How is the Growth of Music Streaming Services in Canada Affecting Radio Listening?

The quick answer? It isn’t.

Yes, online-only music streaming services have shown dramatic growth over the last couple of years in Canada. But the latest results from our Radio on the Move study don’t show any impact on listening to broadcast radio. In fact, it’s becoming increasingly clear that music streaming is cutting into listening to personal music, not broadcast radio.

We`ve been tracking in-car audio consumption in Canada with Radio on the Move since the connected car became a talking point back in 2010. Among other things, we have seen that radio has maintained a steady share—accounting for roughly two thirds of all in car listening—over the past six years.

Now, thanks to the support of Canada’s new radio marketing body, Radio Connects, we have expanded the scope of Radio on the Move to look at listening outside the car as well. And that is, in turn, giving us a more unobstructed view of the full audio landscape.

Here’s what we see when it comes to the rapid growth of online-only music streaming services. There are two big growth drivers: first, the increasing amount of time we spend with our smartphone; and, second, the arrival in Canada of on-demand services like Spotify, Google Play and Apple Music.

In the past four years, our Radio on the Move tracking shows that weekly and daily listening to music streaming services on smartphones by Canadian drivers/passengers, across all locations, has increased four-fold.  That’s a pretty robust increase. But a lot of this has as much to do with the amount of time we are now spending on our smartphones as it does with online music streaming services.

Smartphones are carving out a whole new time and place for people to listen to all types of audio. Past week listening to podcasts on smartphones has grown from 4% four years ago to 11% in this past Fall’s Radio on the Move. And yes, they are even listening to a lot more AM/FM radio on their smartphones, from 4% listening a week four years ago to 9% this past Fall. Our love affair with smartphones is expanding the size of the pie for audio consumption—and that provides opportunity for all audio, including live and linear radio broadcasts.

The growth of music streaming is also being fueled by the new on-demand services. It’s only been two and a half years since Spotify first arrived in Canada and, with it, our first real taste of having an almost unlimited music library just a tap away. Google Play, Apple Music and Tidal have followed, and collectively these new on-demand services are changing how personal music is being consumed, and where the music industry gets its revenues. As on demand music streaming grows, online and offline music sales are dropping. Nielsen reports that on-demand streaming in Canada grew by more than 200% from 2015 to 2016. Meanwhile, song sales dropped by 23% and album sales by 18%.

Who’s streaming music? It’s still mostly younger demos. Among adult Canadians we surveyed in Radio on the Move who say they listened to online-only music streaming services in the past 24 hours, nearly two thirds (64%) are aged 18-34. That translates to more than one quarter (27%) of 18-34 year olds who say they listened to an online music streaming service in the past 24 hours—an impressive amount, but one that still pales compared to the 83% of 18-34 year olds who say they listen to broadcast radio on a typical weekday.

Equally important, we see no evidence that the growth of streaming is displacing listening to radio, even among the 18-34 year olds who represent the largest proportion of online music streamers. Canadians aged 18-34 who stream online music services say they spend as much time listening to AM/FM radio as other 18-34 year olds.

With easy, instant access to any music or other audio we want, whenever or wherever we are, Canadians are listening to more audio than ever before. We may indeed be entering a new golden age of audio. And radio remains poised to continue playing a key role, limited only by its ability keep its ears and its mind open to all possibilities in the new audio landscape.