The global market for Internet Radio is projected to reach US$3.9 Billion by 2024, driven by changing consumer preferences, increasing penetration of Internet, proliferation of smartphones and expanding user base.
Technological innovations, ever-increasing content and quality of programming have contributed to renaissance of radio in the recent decades. While terrestrial radio continues to dominate radio broadcasting in several markets worldwide, the conventional radio format has been losing ground in recent years to digital radio. Benefits of tuning into favorite radio stations through a multitude of personal devices such as computers, portable wireless devices, or other dedicated Internet radio devices has contributed to inclination of radio consumers towards Internet Radio. Explosive growth of Internet-connected devices, increasing smartphone penetration, falling prices of Internet bandwidth, declining cost of streaming and changing consumer preference towards online streaming services are major factors fueling the growth in consumption of Internet Radio services. The ability to access radio stations irrespective of user's geographical location and access to thousands of radio stations and songs are driving popularly of Internet Radio, worldwide. Increasing preference for personalized radio content as against genre-specific radio services is another factor driving growth. Growth in popularity of Internet radio is also driven by continued expansion of content, use of algorithms to understand consumer music preferences and expansion of geographical reach and genre from service providers' end.
With growing number of listeners consuming music and news on-the-go through their internet-connected mobile devices, advertisers are increasing their ad budget allocation to mobile advertising thereby driving advertising revenues in the Internet Radio market. Most internet radio services worldwide are either offered as a free service or paid subscription. While the endeavor of internet radio companies is to convert/increase number of users to paid subscriptions, ad-supported free internet radio streaming dominates the market. Ad-supported Internet radio services comprise slew of banner, audio and video ads played between tracks. Incremental targeting opportunities, lower advertising load in comparison to terrestrial radio, and expanded advertising opportunities in the form of video and display advertising are driving advertising revenues in Internet Radio. The multitude of unique features that accompany subscription models are increasingly attracting Internet Radio consumers towards this model, albeit from a lower base. Despite growing revenues, high royalty rates and smaller ad spending from advertisers and companies in this platform compared to terrestrial radio are restraining market growth. Consequently, service providers are constantly changing the revenue model mix for their services in order to improve their revenues and profits. Growing popularity of on-demand music streaming is another factor restraining market growth due to growing popularity of this service.
The U.S. represents the largest market worldwide. Popularity of radio, growing shift towards digital radio and better quality of Internet connectivity are some of the factors driving consumption of Internet radio in the country. Asia-Pacific ranks as the fastest growing market with a CAGR of 23.8% through the analysis period. Although nascent in many countries in the region, Internet Radio is gaining popularity on the back of increasing Internet connectivity, significant growth in smartphone sales, emergence of 4G and rising consumption of music streaming.
Major players in the market include 8tracks, AccuRadio, LLC, Amazon.com, Inc., AOL Radio, Apple Inc., Deezer, DI.FM, Google Inc., iHeartMedia, Inc., Napster, Pandora Media, Inc., Slacker, Inc., SomaFM.com, LLC, Spotify Ltd. and TuneIn among others.