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New Report Looks at U.S. Streaming, Finds Pandora the Clear Leader

A new report from Edison Research and Triton Digital takes a close look at the U.S. music streaming market, and finds many have some catching up to do.

Apple’s overhaul of Beats Music, whatever that might entail, will have to pull the on-demand subscription service out of America’s music-streaming basement. “The Infinite Dial 2015” report from Edison Research and Triton Digital shows Apple’s Beats Music ranks last in reported usage.

The U.S. music streaming market can be broken down into three segments: the leader, the followers and the laggards. (Neither Edison Research nor Triton Digital named those segments, by the way.) Pandora is the clear leader. It has the highest brand awareness (75 percent) and the highest monthly usage (45 percent). In this context, usage means a service receives any use in a given period. It does not denote quantity of songs or minutes streamed.


Three services qualify as followers: iHeartRadio, iTunes Radio and Spotify. iHeartRadio ranks third in brand awareness (59%) and second in usage (17%). iTunes Radio climbed to second in brand awareness (72%) in fewer than two years and ranks third in brand usage (16%). Spotify brand awareness ranks behind two laggards (41%) — one an e-commerce giant — but ranks fourth in brand usage (13%) and has by far the best numbers of an on-demand subscription service.


The top two services in the laggards group lack users but have name recognition. Amazon Music has 42% awareness but 7% usage. Rhapsody, a veteran music streaming service, has 41% awareness and 5% usage.

Google and Apple, the next two companies in the laggards group, both had modest awareness but light usage. Google Play All Access had 30% awareness and 5% usage. Beats Music had 27% awareness and just 3% usage.

Adding insult to injury, Beats Music has the distinction of being the least effective at converting awareness into listening. A simple ratio of awareness-to-listening based on the reports’ numbers can be taken as an indication as a service’s ability to convert awareness into listening. Beats Music’s awareness/usage ratio of 9.0 is higher than Rhapsody’s 8.2, Amazon Music’s 6.0 and Google Play All Access’s 6.0. Spotify has the best ratio of 3.15. Perhaps because it’s a free service, iTunes Radio does a better job turning awareness into listening with an awareness/usage ratio is 3.88.

Music streaming continues to grow in popularity. The Edison/Triton survey found 53% of people surveyed, or 143 million Americans, stream music every month, up from 47% last year. Weekly listeners increased to 44% of people surveyed, up from 36% a year earlier. One figure ran counter to many examples of growth in music streaming. Although the number of weekly music streamers increased substantially since last year, the time spent streaming music each week declined slightly to 12:53 from 13:19.

The big question of 2015 is how the on-demand streaming market will shake out. Spotify is well-capitalized and with a large lead. Deezer is well-funded, but still behind in the United States. How long some other competitors exist as standalone companies — expect mergers and acquisitions to continue — will depend in part on the success of Apple’s re-entry into on-demand music streaming.

iTunes Radio could be the toehold that gives Apple a chance in the on-demand streaming market. A cursory look at the report might suggest Apple needs to grab Spotify’s youthful audience. That’s partially true. But the numbers also suggest there’s a large number of consumers going untouched by streaming services.

All streaming services are most popular with the youngest age group: 54% listened to Pandora in the last month, 23% listened to Spotify and 20% listened to iTunes Radio. Millennials clearly like to stream music. Apple will need to convince many of them to subscribe. But young consumers are the low-hanging fruit.

The bigger opportunity lays in the older age groups. Of people aged 25 to 54, 12% listened to iTunes Radio in the last month and 9% listened to Spotify. The 55-and-over group was practically non-existent outside of Pandora. Three percent listened to iTunes Radio in the last month and 1% listened to Spotify. Twelve percent of them said they listened to Pandora in the last month.

Apple’s great task is to bring the older age groups to its on-demand subscription service. It can’t let the download generation go the way of the CD generation.

As Russ Crupnick, previously of NPD Group and now managing partner at MusicWatch, explained in 2011, the four-year loss of CD buyers from 2006 to 2009 was 20 million people. Millions of consumers did not follow along in the shift from CDs to downloads. They were simply dropping out of the marketplace. The result was fewer people supporting the recorded music industry.

Exactly how does a company convince both young and old consumers to pay for a music service when free options exist and many still find downloads appealing? If any company can figure it out, it’s Apple.