Digital-to-Car Integration the Largest Threat to CDs and Broadcast Radio, Since the Dawn of Digital Music

According to The NPD Group, Americans still listen to music on AM/FM radio more than any other choice, but streaming music via smartphones is gaining ground.

PORT WASHINGTON, NEW YORK, October 19, 2011 – According to a new report from The NPD Group, a leading market research company, due to the amount of time Americans spend on the road, the traditional formats of radio listening and using CDs in the car remain the dominant methods consumers use to interact with music. Nearly two out of three Americans say that the majority of their music listening takes place in the car. Even so, adaptive-streaming and on-demand-streaming radio is now gaining more traction in the market, complementing the pay-per-download format popularized by services like iTunes and AmazonMP3.

“A tipping point is approaching when vehicles and portable devices move from a tethered connection to a more integrated one,” said Russ Crupnick, senior vice president and entertainment analyst for The NPD Group. “Smart devices streaming music could end up being the largest threat to CDs and broadcast radio since the dawn of digital music.” 

According to the latest update to NPD’s “Entertainment Trends in America” report, 80 percent of music listeners listened to music on the radio in the prior three months, a decline of two points since last year. More than half (53 percent) listened to music in their cars on CDs, which is down four percentage points over the prior year. Nearly a third (29 percent) listened to music using a smart device -- including the iPod touch, iPhone, or Android smartphone -- an increase of nine percentage points since last year. The 3.5 hours per week consumers spent listening to music on smartphones also rose 9 percent compared to a year-ago; whereas listening to music on CDs and dedicated portable music players declined by a similar amount.

The information in this press release is based on The NPD Group’s “Entertainment Trends in America” report, based on 10,058 completed surveys from qualified respondents (age 13 and older) conducted in Q3 2011. Final survey data was weighted to represent U.S. population.