Apple did not use the phrase "iTunes Radio" in their late January earnings call and one has to wonder if they're disappointed with listenership or with the possibility that few are going on to purchase music on iTunes. According to a recent survey iTunes Radio listeners are purchasing but mostly on impulse and only in limited quantities. In fact, statements by survey respondents reveal that their choice of listening to iTunes Radio is to fill needs that are not connected to purchasing new music.
Brad Hill pointed out that Apple did not mention the phrase "iTunes Radio" in their last earnings call which suggests that things aren't going as planned. Otherwise now would be the time to brag about iTunes Radio given the current wide-ranging coverage of music services.
iTunes Radio is really new but they reached 20 million active users in their first 3 months. It took Pandora 8 years to get to 64 million. We'll see how big iTunes Radio gets but it's quite possible that part of the response is due to more people understanding what the heck it is without needing much of an explanation.
Music Forecasting interviewed "'audio entertainment' consumers who had already discovered the new iTunes Radio, or who sampled it at our request."
Based on these interviews they found that most consumers still buy music in some form and that they "want the ability to enjoy music in at least three ways:"
(1) through streaming radio services like Pandora and iTunes Radio,
(2) from radio stations, either over the air or online, and
(3) through their own personal collection.
"Each of these three means of consumption serves a different need in the minds of consumers. Consumers stream when they want variety and control but don’t want to have to select every song. They listen to the radio when they want someone else to do all the work and present them with a general curated playlist. And they turn to their own collection when they want to hear a specific song or playlist right away."
The survey revealed that almost all respondents were aware of the Buy button which is hard to miss if you're using the popout player.
But it also revealed that when they did buy tracks via iTunes Radio the "purchases seemed whimsical or casual and not likely to become a habit."
This is likely due to the fact that when they're listening to streaming music they're in lean-back mode and not interested in making decisions like, "should I buy this track now?"
When they are in a mindset to buy music they just go straight to iTunes. And that's a big conflict if you're thinking iTunes Radio will lead to an increase in music sales as some of us have hoped.
The study closes with a few suggestions about how iTunes Radio and other streaming services might respond to this situation and states:
"Tuning in to how and why consumers behave the way they do is the key to turning iTunes Radio into a digital sales machine."
- First Wave Of iTunes Radio Advertisers Weigh In
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Hypebot Senior Contributor Clyde Smith (Twitter/Facebook) is currently relaunching All World Dance. To suggest topics about music tech, DIY music biz or music marketing for Hypebot, contact: clyde(at)fluxresearch(dot)com.