement … meaning an “apples to apples” comparison should not be attempted.

 - “Time Served” is not the same as “Time Spent Listening”

- Radio ratings services generally publish their survey methods … Without the equivalent information for the estimates of Internet music services, comparisons are not advisable.

- The nature of most online streams — especially music programming — is far more likely to be employed as background … This may change over time, as in-car technologies make Internet listening easier in cars.

 - Internet music services use “self-reported” registration data.

Although listener demographic information may be collected by a streaming service, few endeavor to share that specific data.

Unless a streaming music service employs some form of validation, it is not possible to know if the information provided is correct.  (For example, if a person uses more than one account, it could impact any measure of Internet music service reach or cume because a single person could be counted more than once.)

- Happily, traditional, terrestrial radio is still, almost exclusively more local than the vast selection on online streaming audio offerings.

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Finally, Remember, All Online Streaming Audio is not “Radio” !!!

From Kurt Hansen, a radio and Internet industry expert:

Pandora and other brands of Internet radio are modern versions of radio: [...] some combination of people and computers at a distance from you is creating programming for the enjoyment of numerous listeners.

Spotify and Rhapsody, on the other hand, are modern versions of your music collection: You have access to a large library of songs and you can listen to them on demand in the order you want to listen to them

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Meanwhile … online streams are starting to use terms like AQH and Cume.

On the other hand, we should learn their vernacular and be able to speak in their language too — a not unimportant defensive tool, especially when dealing with advertisers who a more digitally-oriented.

Meanwhile … some audio streamers are claiming enormous AQH figures in major metro markets.

If we’re not prepared to crunch their numbers “apples to apples,” they can make favorable impressions, to which they are not entitled.

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Related

Arbitron Unveiling Arbitron Mobile …

Arbitron has acquired Zokem Research in the hope of leveling the playing field for companies that need to review audience estimates and to understand how consumers are using mobile devices.

The thinking is Arbitron hopes its expertise in survey methodology will complement  Zokem’s mobile technology, mobile measurement expertise.

Their Goal:  A better understanding of how consumers rely on their mobile devices and services. 

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References:

Don’t Mix & Match Ratings at Radio-Info.com

Internet Future Report at Annenberg School  for Communication

More Than 1 in 5 Listen to Online Radio at KurtHansen.com … (How the online industry sees things.)

All Online Music is Not Radio at Kurt Hansen.com

Arbitron Acquires Zokem Oy, Mobile Audience Measurement and Analytics Firm … Press Release

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