According to a recent NPD survey, Pandora-style internet radio and “on-demand” services like Spotify and Rdio replaced CDs as the second-most popular way to listen to music, trailing AM / FM radio format.
For the quarter ending in June, the audience for Internet radio services in the United States, which include companies such as Pandora Media, grew 27 percent from the same period a year earlier, NPD reported. In comparison, on-demand services such as Spotify, YouTube and Rhapsody, grew 18 percent over the same period.
Web radio stands to be an important money maker and it’s not hard to figure out why the music sector and Pandora Media are preparing to go to war with each other.
Pandora is supporting legislation that would lower the royalty rates that Web radio services pay labels and artists to play music. The music industry, which had scheduled a pow wow last night to discuss how to battle Pandora’s legislation, says that the sector has been shrinking for more than a decade while Pandora’s executives are banking millions. They say creators can’t take any more hits.
Here’s some stats from NPD’s survey:
AM/FM radio remains America’s favorite music-listening choice, streaming services and Web radio have replaced the CD for second place.
Since 2009, the percentage of Pandora users who also listen to AM/FM radio declined by 10 percentage points.
Listening to digital music files on portable music players also dropped 21 points.
NPD said that contributing to part of those declines was Pandora’s successful move into automobiles. The research company said that 34 percent of Pandora’s users are now listening to the service in their cars.
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