The Audio Medium: To Radio and Beyond A Special Report from Media Group Online, Inc. Radio Rules Reach Weekly Total Users 18+, by Medium, Q1 2018 Much as TV is now part of the larger visual media Media Platforms Total environment (and still the largest part), radio must also Radio 228.5 M share people’s ears with newer audio choices, such as streaming music services and podcasts. Live, DRV and time-shifted TV 216.5 M App/Web on smartphone 203.8 M TV may still command the largest amount of the average Video on a smartphone 127.6 M daily time adults 18+ spend with all media outlets, according to Nielsen’s Q1 2018 Total Audience Report; Streaming audio 68.5 M however, radio still rules audience reach, at 92% Satellite radio 35.7 M compared to TV’s 88%. Podcasts 21.9 M Nielsen, April 2018 Weekly Reach of Users 18+, by Media Percentage, Q1 2018 Another perspective on radio’s reach is how the monthly number of AM/FM radio listeners 18+ compares to various Media Platforms Percent types of Websites. Radio 92% Live+time-shifted TV 88% Monthly Total Users 18+, AM/FM Radio vs. App/Web on smartphone 79% Websites, June 2016–November 2017 Internet on a computer 60% Source Total App/Web on a tablet 47% AM/FM radio 243.38 M Internet-connected device 35% Search sites 197.51 M Game console 15% Social media sites 179.22 M DVD/Blu-ray device 15% Video sites 143.56 M Nielsen, July 2018 E-commerce sites 143.55 M Comparing the total adults 18+ provides another News sites 105.12 M indication of radio’s reach. Sports sites 57.65 M Nielsen, April 2018

Despite being the oldest broadcast medium, radio is still one of Americans’ favorite daily media choices and this Special Report from Media Group Online explores how it maintains its importance within the burgeoning audio world. Nielsen research has also found 87% of Americans Tune-in Time listening to AM/FM radio have just three favorite stations, and 58% listen to just one favorite station, with 19%, An examination of AM/FM radio’s monthly reach by second favorite; 10%, third favorite; and 14%, least selected generations, age groups and gender reveals all favorite stations. exceed 90%. Given the amount of time Americans are outside the home – commuting, working, shopping, leisure activities, etc. –, Total Persons and Monthly Reach of AM/FM it shouldn’t be surprising that 65% of them listen outside Radio, by Selected Demographics, March 2018 the home from 6am to 7pm weekdays. Total Monthly Demographics Persons Reach AQH AM/FM Radio Listening by Location and Millennials (18–34) 71.61 M 95% Daypart, 2017 Generation X (35–54) 80.56 M 97% Outside Daypart Home Baby Boomers (55–64) 41.23 M 98% Home Teens (12–17) 23.59 M 94% Mon–Sun 6am–midnight 32% 68% Adults (18–49) 131.60 M 96% AM drive 6am–10am 35% 65% Men (18–49) 65.65 M 95% Midday 10am–3pm 26% 74% Women (18–49) 65.95 M 97% PM drive 3pm–7pm 25% 75% Adults (25–54) 123.40 M 97% Evenings 7pm–midnight 43% 57% Men (25–54) 61.30 M 97% Weekends 6am–midnight 41% 59% Women (25–54) 62.11 M 98% Nielsen, December 2017 Nielsen, April 2018 In addition, 76% of radio listeners 18–64 work and those who are employed full-time listen 2.5 hours more per week than the unemployed. Of course, the peak times of the day in terms of average quarterly hour (AQH) for radio listeners employed full-time are 7am, at approximately 16.5, and 4pm, at approximately 15.3. For those unemployed, the AQH peaks are 12pm and 3pm, both times approximately an 11.0 rating. Ad Revenues

BIA/Kelsey 2018 US Local Advertising Forecast reported local radio ad revenues would be $15.7 billion, or a 10.4% share, placing it fourth behind direct mail, $38.5 billion; local TV, $20.8 billion; and mobile, $19.0 billion.

Local radio ad revenues will only increase 1.3% from 2017, with online’s increase from $1.3 billion to $1.5 billion, or +15.4%, primarily responsible. Local radio will continue to experience these modest gains during the next few years, with a projected 2022 total of $16.7 billion.

Advertisers are expected to spend more money with audio streaming services, as during the first half of 2018, Pandora’s revenues increased 66% and Spotify by 40%.

The pg. 2 Audio Medium: www.mediagrouponlineinc.com To Radio and Beyond Other demographic indices for heavy radio listeners include:

• Employment – Full-time, 118, and not employed full- time, 84

• Ethnicity – Caucasian Americans, 97; , 106; and Latinx Americans, 109

• Education – High school or less, 93; one to three years of college, 103; four-year college degree, 115; and some graduate credits or advanced degree, 92

• Income – Less than $50K, 98; $50K to $100K, 99; and Radio’s Most more than 100K, 106

Loyal Fans Clearly, “heavy radio listeners” does mean more than just AM/FM radio to those in this group, as more than 60% Edison Research and Triton Digital, in their Heavy Radio listened to online audio. Listeners Report (April 2018), define “heavy radio listeners” as those persons 12+ who “listened to radio for more than one hour during the past 24.” These 30% of Weekly Online Audio Listening respondents in the survey while those who listened to radio Among Heavy Radio Listeners, for one hour or less were 37% and those who did not listen January/February 2018 to radio during the past 24 hours were 33% of respondents. Source Percent When viewing the following information, it’s important to Listen to online audio 63% remember that “listen to radio” doesn’t necessarily refer YouTube* 44% to AM/FM radio. Edison and Triton allowed respondents to define “listen to radio” themselves. Pandora 29% Streams of AM/FM 20% Men indexed higher than women as heavy radio listeners, Podcasts 17% or 108 and 92, respectively. Unsurprisingly, adults 55–64 had the highest index compared to other age groups. Spotify 16% iHeartRadio 13% Indices of Heavy Radio Apple Music 9% Listeners, by Age Group, Amazon Music 6% Edison Research/Triton Digital, April 2018 January/February 2018 * includes listening to music and music videos only Age Group Index 12–17 51 18–24 89 25–34 104 35–44 114 45–54 120 55–64 125 65+ 74 Edison Research/Triton Digital, April 2018

The pg. 3 Audio Medium: www.mediagrouponlineinc.com To Radio and Beyond Hot Formats

According to Nielsen’s Audio Today 2018 report (April), the Country music format, which includes Country and New Country, was the top format, with 13.2% of total listeners 12+ during fall 2017. News/Talk Combined (commercial and non-commercial) was second, at 12.3%; followed by News/Talk Commercial, 8.3%; Adult Contemporary (Adult Contemporary and Soft Adult Contemporary), 8.1%; and Pop (CHR), 7.1%.

A comparison of Adult Contemporary and News/Talk audience shares from February 2017 to February 2018 reveals an increase for Adult Contemporary and a decrease for News/Talk among the three age groups measured.

Adult Contemporary and News Talk Audience Shares, by Age Groups, February 2017 vs. February 2018 Adult News/ News/Talk Contemporary Talk Age Group Feb. Feb. Feb. Feb. 2017 2018 2017 2018 During most summers, Classic Hits and Classic Rock compete for the top format of the June–August period, Persons 6+ 7.7% 8.4% 10.5% 10.4% compared to the first five months of the year. Not only Persons was Classic Rock the fastest-growing format during 7.1% 8.1% 4.7% 4.2% 18–34 summer 2016 and 2017, but also achieved a 5.2 share Persons during June 2018. 7.3% 8.2% 7.9% 7.3% 25–54 Classic Hits performed even better during June, with a 5.9 Nielsen, March 2018 share in PPM markets, the highest since Nielsen began tracking national format ratings. Classic Hits was the Nielsen’s data then reveals the favorite AM/FM radio fastest-growing format during summer 2014 and 2015. formats among selected demographics during March 2018, based on average quarter hour share.

Top Three AM/FM , by Selected Demographics, March 2018 Millennials Gen X Boomers Share Share Share 18–34 35–54 55–64 Country 15.6% Country 12.6% News/Talk 15.0% Pop CHR 12.9% News/Talk 9.4% Country 12.8% 6.7% Adult Contemporary 7.9% Classic Rock 9.1% Teens Adults Adults Share Share Share 12–17 18–49 25–54 Pop CHR 19.1% Country 14.0% Country 13.1% Country 12.7% Pop CHR 10.7% Pop CHR 8.7% Hot Adult Contemporary 8.5% Adult Contemporary 7.2% News/Talk 8.3% Nielsen, April 2018

The pg. 4 Audio Medium: www.mediagrouponlineinc.com To Radio and Beyond The Multicultural African Americans’ Top Formats, by Age Group, Audience Fall 2017 Age Group Format/Share With the projected increases in US ethnic populations Persons 12+ Urban Adult Contemporary/29.6% during the next 30 years, it’s important to understand the composition of their audio use. Teens 12–17 Urban Contemporary/32.7% Adults 18–34 Urban Contemporary/32.8% The ethnic composition of the national radio audience Adults 18–49 Urban Contemporary/28.2% (persons 12+) as of June 2018 was African Americans, 13.6%; Latinx Americans, 16.8%; and other, 69.6%, which Adults 25–54 Urban Adult Contemporary/27.1% includes anyone who is neither African American or Latinx Adults 35–64 Urban Adult Contemporary/33.5% American. Nielsen, July 2018

Radio’s weekly reach among African Americans is the Latinx American Radio Data and Demographics same as the overall population, or 92%; however, among Latinx Americans, it is even stronger, at 96%. (Nielsen • Gender – Men, 53%, and women, 47% includes Asian Americans among its total population data, but not separately.) • Weekly Use – 42 million

Weekly Reach of Radio, by Total Persons 12+ and • Weekly time spent with radio – 12 hours, 45 minutes Ethnicity, 2014–2018 • Top daypart – 10am–3pm, Mon–Fri African Latinx Year Other American American • Listening location – At home, 28%, and outside home, 72% 2014 31.1 M 40.0 M 172.7 M 2015 31.2 M 40.2 M 173.1 M • Employment – Full-time, 58%; part-time, 15%; not 2016 31.7 M 41.2 M 173.9 M employed (retired, student, etc.), 27% 2017 32.3 M 42.4 M 174.8 M 2018 32.3 M 42.3 M 173.2 M Latinx Americans’ Top Formats, Nielsen, July 2018 by Age Group, Fall 2017 Age Group Format/Share African American Radio Data and Demographics Persons 12+ Mexican Regional/16.1% • Gender – Men, 47%, and women, 53% Pop Contemporary Teens 12–17 Hits/16.7% • Weekly Use – 32 million Adults 18–34 Mexican Regional/15.0% • Weekly time spent with radio – 13 hours, 32 minutes Adults 18–49 Mexican Regional/17.5% (the most of any ethnicity) Adults 25–54 Mexican Regional/18.3% Adults 35–64 Mexican Regional/18.0% • Top daypart – 3pm–7pm, Mon–Fri Persons 12+ English Pop Contemporary • Listening location – At home, 34%, and outside Dominant Hits/11.2% home, 66% Persons 12+ Spanish Mexican Regional/26.2% Dominant • Employment – Full-time, 52%; part-time, 15%; not Nielsen, July 2018 employed (retired, student, etc.), 33%

The pg. 5 Audio Medium: www.mediagrouponlineinc.com To Radio and Beyond For professional football, the comparison numbers Sports on the Radio are for Washington, DC (Summer 2018 survey), New Despite sports fans’ attraction to TV to watch their favorite Orleans, LA (Winter 2018 survey) and Pittsburgh, PA teams, sports radio formats also attract a fair share of (Spring 2018 survey). audiences, given a majority of people listen to radio • The New Orleans Saints of the NFL attracted the outside the home. largest percentage of the market’s base population to the radio dial for its games, or 12.7%. During the June–November 2017 period, audience shares for sports-formatted stations increased more than 30%, • Of the 2.3 million adults 18+ in the Pittsburgh market, even among Millennials. Nielsen attributed these increasing the home of the Steelers, 10.6% listened to the games numbers to the start of the fall football season and on the radio. whenever the Major League Baseball season ends with playoff teams (league championships and World Series) • Somewhat surprisingly, given the rabid fanbase of the playing all the scheduled games to determine the winners. Washington Redskins, just 2.3% of the Washington, DC population listened to the games on radio. Audience Share Trend*: Sports Radio Format, Editorial credit: / Shutterstock.com June–November 2017 Persons Persons Month Persons 6+ 18–34 25–54 June 4.0% 3.1% 4.3% July 3.9% 3.0% 4.2% August 4.1% 3.3% 4.4% September 4.6% 3.6% 4.8% October 5.2% 4.4% 5.6% November 5.3% 4.3% 5.7% Nielsen, December 2017 *Average Quarter Hour

Data from recent surveys from The Media Audit reveals some interesting comparisons for cities with “crazed” college and professional football fans.

• Of the three college football cities compared, Columbus, OH (Winter 2018 survey) and its fan base for the OSU Buckeyes have the largest percentage of the base population (adults 18+) listening to the games on the radio during the past 12 months, or 11.2%.

• In Austin, TX (Spring 2018 survey), the home of the University of Texas Longhorns, 6.0% of the population were listening to the games.

• Seattle is the home of the University of Washington Huskies. According to the Winter 2018 survey of the Seattle-Tacoma market, 6.9% of the base population listened to the team’s games on radio.

The pg. 6 Audio Medium: www.mediagrouponlineinc.com To Radio and Beyond Editorial credit: / Shutterstock.com Streaming Audio Advances

A variety of measurement standards generally shows Spotify to be the #1 streaming audio service among Americans, with Apple Music #2. As of the end of October 2017, Spotify had approximately 18.2 million paid subscribers to Apple Music’s 15 million.

During February 2018, various reports forecast the number of Apple Music paid subscribers would equal Spotify by July 2018; and, according to a July report from Digital Music News, Apple Music did exactly that, with both services having approximately 20 million US subscribers.

Although Spotify became a public company during spring 2018, it doesn’t have the deep pockets of Apple, Amazon (Amazon Music) and Alphabet (Google Play Music), all of Among heavy radio listeners, based on the Edison which can afford to operate their music streaming services Research/Triton Digital report, the audio streaming at slimmer margins and offer low-priced subscriptions. services story is quite different, as Pandora is first in monthly and weekly use. iHeartRadio’s streaming Apple also has an advantage, given its iPhone is the #1 service also attracts more heavy radio listeners, most seller in the world, which has put Apple Music in the #1 likely because they hear promotions on iHeartRadio- position among mobile streaming music users. affiliated stations.

Streaming Music Services, by Heavy Radio Listeners’ use of Streaming Audio Services vs. All Radio Monthly Mobile Users in the Listeners, January/February 2018 US, March 2018 Listened During Last Listened During Last Month Week Service Total Audio Streaming Service All Heavy All Heavy Apple Music 49.5 M Listeners Listeners Listeners Listeners Spotify 47.7 M Pandora 31% 37% 23% 29% Pandora 36.8 M Spotify 20% 20% 16% 16% SoundCloud 34.2 M iHeartRadio 11% 18% 7% 13% Google Play Music 21.9 M Apple Music 10% 10% 9% 9% iHeartRadio 19.9 M Amazon Music 9% 8% 6% 6% Amazon Music 12.7 M SoundCloud 9% 8% Shazam 10.6 M Google Play All Access 6% 7% 5% 5% SiriusXM 7.6 M Edison Research/Triton Digital, April 2018 TuneIn Radio 6.6 M Statista, 2018

The pg. 7 Audio Medium: www.mediagrouponlineinc.com To Radio and Beyond Innovations The Public Trusts Radio News A 2017 Kantar Media study revealed the public trusts and Trends “radio news bulletins or programs” more than other media when measuring the impact of hearing “fake news” in Because the car, truck and SUV are where people listen to political and election coverage. radio the most, they can be an excellent source of data for many local advertisers, including auto dealerships. Public’s Trust in Media When Hearing About Drive Time Metrics has created relationships with “Fake News” in Political and Election Coverage, automakers and the third-party suppliers of vehicles’ audio systems to collect data from those with an October 2017 embedded cellular modem. As of March 2018, Trust Trust Trust approximately 12 million vehicles had this device, but Media/Source the More Less this will increase to 17 million by 2020, or 95% of all Same purchased vehicles. Radio news bulletins or 24% 48% 28% programs Not only does the service measure listening data of broadcast, Internet and satellite radio, but also CDs and Printed news magazines 23% 55% 22% stored music. While a vehicle is running, Drive Time Metrics Websites or apps of 22% 54% 24% collects data every 60 seconds. Of the greatest potential national newspapers interest to advertisers is the collected data is both time- Websites or apps of 19% 55% 26% stamped and indicates a vehicle’s location via GPS. news magazines

Another innovative radio measurement service is Rhiza, 24-hour news channels 18% 52% 30% which Nielsen purchased during April 2017. It has Printed national daily or 18% 55% 27% attracted the attention of auto dealerships too. With Sunday newspapers Rhiza, a dealership can see an overlay of radio listening Printed local newspapers 16% 63% 21% with Polk’s data on registration, title information and new Websites or apps of TV vehicle transactions. 15% 48% 37% or radio companies Television news bulletins 13% 58% 29% or programs Average across 19% 54% 27% mainstream media Messaging apps 20% 31% 49% Online-only news outlets 10% 50% 40% Social media 11% 35% 54% InsideRadio (Kantar Media), November 2017

Sources: Nielsen Website, 8/18; BIA/Kelsey Website, 8/18; Media Village Website, 7/18; Reuters Institute Website, 8/18; Radio+Television Business Report Website, 8/18; Edison Research Website, 8/18; InsideRadio Website, 8/18; The Media Audit Website, 8/18; Statista Website, 8/18;e Billboard Website, 8/18;Slate Website, 8/18.

Prepared: August 2018

© 2018 Media Group Online, Inc. All rights reserved.

The pg. 8 Audio Medium: www.mediagrouponlineinc.com To Radio and Beyond