The document provides an overview of the online radio market in Germany based on a study conducted in 2010. Some key findings include: - There were approximately 2,700 online radio stations in Germany in 2010, with an annual growth rate of 57% since 2006. The majority (81%) were online-only stations. - Online radio listening peaks in the evening, in contrast to FM radio which peaks during the day. The maximum daily usage of some popular online radio stations had grown significantly from 2009 to 2010. - Over half of FM simulcast stations offered mobile apps in 2010, and mobile usage was expected to increase further with new technologies like LTE. - Six out of ten online radio providers

1. Online radio in Germany
Web R di Monitor
W b Radio M it 2010
Commissioned by the Bavarian Regulatory Authority for
Commercial Broadcasting – BLM
July 2010
y
Goldmedia GmbH
Media Consulting & Research
Dr. Klaus Goldhammer,
Dr. Michael Schmid, Christine Link
Oranienburger Str. 27, 10117 Berlin, Germany
Tel. +49 30-246 266-0, Fax +49 30-246 266-66
info[at]Goldmedia.com

2. Web Radio Monitor 2010
Contents
1.
1 Introduction
2. The German online radio market
3. Use and scope of online radios
4.
4 Mobile usage
5. Advertisement and marketing
6. Trends and forecasts
7.
7 Executive summary
(Please note: l
( l longer version i German i l d more i f
i in includes information on regulations,
i l i
legal costs, advertisement, and marketing)
2

3. Web Radio Monitor 2010
Research objectives and methodology
Client and objectives Methodology Response rates
Client: Project time frame:
A il t J l 2010
April to July FM Broadcasters
Goldmedia’s study on the use of
German online radio was Primary data research 461
+123
produced for the second time through survey of all German in 2010
for the Bavarian Regulatory online radio providers
Authority for Commercial (n=2,692) via online and 178
Broadcasting (BLM) offline questionnaires
Study objectives: Response: 609 completed
Give overview of the German questionnaires (23% )
Sent Responded
online radio market Survey period: May 04, 2010
Online Only
Quantify online radio market in – June 18, 2010
2,692
Germany through survey of all Interviews with industry
+342
providers experts and representatives in 2010
Provide market analyses and
y Secondary data through
y g
431
forecasts for online radio in online desk research
Germany Forecasts via top-down and Sent Responded
Categorisation of German bottom-up analyses
online radios by genre and type www.webradiomonitor.de Growth according to Web Radio
of service Monitor 2009
3

4. Web Radio Monitor 2010
Contents
1.
1 Introduction
2. The German online radio market
3. Use and scope of online radios
4.
4 Mobile usage
5. Advertisement and marketing
6. Trends and forecasts
7.
7 Executive summary
4

5. Value chain for online radio in Germany:
market players (examples)
Value chain: online radio in Germany 2010
Content Aggregation Sales Distribution
Di t ib ti
(~2,700 online radio (about 10 online (about 10 (about 40 service User
radio aggregators) special providers)
stations) marketers)
FM broadcasters Online radio Radio marketers Streaming provider
Online-only stations aggregators Special marketers for Internet service
Personalised services (online + mobile) online radio provider
Source: Goldmedia Web Radio Monitor 2010
b r
Further Players (Examples)
5

6. About 2,700 German online radio services in
2010, rapid annual growth of 57% since 2006
Online radios in Germany, 2006 to end of 2010 Summary
~3,200 2,692 online radios in Germany (04/10)
2,692
2 692
ns
mber of station
1,914
2,200 Goldmedia anticipates about 3,200 online
1,600 radios by the end of 2010
450 521 Annual growth of 57% since 2006
Online-only stations make up 4/5 of total
Num
2006 2007 2008 04/2009
End of 04/2010 End of stations
2009* 2010*
Sources: Goldmedia Web Radio Monitor; ALM, *Est. for end of `09 & end of `10
Number of German online radios by service German online radios by type of provider
type (04/2010) (04/2010)
Source: Goldmedia Web Radio Monitor 2010
2,192 User
Generated
Content
0,41%
Online-
Online- Only
Subbrands Streams
FM 81%
338 Simulcast
151 6%
11 Streams
13%
G
Online-Only
O li O l Simulcast
Si l t Online-Subbrands User Generated
O li S bb d U G t d
FM Content
Source: Goldmedia Web Radio Monitor 2010
6

7. Online radio offers greater variety in format than FM
radio: oldies, rock und dance are played more often
Format comparison: commercial FM broadcasters and online radios in Germany (4/2010)
Online Only
AC CHR Oldies Rock Dance
Other 3%
Streams*
(2,192 stations) 40% 7% 22% 10% 14%
Inf 4%
Online-Sub- AC CHR Oldies Rock JazzDance
Black
Other
7%
9%
Brands FM
fo
18% 13% 14% 20% 7% 7%
B
O
(151 stations)
Commercial
%
Info 6%
%
Rock 5%
%
Other 4%
FM radio AC CHR Oldies
(338 stations) 48% 17% 9%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Oldies/Easy
AC CHR Oldies/Schlager Informationen/Talk Rock Sonstiges
Other MOR Jazz Classical
Klassik Dance Black Music
Listening
* Without aggregators and user generated content . Source: Goldmedia Web Radio Monitor 2010, n=2,692
7

8. Web Radio Monitor 2010
Contents
1.
1 Introduction
2. The German online radio market
3. Use and scope of online radios
4.
4 Mobile usage
5. Advertisement and marketing
6. Trends and forecasts
7.
7 Executive summary
8

9. Usage during the day: in contrast to FM radio,
online radio is mainly listened to in the evening
Use of FM radio and online radio during the day (04/2010)
30,000
30.000 35%
31%
Example: 31% of all daily online
26,057 30%
25,000
25.000 radio station hits take place
24,683
between 18:00 and 21:00. 26%
22,369
22 369
25%
20,847 20,465 20,533
20,000
20.000
Part of coverage in percent
18,376 16,414
19,583 16,634
18%
Coverage (ma)
19% 20%
17%
20%
15,000
15.000 15,495
16% 15%
12% 11,445
10,000
10 000
10.000
10 000 10%
P
11% 10%
7,388
9% 6,310
Media Coverage (ma Radio)*
5,000
5.000
4% Simulcast S
Si l Streams 5%
5% 3,263 2,088
Online Only Sreams 1,873
1% 1,138
0 0%
05.00-06.00 07.00-08.00 09.00-10.00 11.00-12.00 13.00-14.00 15.00-16.00 17.00-18.00 19.00-20.00 21.00-22.00 23.00-24.00
* ma 2009 Radio II Update, figures in thousands
Source: ma 2009 Radio II Update, Goldmedia Web Radio Monitor 2010, n=609
9

10. Increase of maximum usage shows growth of
online radio stations, especially at the top ...
Maximum usage (hits) Ø Hits April 2010
of selected online radios (Ø per day 2010 vs. 2009)
Actual Ø hits
390,000 for
f online radios i
li di in
GER per day
350,000
350.000
Average: 7,800
hits/day/station
300,000
300.000
13,502
250,000
250,000
250.000
Simulcast Online only
200,000 6,464
Source: Goldmedia Web Radio Monitor 2010, n=609
200.000 streams streams
145,000 2,007
150,000
150.000
125,000
100,000
100.000 Simulcast Online Online
Streams Subbrands Only
FM Streams
50,000
50.000 35,000
25,000
0
Simulcast Streams Online Subbrands FM Online Only Streams
Online Only Strams
April 2009 April 2010
G
Source: Goldmedia Web Radio Monitor2010, n=609 and Web Radio Monitor 2009 n = 143,
Average daily hits per radio station according to their statements
10

11. Annual growth in visitors for radio websites:
24 percent since 2002
Market development of online radio in Germany Key facts
Average visits per month on IVW recorded internet platforms of Altogether, continuous
German radio operators (in million of visits)
G di t (i illi f i it ) visitor growth with
ii h ih
Basis: 93 IVW recorded online radio offers (incl. aggregators)
CAGR 02-09: 24 percent
25 Importance of aggregators
20.9
20 9 is increasing markedly: on
i i i k dl
20 average 3.5 million
3.5
15.9 visits/month during 2009
13.8 13.8
15 Increased spread of mobile
I d d f bil
0.7
internet (via smartphone,
10 9.0 laptop, pad) could lead to
6.9 17.4 further growth
e go
6.5
65
4.6 13.1
5 Not considered: all ranges
of online radio stations
0 and aggregators that can’t
gg g
2002 2003 2004 2005 2006 2007 2008 2009 be measured by the IVW
Radiosmeasured by IVW
Radio (IVW gemessen)
Aggregatoren (hh
Aggregators ( (phonostar, radio.de)
(phonostar, radio.de) )
dd dd)
Source: Goldmedia/IVW 2010
11

12. Web Radio Monitor 2010
Contents
1.
1 Introduction
2. The German online radio market
3. Use and scope of online radios
4.
4 Mobile usage
5. Advertisement and marketing
6. Trends and forecasts
7.
7 Executive summary
8

13. Online radio usage becomes mobile & will
establish itself on smartphones
Assessment of mobile usage Industry assessment of mobile online radio
“Online radio will be able to establish itself on 68 percent of broadcasters surveyed expect
mobile end devices in particular (e.g. iPhone)." that online radio can establish itself on
h l d bl h lf
mobile end devices in particular (decline
68% 84% 66% compared to 73 percent in 2009)
Radio broadcasters are offering more and
more iPhone online radio applications
Fully agree
Trifft voll zu
34% 32% BUT: So far, mobile ranges are <20% of
g
53% total usage
Agree
Trifft eher zu
FM broadcasters are very optimistic
Partly agree/
Neutral
34% 3 %
34% regarding mobile usage. 84% believe in the
g g g
partly di
tl disagree
potential of mobile online radio
Disagree
Trifft eher nicht
31% zu Online-only providers are more sceptical
23% 24% Fully disagree
Trifft überhaupt regarding the potential of mobile so far
nicht zu
17% UMTS successor LTE technology allows
3% 4% data rates of 150 Mbit/s or more, of which
Total FM Online Only
gesamt UKW Online Only applications such as online radio will
benefit.
Source: Goldmedia Web Radio Monitor 2010, n=609
13

14. Mobile apps are widespread: almost ¾ of FM
simulcast stations offer apps
Share of radio stations with mobile apps 2010 Industry assessment of apps
0% 50% 100% “In the future, mobile apps will be
of i
f increasing i
i importance f online
for li
radio providers."
Total
Gesamt 29.4% 70.6% 70% 89% 68%
Fully agree
Trifft voll zu
36% 34% Agree
Trifft eher zu
Simulcast Streams
UKW-Webradios 72.2% 27.8% 53%
Partly agree/
Neutral
34% 34% partly
disagree
OnlineOnline Only
Only Radios 25.9% 74.1% 39% Disagree
Trifft eher
Streams 22% 24% nicht zu
Fully
Trifft disagree
With App
App vorhanden No App
keine App vorhanden
Source: Goldmedia Web Radio Monitor 2010, n=609
Total
Gesamt FM
UKW OnlineOnly überhaupt
Online only
nicht zu
Key facts
FM online radios are most likely to have their own mobile app, and according to radio station’s
assessments, their importance will increase further in the future
Altogether,
Altogether 44 percent of all streaming offers can also be received on the mobile (4/2010)
Mobile’s share of total usage is partly up to 100%
14

15. Six out of ten online radio providers have high
expectations for the new mobile standard, LTE
Assessment of mobile broadband and LTE Conclusion
"We have high hopes for mobile broadband. LTE can 60 percent of the providers polled
promote the d l
h development of online radio."
f li di believe that LTE will i
b li h ill improve the
h
framework for online radio
significantly
59% 61% 59%
For this question, there are no
differences between the
33% 33% 33% Fully agree
Trifft voll zu responses of online-only and FM
stations
Agree
Trifft eher zu
In general, it is important for
26% 28% 26% Partly agree/
Neutral providers that both the number of
partly disagree smartphone users increases and
Trifft eher nicht zu
Disagree that flat-rate fees are offered
more frequently, making data-
31% 31% 31% Trifft überhaupt nicht zu intensive applications such as
Fully disagreep
online radio competitive
4% 4% Whether mobile online radio can
establish itself will become clear
Gesamt
Total
T t l UKW
FM Online Onlyl
Online
O li only in the near future
Source: Goldmedia Web Radio Monitor 2010, n=609
15

16. Apple platform leads app market for online radios. 60
percent of all FM online radios already with own app.
Online radios’ mobile app services and supported operating systems (04/2010)
Simulcast streams Online only streams
100.0% Apple Apple
App für 97.0%
30.8% Nokia Nokia
App für 39.4%
30.8% Blackberry
App für Blackberry 24.2%
26.9% Android
App für Android 39.4%
11.5%
11 5% Windows
App für Windows 36.4%
36 4%
With App
7.7% Symbian
App für Symbian 9.1%
9.9%
With App
60.5%
3.8% Other App App
Sonstige 9.1%
No App No App
39.5% 90.1%
3.8% Sony Ericsson
App für Sony-Ericsson 6.1%
Amount over 100% because of multiple choice. Source: Goldmedia Web Radio Monitor 2010, n=609
16

17. Web Radio Monitor 2010
Contents
1.
1 Introduction
2. The German online radio market
3. Use and scope of online radios
4. Mobile usage
5. Advertisement and marketing
6.
6 Trends d f
T d and forecasts t
7. Executive summaryy
17

18. Majority of online radio providers is already
satisfied with access figures/listeners!
Access figures of online radios Conclusion
“How satisfied are you with your online 56 percent of the German online
radio’s access figures?” radio broadcasters surveyed are
56% 72% 53% satisfied with their access figures
(compared to 55% in 2009)
21% 30% 20%
Very satisfied
Sehr zufrieden
It’s even 72 percent of the FM
35% 33% Rather satisfied
broadcasters and 53 percent of the
Eher zufrieden
42% polled online-only providers
neutral
Neutral
31% 32% Eher unzufrieden
Rather unsatisfied In comparison to 2009, satisfaction
23% 14% has slightly increased
12% 2%
Sehr unzufrieden
Very unsatisfied
Total
gesamt FM
UKW Online only
Online Only In particular, the group of “very
very
satisfieds” increased hyper-
Comparison: “satisfied”* with access figures 2009 and 2010 proportionally for both FM and
online-only providers
Online O l
O li Only 53% 2010
Online-Only
49% 2009 The FM stations’ satisfaction
72%
indicates that online radio usage is
UKW
FM perceived as an important addition
66%
*“Very satisfied“ and “rather satisfied“ with access figures
Sources: Goldmedia Web Radio Monitor 2010, n = 609, Web Radio Monitor 2009 n = 143
18

19. Every fourth online radio provider is satisfied
with the profitability of his offering!
Profitability of online radios 2010 Conclusion
“How satisfied are you with the profitability of Overall, 27 percent of the German online
your online radio?“
li di “ station providers are satisfied with their
i id i fi d i h h i
27% 28% 24% offer’s profitability. For this question, the
10% 9% 8% percentage of FM radios is greater than
17% 19% 16% Very satisfied that of online-only services
online only
Sehr zufrieden
Rather satisfied
26% Eher zufrieden Compared to 2009, a clear increase in
42% 43% Neutral
neutral
Rather
satisfaction can be observed. In 2009,
35%
Eher unzufrieden
unsatisfied only 19 percent of the respondents were
23% Sehr unzufrieden
22% Very unsatisfied satisfied with profitability, compared to
9% 12% 10% 27 percent in 2010
Total
gesamt FM
UKW Online only
Online Only Also the number of the “rather
rather
unsatisfieds” declined significantly
Comparison: total “satisfied” 2009 and 2010 (%) between 2009 (44 percent) and 2010
Source: Goldmedia Web Radio (31 percent)
27%
b
2010 10% 17% Monitor 2010, n = 609
9
Monetisation strategies begin to take
hold. Nevertheless, the economic
2009 12% 7% 19% capacity has to be improved further.
p y p
Rather satisfied
"eher zufrieden" Very satisfied
"sehr zufrieden"
19

20. Display advertisement most important ad form, online-
spot advertisement more important than sponsoring
Types of ads offered by online radio providers polled in Conclusion
percent
Altogether, 45% of
74%
% the providers fi
h id finance
Display Displaywerbung
advertisement 93% their service at least
74%
37% partly with
Spot advertisement
p Online-Spotwerbung
Online Spotwerbung 39% advertisement
37%
35% Display advertise-
Sponsoring Sponsoring 46%
35% ment is still the most
33% important ad form
Keyword marketing
Suchwortvermarktung 29%
33% for online radios
32% Total
Gesamt + (74% of providers)
Affiliate marketing
Affiliate Marketing 43%
31% Simulcast streams
UKW Online spot ads
22%
Pre-roll spot
Pre-Roll-Spot 43% become even more
21% Online-only
Online Only established with
18% streams
In-text advertisement g
In-Text-Werbung 25% online-only providers
6%
16% and become more
14%
Andere Werbeform
Other advertisement 4% important than spon-
14% soring (2nd most
Online video ad b 13% important ad form in
O li video-ad
Online-Video-Werbung
id 29%
13% 2010)
Source: Goldmedia Web Radio Monitor 2010, n=609
20

21. Online radio marketing suffers from a lack of a
uniform measurement of scope
Assessment online radio measurement Definitions
“Online radio needs a uniform measurement of
Unique listener: person who initiated contact
scope in order to market itself professionally.”
by starting an audio stream and can be
assigned to a unique client.
55% 86% 53% Tune ins:
Tune-ins: number of streams started without
being attributed to a unique listener or
Trifft voll zu
Fully agree without consideration of aborts and reboots.
32% 31% Advertising media contact: Listeners / users
e g e o e e e
Trifft eher zu
Agree that had verifiable contact with the
58%
advertising media (spot).
23% 22% Neutral
Partly agree/
partly disagree
Disagree nicht zu
Trifft eher Conclusion
33% 28% 35% Lack of documentation for online radio’s
Trifft überhaupt
y g effectiveness undermines marketing
Fully disagree nicht zu g
6% 11% 6% Nine out of ten FM broadcasters say that a
6% 3% 7%
uniform measurement of scope is essential
Total FM Online only
g
gesamt UKW Online Only
y Advertisers still have to be convinced of the
advantages of the Web
Source: Goldmedia Web Radio Monitor 2010, n=609
21

22. Web Radio Monitor 2010
Contents
1.
1 Introduction
2. The German online radio market
3. Use and scope of online radios
4.
4 Mobile usage
5. Advertisement and marketing
6. Trends and forecasts
7.
7 Executive summary
22

23. Market volume is mainly generated by traditional
(display) online advertisement of FM brands
Basis: 8.8 million euros in online advertising revenues for online radio services in 2009
Type of advertisement
yp
Type of stream
Spot
advertisement
d i
Online-Only
26%
Streams
31% Simulcast
Other Streams
advertisement 69%
77%
Source: Goldmedia Web Radio Monitor 2010,
*Changed method: without ad revenues of conventional radio stations
Conclusions
Change in method: traditional radio advertisement is not proportionally included in the online sector– resulting
in lower advertisement volume
To date, about three quarters of revenues have been generated by traditional online advertising (particularly
display / banner advertising) – spot advertisement remains underdeveloped
FM stations have been dominant to date – online-only leads for portals and aggregators
23

24. Goldmedia forecast: ad revenue for online radio through 2014
(from displays, sponsoring, ads, etc.): maximum of 36 million euros
Ad revenues (net) for all German online radios by 2014* Assumptions / background
40
CAGR: 09-14 Basis: Goldmedia Web Radio
o e e o
Monitor 2010 and forecast
36.0m euros 32% broadband development
Best Case
Best-case according to BNetzA, trend
g
30 Szenario extrapolation / analogy
method
in millions of euros
28.5m 26%
To date, mainly FM stations’
, y
e
euros Trend online platforms generate
20 Szenario
relevant revenues
High growth rates (partly
21.2m euros 100% p.a.) are observed for
Worst Case
Worst-case
10
Szenario
online-only services in
8.8m p
particular
euros Clear growth for online radio:
19%
Forecast
we assume an annual growth
0
of 19 to 32 percent,
2009 2010 2011 2012 2013 2014
Source: Goldmedia forecast Web Radio Monitor 2010, depending on the scenario
*Changed method: Without ad revenues of conventional radio stations
24

25. Web Radio Monitor 2010
Contents
1.
1 Introduction
2. The German online radio market
3. Use and scope of online radios
4.
4 Mobile usage
5. Advertisement and marketing
6. Trends and forecasts
7.
7 Executive summary
25

26. Web Radio Monitor 2010
Executive summary
Online radio Altogether, 2,692 online radios in Germany (status as of 04/2010)
market in Four fifths are online-only stations (2009: ¾)
Germany
G
Since 2006, annual growth rate (CAGR) of 57 percent
Usage On average 7,794 stream hits per day
g p y
(FM stations averaged 13,500 hits, online-only stations averaged 6,464)
Usage in the course of the day reveals a clear shift to online-only offers
in the evening, FM sub-brands are closer to the usage of traditional
radio stations (hits in the morning)
Radio is frequently used parallel to internet surfing
Advertisement/ Online advertisement revenues of all German online radio offers were
marketing 8.8 million euros in 2009 (incl. display advertisement, spots, etc.)
Display advertisement most important ad form for online radios, spot ad
p y p , p
overtook sponsoring as the 2 nd most important ad form in 2009,
followed by keyword marketing and affiliate marketing
6 out of 10 providers see continuous, significant growth potential for
p g g p
spot advertisement
26

27. Web Radio Monitor 2010
Executive summary
Mobile usage Altogether, 44% of all streaming services also available on the mobile
Share of mobile usage of total usage Ø 13.4 percent
60 percent of FM mobile providers offer apps
Market assessment: online radio will establish itself on mobile end
devices
End devices End devices’ distribution critical factor for online radio distribution
WLAN radio market penetration growing at a low level only
2010 smartphone market grew to 8.2 million end devices
Both end devices and desirable flat-rate fees must become more
widespread t make online radio more attractive
id d to k li di tt ti
Other trends Online radio aggregators are winning market share and becoming more
important for radio broadcasters scope measurements
broadcasters’
Mobile usage could drive growth
On-demand streaming providers hope that fee-based premium-service
models will b
d l ill become an additional source of revenue
dditi l f
27

28. Goldmedia GmbH
Media Consulting & Research
Dr. Klaus Goldhammer,
Dr. Michael Schmid, Christine Link
Oranienburger Str. 27, 10117 Berlin, Germany
Tel. +49 30-246 266-0, Fax +49 30-246 266-66
info[at]Goldmedia.de
www.Goldmedia.com