Half of U.S. Internet users, or about 96 million people, listened to music on an Internet radio or on-demand music service in the past three months. Of those, more than a third listened to music on Pandora and other Internet radio services, while an equal percentage (36%) used an on-demand media service, like YouTube, Vevo, Spotify, MOG, Rhapsody and Rdio.
That’s according to the NPD Group, a market researcher, in its Music Acquisition Monitor.
The audience for Internet radio grew 27% year over year, as the on-demand music audience increased by 18%, according to the findings. NPD concludes that as listening via Internet radio and on-demand listening rises, the number of consumers listening to music on CDs is falling to 16%. At the same time, the music audience for AM/FM radio fell 4%, and the number of consumers listening to digital downloads declined 2%.
“AM/FM radio remains America’s favorite music-listening choice, however Internet radio and streaming services have replaced CDs for second place,” according to NPD SVP Industry Analysis Russ Crupnick. NPD expects this pattern to continue, as consumers become more comfortable with ownership defined as a playlist, rather than as a physical CD or digital file.
NPD’s Music Acquisition Monitor revealed that since 2009 the percentage of Pandora users who also listened to AM/FM radio declined by 10 percentage points, those listening to CDs on a non-computer device fell 21 percentage points, and listening to digital music files on portable music players also dropped 21 points. Part of these declines can be attributed to the fact that 34% of Pandora users are now listening to that music in their cars — either connecting through an in-car device, or listening via car-stereo-connected smartphones or other personal listening devices.
Although listening to music on YouTube and Vevo generally appeals to a younger audience, NPD noted similar changes in traditional patterns among these users, since 2009. Among YouTube and Vevo users, CD listening on players and in cars dropped 22 percentage points, listening to digital files on portable players declined 17 points, and listening to AM/FM radio fell 12 points.
NPD’s Music Acquisition Monitor is based on survey data from more than 4,000 people.