Younger Consumers Turn Up Digital Music Listening - eMarketer
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Younger Consumers Turn Up Digital Music Listening

Revenues from digital music formats to grow 14% from 2012

April 11, 2013

Internet radio is running on terrestrial radio’s coattails, according to a report by market research company The NPD Group. The Q4 2012 study, which surveyed US consumers ages 13 to 35, found that AM/FM radio is still the primary method for music listening, cited by 24% of respondents. However, internet radio is just behind with a 23% share. CDs fell to account for a lowly 9% of music listening, and satellite only accounted for 5%.

Primary Method Used to Listen to Music According to US Internet Users, Q4 2012 (% of total)

Of the streaming services used by US music listeners, Pandora’s free service dominated, in use by 39% of respondents. Pandora was trailed by iHeartRadio, Spotify’s free version and Grooveshark.

Streaming Music Services Used by US Music Listeners, Q4 2012 (% of respondents)

NPD made note of the rising impact of mobile on music listening. In another study released in February 2013, the research firm found that already 56% of US smartphone owners used their smartphone for listening to music. And of that group, 65% used internet radio apps like Pandora, above the 60% who listened to their own music catalogs and 30% who used on-demand services like Spotify.

What’s more, 39% of those listeners plugged in to smartphones to listen at least once per day. And 54% reported spending more time using their smartphone to listen to music than did so a year ago.

Mobile Music Activities of US Smartphone Owners, 2013 (% of respondents)

Interestingly, NPD found that among the 13-to-35 age group, the car is still where the majority of respondents did most of their music listening. This draws attention to in-car infotainment systems, many of which now integrate digital music services like Pandora. Additionally, a common practice is to plug in a smartphone while in the car, and to stream music content through the phone.

According to the Recording Industry Association of America (RIAA), industry revenues from digital music formats grew 14% in 2012 from the prior year. RIAA notes that the bulk of digital revenue came from access models—services in which users have access to a music library catalog, rather than purchase individual songs or albums. Access models include paid subscription services and non-subscription streaming services.

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