The Holy Grail for the future of the music business, we’re told, is billions of people around the world paying a monthly subscription fee for digital audio services.
But new data out of the US suggests that nation’s motorists just aren’t ready to play ball. And that’s a worry. Because according to estimates, there’s more than 210m of them.
According to research from trusted pollster Ipsos, an overwhelming majority of American drivers still prefer listening to free AM or FM radio in their cars instead of digital services such as Pandora, Spotify and Sirius XM.
Ipos’s survey of thousands of 18+ drivers concluded that 84% of Americans continue to use AM/FM radio as their in-car audio entertainment over new digital options.
The scariest stat for the likes of Spotify, Sirius – which charges around $30 a month – and the music business at large?
Of those US consumers who do stream audio in their car, says Ipsos, less than one-third are paying anything at all.
And it gets worse: 80% of those who currently choose to listen to free in-car streaming digital audio options say they would not be willing to pay for it in the future.
“We’re certainly seeing reluctance amongst americans to pay for music in the in-car environment.”
Thomas Spinelli, Ipsos
Pandora currently boasts just under 80m active monthly listeners, but only around 3.5m of these are believed to be premium subscribers.
Meanwhile, subscription-only music and talk radio digital service Sirius XM clocked up 27.3m paying subscribers in 2014.
Of the consumers Ipsos polled that still listen to AM/FM, 62% say that they listen to the radio at least once a day in their cars and 67% say they turn on their AM/FM radio as soon as they put on audio in the car.
Other key findings from the Ipsos study:
- The majority (64%) of Americans still use a CD player in their car, keeping an average of 10.5 CDs in their vehicle.
- However, the majority of US drivers, 68%, say they haven’t purchased any new CDs in the past year.
- Interestingly, only 22% of those who aren’t buying new CDs say it’s because they are replacing discs with digital services. Most either don’t want any new CDs (27%) or find CDs to be too much money (23%).
“The in-car environment is unlike any other when it comes to media behavior,” says Thomas Spinelli, Vice President with Ipsos MediaCT.
“Our studies show that despite all the technological advances we’ve made when it comes to digital listening, the vast majority of Americans still prefer AM/FM radio overall and especially expect it to be a part of their cars – in fact, virtually all said they wouldn’t buy a car without a radio.”
“We’re certainly seeing reluctance amongst Americans to pay for music in the in-car environment,” continues Spinelli. “The ability to listen to free music is important to Americans, as is their comfort with their current AM/FM setup.
“However, as new vehicles roll out, many of which are equipped with built in digital music services, we may see a shift in how Americans are thinking about listening in their cars.
“That being said, the overwhelming current popularity of radio illustrates that advertisers and marketers may want to think more buttons and knobs than bells and whistles – at least when it comes to the in-car environment.”
This data incorporates results from a previous Ipsos/iHeartMedia online study fielded in January 2015 (sample size of N=1,036; US 18+ representative to Census) with new findings from an independent Ipsos Online Omnibus conducted March 18-19, 2015 (sample size of N=1,005; US 18+ representative to Census).Music Business Worldwide
