Streaming advertising revenue projected to triple in 10 years (SNL Kagan)

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SNL Kagan generously sent RAIN News a copy of its annual Economics of Internet Music and Radio report. The 41-page document (available to subscribers; click here for info) provides a detailed overview of major players, growth projection in revenue terms for webcasting traditional radio and pureplay internet radio (and how the two trendlines compare), and an outlook for in-car listening.

The headline metric in this graphics-infused report is that ad-supported internet radio (pureplay only, not including terrestrial webcasting) is projected to nearly triple from $1.6-billion in 2015 to $4.7-billion in 2025. that upward-driving curve includes double-digit percentage growth through 2020, then diminishing incremental growth in single digits to 2025.

In the context of this projection, SNL Kagan also tracked what that revenue slice represents as a percentage of “total U.S. radio station ad revenue.” That marker rises through the project term to 24% in 2025. At that time, pureplay online radio ad revenue will claim about one-quarter of the annual U.S. radio business.

Terrestrial radio has its own internet-delivered business, of course, which in SNL Kagan’s accounting totaled one-billion dollars in 2015. Growth is projected, to $1.7-billion in 2025. That number represents 8.4% of “total U.S. radio ad revenue.”

The takeaway is that pureplay ad-supported streaming in on a faster-growing track, and furthermore, will claim a growing percentage of the radio advertising business.

The report notes that revenue growth, while vigorous, will decelerate over time. SNL Kagan observes that smartphone penetration might be nearing saturation, and also documents the demise or transformation of some streaming companies (e.g. Rdio’s dissolution and Songza’s acquisition by Google).

Triton Digital’s ratings metrics are quoted extensively, and SNL Kagan has assembled a profile for many internet streaming brands. The new CRB rates are analyzed, and there is an M&A section.

When it comes to the connected car, now and in the future, the report acknowledges that most people use traditional radio, but that habit will change. “As more cars add connected features, the radio’s stronghold on the dash will begin to erode as music will just be one of the perks to having a connected car that offers additional features such as navigation, remote diagnostics, voice controls and safety enhancements.¬†The connected car is changing the way consumers look at cars with dashboards that are increasingly able to personalize and contextualize content to each individual user.”

Brad Hill