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Pandora, iHeartRadio Familiarity Grows in Q2

NPD Group says online radio, on-demand services remain fastest growing form of music consumption in U.S.

Online radio and on-demand services remain the fastest growing form of music consumption in the U.S., according to market research firm NPD Group.

Consumer awareness of Pandora’s free ad-supported radio service represented half of all Internet users in Q2, while one-third were also aware of the company’s paid subscription service, Pandora One.

Clear Channel’s iHeartRadio followed with 25% awareness; Spotify’s consumer awareness reached 19%, which is double the level observed since its 2011 launch.

Half of the respondents who were aware of Pandora actually used the service during second quarter, while a quarter of Web users who recognized iHeartRadio or Spotify also used these services.

“Despite increased usage of streaming radio and on-demand services, the market for digital ownership is still growing as the market evolves from the desktop to the pocket, and Apple remains well positioned as the market leader,” said Russ Crupnick, senior vice president of industry analysis for the NPD Group.

Nearly a decade after introducing consumers to the original iTunes Music Store, Apple continues to dominate the scene for paid digital music downloads and for all music purchases in the U.S. In the second quarter of 2012, iTunes boasted a 64% share of the digital music market and 29% share of all music sold at retail, which includes both digital and physical formats. NPD expects the digital music market to grow by approximately 10%, on a unit basis, in 2012.

NPD surveys use data from U.S. Internet users age 13 and older.