Streaming Media Beginning to Take Some Steps

The percentage of Internet users who have ever tried streaming media has crossed the 50 percent threshold according to a study by Arbitron Inc. and Edison Media Research.

The “Internet VII: The Internet & Streaming: What Consumers Want Next” study finds that, as of July 2001, the number of those who have watched or listened to streaming media online — the study calls them “streamies” — has risen to 52 percent of online Americans. More than one-third (34 percent) of all Americans aged 12 and older (approximately 78 million people) are classified as streamies.

“It is very encouraging to see that consumers are tuning to Webcasts in record numbers,” said Bill Rose, vice president and general manager of Arbitron Webcast Services. “The continued audience growth should provide confidence in Webcasting’s great potential despite the inevitable bumps in the road experienced by all new media.”

Another sign of a maturing streaming market is the study’s finding that the amount of time consumers spend listening to sources of audio that are available only on the Internet now equals the amount of time consumers listen to radio station Webcasts each month.

Listening to Internet-only audio has tripled since July 1999, with one-sixth (15 percent) of all Americans having ever tuned into an Internet-only channel. In addition, 12 percent of Internet users say they have listened to Internet-only audio channels and radio station Webcasts on a monthly basis.

“Radio stations that stopped streaming may have spurred the growth of Internet-only channels by driving their audience to alternative sources of online audio,” said Larry Rosin, president of Edison Media Research. “More than half (55 percent) of the listeners who tuned online to a radio station that later stopped its Webcast say they have found other sources of Internet audio to take its place.”

The uptake of streaming media is also relatively new. The study found that 56 percent of audio streamies and 49 percent of video streamies say they first began tuning to Internet audio and video in the past year.

“While the growth of the Webcast audience is remarkable, the fact that most streamies first tuned in within the last year indicates that Webcasting is still in its infancy,” said Bill Rose, vice president and general manager, Arbitron Webcast Services. “Therefore, the industry needs to advertise and promote its benefits to lure those consumers who have not yet tuned in and to spur greater use of the medium by those who already have.”

How content could turn into revenue for the content producers is a question that has followed all forms of online content from day one. The study found that 27 percent of audio streamies would be very interested in paying a small subscription fee to listen to songs or albums from their favorite artists. Both video and audio streamies are also very interested in online concerts. Almost one-quarter (24 percent) of audio streamies and 19 percent of video streamies say they are willing to pay a small fee for online concerts. Consumers also show substantial interest in subscribing to various types of sports content. In the last month, 18 percent of streamies who listen online said they are “very interested” or “somewhat interested” in paying a small fee to listen to Major League Baseball games on the Internet.

“This study reinforces that consumers believe advertising is a fair trade for free online content,” said Larry Rosin, president, Edison Media Research. “Now we also see evidence that supports streaming subscription models. Consumers show significant interest in paying a small fee for unique and compelling streamed content, just as they have shown their willingness to pay for premium channels and pay-per-view events on cable.”

The study also reports consumer preferences for “program your own”-type channels versus preprogrammed audio channels. Almost half (44 percent) of audio streamies prefer a “program your own” channel that asks them to indicate the artists they enjoy and plays music according to their indicated taste. Another 46 percent prefer a preprogrammed channel that plays the music they enjoy but does not ask the consumer for their artist preferences. Younger listeners find the “program your own” Internet audio channels more appealing with 59 percent of teens and 52 percent of 18- to 24-year-olds choosing the “program your own” channel versus the preprogrammed option.

According to the study, online listeners are equally split between their preferences for audio channels that play continuous music without disc jockeys and audio channels that have online personalities. Nearly half (47 percent) prefer the “no DJ” format and another 46 percent prefer programming “with a DJ.”

However, age makes a difference in the consumer’s preference for channels with a DJ. More than half (53 percent) of streamies 12- to 24-years old prefer channels that have personalities to announce songs and provide information and entertainment versus only 41 percent among streamies over the age of 25.

When asked which activities they are spending less time with due to the time they spend online, Americans say they are spending less time with both TV and print. One-third said they are watching less television due to the time they spend on the Internet, followed by 25 percent of magazine readers 23 percent of newspaper readers. In addition, 16 percent said they are listening to radio less because of the time they spend on the Internet.

Nearly eight out of 10 audio streamies indicate that they would listen more if they had the ability to get on-demand programming and if it were easier to find the types of content they are looking for. Nearly three-quarters of audio streamies say they would listen more if they were able to listen on a device that is as easy to use as a regular radio.

The Arbitron/Edison Media Research findings are based on a July 2001 survey. The study consists of 2,507 telephone interviews of Arbitron’s Spring 2001 radio diary keepers. The diary-based sample was drawn as a national random sample of persons 12 and over.

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