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Does it Pay to Listen Online?

Does it Pay to Listen Online?

The NPD Group looks at Internet radio trends and how listeners are utilizing the medium. Online radio is the fastest growing music listening option among U.S. consumers, increasing by more than 18 million listeners in 2011.

The NPD Group looks at Internet radio trends and how listeners are utilizing the medium.

Online radio is the fastest growing music listening option among U.S. consumers, increasing by more than 18 million listeners in 2011.

According to The NPD Group's Annual Music Study, 43 percent of U.S. web users chose to listen to music via Pandora, Slacker, Yahoo! Music and other online radio options, which is 9 percentage points higher than the previous year. At the same time listening to music on AM/FM radio stayed relatively steady (84 percent) in 2011, as did CD listening (74 percent).

Listening to free online radio is most popular among young adults ages 18 to 25, and strong listener growth is also occurring among the 36- to 50-year-old age segment.

Consumers are overwhelmingly opting for free ad-supported online radio options, and consumers' conversion to paid versions of online, on-demand radio remains low. While 42 percent of web users listened to free radio options in 2011, just 3 percent paid to listen to radio online.

The draw of unlimited online radio listening and music discovery is much more compelling to consumers than performing the same activities on social media sites, according to NPD. Just 12 percent of web users listened to music integrated into Facebook or other social networks by services like Spotify and MOG.

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