One out of Five Americans Have Used Internet Audio or Video in the Past Month According to Arbitron/Edison Media Research
Internet Broadcast Users Prefer Advertising to Subscription Models by More Than a Three-to-One Margin

Download Presentation and Study Summary Here

NEW YORK, September 24, 2003 – More than one out of five Americans, representing 50 million consumers age 12 and older, have used Internet audio or video in the past month, according to a new study by Arbitron Inc. (NYSE: ARB) and Edison Media Research.

The study, entitled Internet and Multimedia 11: New Media Enters the Mainstream, also revealed that the long-standing model of free programming supported by advertising is preferred by Internet broadcast users. Given the choice between free programming with commercials, a small monthly fee with fewer commercials or a higher monthly fee with no commercials:

• Sixty-one percent of people who tune to Internet audio and 59 percent of those who watch Internet video prefer free programming supported by advertising.
• Only 14 percent of Internet audio users preferred either of the two subscription choices.
• Twenty percent of Internet video users prefer paying a small monthly fee for programming with few commercials and 12 percent prefer a higher monthly fee with no commercials.

The scope of the latest research from Arbitron and Edison Media Research has been expanded to include information on "Early Adopters," those who are among the first to buy new products and services, and their interest and usage of new media and consumer entertainment services. The study found that Internet broadcasting is a strong medium for reaching Early Adopters, with 20 percent of them having tuned to Internet broadcasts in the past week. Overall, the weekly Internet broadcast audience is 50 percent more likely to be early adopters than the total population.

"Fueled by increasing broadband penetration, Internet broadcasting is rapidly approaching mainstream status among Americans," said Bill Rose, vice president and general manager, Arbitron Internet Broadcast Services. "The growth in regular usage of Internet audio and video is compelling evidence that Internet broadcasting is becoming more of a regular habit. As such, marketers should consider including Internet broadcasting in their media mix since frequent users of Internet audio and video are very likely to try new products and services, make purchases online, and consume new forms of audio and video entertainment."

The study also revealed that weekly Streamies own one-and-a-half times more DVDs than average consumers. One in five of the most frequent movie-goers (those who have watched five or more movies in the past three months) have watched an Internet broadcast of a movie trailer in the past month.

"Internet broadcasting represents a significant promotional opportunity for movie studios," said Larry Rosin, president, Edison Media Research. "Online movie trailers are a compelling advertising vehicle because the people who have watched online trailers see far more movies than the average consumer."

The study also revealed that "monthly Streamies" – those who have used Internet audio or video in the past month – are far more likely to book hotels and buy airline tickets online than the general population. Sixty percent have used the Internet to book a hotel or buy an airline ticket for personal travel versus 36 percent of the total population. Furthermore, more than two out of five monthly Streamies have booked a hotel or bought an airline ticket for business travel.

Additional findings from the study include:

• Eighty percent of the total population now has access to the Internet from any location, up from 75 percent in the Arbitron/Edison Media Research survey from January 2003.
• The number of Americans with residential broadband Internet access has tripled since January 2001, rising to 21 percent as of July 2003. One-third of early adopters live in homes with residential broadband.
• Online Americans say that pop-up ads are the most annoying type of Internet advertising by more than a six-to-one margin. Twenty-five percent of those who have at-home Internet access use software programs to block pop-up ads, while 34 percent use programs at home to block spam or junk e-mail and 16 percent employ software to eliminate banner ads.

The findings reported here are based on a July 2003 survey consisting of 2,005 telephone interviews with a randomly selected national sample of Arbitron's Spring 2003 radio diary keepers. Since 1998, Arbitron and Edison Media Research have conducted 11 groundbreaking studies of the Internet and streaming media, one every six months. This latest study, as well as previous studies, may be downloaded free of charge via the Arbitron and Edison Media Research Web sites at www.arbitron.com and www.edisonresearch.com.

About Edison Media Research
Edison Media Research conducts survey research and provides strategic information to radio stations, television stations, newspapers, cable networks, record labels, Internet companies and other media organizations. Edison Media Research has been cited by Advertising Age as the fastest growing company among their list of Top 100 market research companies in their past five annual listings. Edison Media Research works with many of the largest American radio ownership groups, including Entercom, ABC Radio, Infinity, Bonneville, Emmis Communications and Westwood One, and also conducts strategic and perceptual research for a broad array of companies including AOL/Time Warner, Yahoo!, Universal Music Group, Sony Music, Princeton University, Northwestern University, Time-Life Music and the Voice of America. Edison Media Research also conducts research for successful radio stations in South America, Africa, Asia, Canada and Europe. Edison Media Research designed and operated the CNN RealVote election projection system in 2002, and conducts all exit polls and election projections for the six major news organizations - ABC, CBS, CNN, Fox, NBC and the Associated Press. All of Edison Media Research's industry studies can be found on the company's Web site at www.edisonresearch.com and can be downloaded free of charge.

About Arbitron
Arbitron Inc. (NYSE: ARB) is an international media and marketing research firm serving radio broadcasters, cable companies, advertisers, advertising agencies and outdoor advertising companies in the United States, Mexico and Europe. Arbitron's core businesses are measuring network and local market radio audiences across the United States; surveying the retail, media and product patterns of local market consumers; and providing application software used for analyzing media audience and marketing information data. Arbitron Internet Broadcast Services measures the audiences of audio and video content on the Internet, commonly known as webcasts. The Company is developing the Portable People Meter, a new technology for radio, television and cable ratings.

Arbitron's marketing and business units are supported by a world-renowned research and technology organization located in Columbia, Maryland. Arbitron has approximately 825 full-time employees; its executive offices are located in New York City.

Through its Scarborough Research joint venture with VNU, Inc., Arbitron also provides media and marketing research services to the broadcast television, cable, magazine, newspaper, outdoor and online industries.

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EDITOR'S NOTE: Interviews available upon request

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This alert is available on the Arbitron Inc. site at www.arbitron.com and on the KCSA Worldwide Web site at www.kcsa.com