A new Nielsen white paper shows that audio streaming services in the U.S. -- and four European countries - have potential but lack growth. However, the scope of the company's survey may have led to results that are at odds with generally accepted trends in the U.S., not least because its sample period ended more than two months before the Stateside launch of Spotify.
Nielsen tracks 18 services in the U.S., including Pandora, Last.fm, Rhapsody, Napster, Slacker and iHeartRadio. The active reach (a metric Nielsen did not define) of all 18 services was 10.2% in April 2011, unchanged since November 2010.
Nielsen used a very short window to show the state of the U.S. streaming market, and other pieces of evidence and studies depict a different picture of streaming growth and penetration in the U.S. Pandora now claims an active monthly user base of 36 million in the U.S., or 11.6% of the entire U.S. population -- that's just one service of many. Slacker CEO Jim Cady told Billboard.biz in May the service had "about 25 million listeners," which works out to 8% of the entire U.S. population. Maybe there's overlap there, but their self-reported numbers suggest online radio is regularly reaching more than 10.2% of the U.S. population.
A recent Arbitron paper, "The Infinite Dial 2011: Navigating Digital Platforms," from a January 2011 survey found that 34% of people surveyed had listened to Internet radio in the previous month and 13% listened only to Internet-only streams in the previous month (as opposed to online streams of AM/FM stations).
Not only is Internet radio's audience fairly larger, but it has doubled every five years, according to Arbitron. The percentage of people surveyed who listened to online radio in the preceding week has risen to 22% in 2011, from 12% in 2006 and 5% in 2001. Arbitron's view of Internet radio growth covers a 10-year time period, while Nielsen's looked at only six months in the U.S.
Changes in music discovery could be a factor in Nielsen's assessment of a flat streaming market in the U.S. For example, MySpace is losing impressions and streams to other services such as Facebook. Nielsen tracks MySpace but not Facebook. Nor does it track YouTube, whose videos are shared by Facebook users, or Facebook marketing apps like RootMusic and DamnTheRadio that stream an artist's music.
One thing Nielsen's paper clearly shows is that more young women are using streaming services and listening hours is up in some markets. In the U.K., for example, the average user listened for 1:11:00 per month, up from 52:00 per month a year earlier. Spotify users were especially active listeners - they reached 2:00:00 in February. Nielsen's U.S. numbers do not include Spotify, which launched over two months after the latest period covered in the Nielsen survey.
But Nielsen found that audio streaming in the U.K. is typical in its lack of growth. Active reach was flat in the U.K. from April 2010 to April 2011 (only Spotify, Last.fm and We7 were tracked). Spain has a higher active reach - about 18% to 19% -- but it too has been flat (serviced tracked are Myspace.com, Los40.com, Last.fm, Rockola.fm, Yes.fm, Vagos.fm, Last.fm and Spotify). France has see the active reach of audio streaming drop from about 16% in April 2010 to just below 14% in April 2011 (Deezer, MusicMe, Last.fm and Spotify were tracked there). The lone gainer of the group was Germany, which rose to 5.5% in April 2011 from 3.9% in April 2010 (tape.tv, Last.fm and Simfy were tracked).