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Why the Internet Radio Industry Will Blossom


According to eMarketer, the U.S. terrestrial radio industry is in deep financially trouble. Many of the country's largest national broadcasters are on the verge of bankruptcy, and the Radio Advertising Bureau (RAB) announced that Q1 2009 was the worst quarter in its history.

eMarketer predicts the radio industry will see double-digit losses in advertising spending this year alone, with terrestrial radio bringing in $14.5 billion in ad revenues in 2009, a drop of 18 percent from 2008 levels. No surprise, when you consider that car dealers have been the primary commercial radio advertiser.

In contrast, the Internet radio (audio streaming) industry are positioning themselves to take advantage of the shift in advertising spend. Even in this tough economy, Internet radio is growing ad revenues year over year and is one of the fastest-growing online media categories.

Attractive demographics (affluent listeners) and a connected audience will prove increasingly appealing to advertisers as they look for fresh channels to reach consumers.

ZenithOptimedia reports that in 2009, advertisers will spend $260 million on Internet radio and another $28 million on podcasting for a combined total of $288 million, up 28 percent from 2008. By 2011, that combined figure will reach nearly $394 million.

Though Internet radio listeners are still relatively few, millions of Americans already listen to radio online from a desktop computer, laptop or mobile phone. Arbitron and Edison Research reported in April that 42 million Americans ages 12 and over streamed online radio in a given week, up from 33 million in 2008.

That boosted current listener rates to 17 percent -- after being mired in the range of 11 to 13 percent in recent years.

For marketers, the rise of Internet radio means more targeted advertising and a more educated audience with higher income and a greater chance of being employed. Mobile will bring still more opportunities by offering streaming radio on the go via phones and other connected portable devices.

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