Free online radio is popular, but no paid service converter

Terrestrial radio introduced our parents to Led Zeppelin and The Rolling Stones. In the 80s and 90s, MTV videos nearly killed the radio star. Now, flexible, tailor-made online music services have quickly become the next big thing for listeners tired of the sound of Big Music dragging its feet toward convenience and innovation.

According to The NPD Group, free online music services like Spotify and Pandora are more popular than ever — even among the traditionally tech-resilient older demographic. But that doesn’t mean users are throwing money at the model.

Free online radio is popular, but no paid service converter

During a 2011 survey, the research group found that the number of respondents who admitted they use a free online radio service on a regular basis grew 9 points to 43 percent.

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Breaking that figure down, the largest demographic of listeners was 18-25-year-olds who comprised 57 percent, followed closely by 26-35-year-olds at 55 percent. Two other groups, 13-17-year-olds and 36-50-year-olds, also turned in similar numbers — 44 percent and 43 percent, respectively. Internet users aged 51 and older trailed behind the rest with just 25 percent tuning in online.

According to NPD Senior Vice President of Industry Analysis Russ Crupnick, this is a good thing for record companies, musicians and consumers alike.

“Licensed online radio services are having two important effects on consumer music listening habits” said Crupnick. “Listeners are citing these services as a reason to do less file sharing, and they credit online radio with improving their ability to discover new artists.”

However, that mounting interest isn’t having much of an impact on those same services’ paid options. Of the previous 43 percent of free online radio users, only 3 percent ponied up cash for a more refined experience, the NPD revealed.

One company, Spotify, launched in the U.S. last summer after finding success in Europe. The service employs an ad-supported system so anybody can sign up and listen, but then adds benefits for those willing to drop $5 or $10/month, such as no ads and mobile support. Rival Pandora boasts a similar model.

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Do you listen to free music services online? Let us know your favorite in the comment section.

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