Many of those are either new listeners or people tuning in at times when they never listened to regular broadcast radio.
But radio has been slowest among the media industry to turn its Internet audience into cash. Gordon Borrell calls radio the "C" student of the Internet. Radio gets only an estimated 2.4% of its revenue from online, while TV gets 3.4% and newspapers 7%.
For the clients that do pay for Web commercials, radio companies haven't been able to command much in the way of rates. Advertisers who buy on streamed radio typically pay about half the rate per thousand listeners that they do for regular broadcast ads, media buyers and radio executives say.
Charitably, I guess you could term that "growth potential."
A clue from one of streaming media's A students: tight control on inventory is one of the reasons Pandora is on track to eke out its first quarter of profit in these last three months of this year, says chief operating officer Tim Westergren. He expects full-year revenue of about $40 million.
Many listeners to online audio are tuning in to Internet-only services such as Pandora Inc., which typically play far fewer ads. Pandora offers only a fraction of the ad time on digital streams of regular radio stations. "They're trying to keep it clean," says Kathy McLaughlin of planning and buying firm Media Spot Inc., which means Pandora can command high prices.
In recent research she did for a client who wanted to target Los Angeles listeners, Ms. McLaughlin found that buying spots on Pandora cost 20% more than buying regular over-the-airwaves radio spots in the city, one of the most expensive ad markets in the U.S.