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Fred Jacobs

March 31, 2006

CELL PHONE ONLY USERS

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"CELL PHONE ONLIES" – A PROBLEM THAT HAS GOTTEN WORSE


Tech Survey II Reports

Howard Stern

Cell-Phone Onlies

HD Radio

iPods/Podcasting

Email & Database Mining

Text Messaging

Satellite Radio

Streaming

Jacobs Media has just wrapped up its second annual all-client web poll dealing with a myriad of technology oriented issues. Overall, more than 75 radio stations were included, representing Alternative, Mainstream/Active Rock, and Classic Rock/Hits formats from all over the U.S. We had participants in markets as large as Philadelphia, San Francisco, and Chicago, as well as listeners in towns as small as Hagerstown and Fort Wayne. Overall, more than 25,000 surveys were collected (an increase from last year’s 19,000+ respondents). All interviews were collected in late February of this year.

The Arbitron Advisory Council received our memorandum regarding telephones from the 2005 survey. In order to provide updated data, we replicated that key question in this year’s study. It is as follows:

Which of these statements best describes your personal telephone situation?

        1. I use both a cell phone and a regular home phone
        2. I use my cell phone for everything – I don’t have a home phone
        3. I have a home phone but no cell phone
        4. Other _________________________

Here are the results for the entire sample:

For the total sample, the "Cell Phone Only" group has moved from 17%-21% in one year – an increase of 24% year-to-year.

By age demographics, the biggest CPO group continues to be 18-34 year-olds. From the ’05 study to this new ’06 project, there’s been a 28% increase. Note that among 35-44s, CPO status is on the rise, too.

Finally, the CPO situation becomes an even bigger factor for younger-targeted radio formats. As was the case last year, our Alternative panel shows the greatest propensity for CPO status – and it is growing at a rapid rate:

More than one-third (35%) of our Alternative respondents fall into the CPO group – an increase of 25%. And the same is the case among our Active/Mainstream Rock category. One in four (24%) of these radio listeners is now CPO, a rise of 26% year-to-year. Even the older Classic Rockers are impacted as well.

In summary, the younger demographics (and the Alternative format specifically) continue to be most impacted by the trend to drop land lines and rely on just a cell phone. But now, older listeners who skew toward Mainstream Rock are impacted, too.

We are pleased on the one hand that Arbitron recognizes this problem, and has put plans in place to include CPO respondents into its sample frame. Last year’s Jacobs Media’s Tech Poll was a catalyst in bringing this problem to the surface, and we compliment Arbitron for responding to the study. The problem, however, is that CPO status is increasing at an alarming rate, and Arbitron’s "roll-out" will not begin until 2008. This study suggests that if there’s a way, this timetable should be accelerated.

Arbitron’s ability to reach younger consumers is a well-known problem, but when more than one-third of 18-34s are "unreachable" due to only having a cell phone, this presents a crisis for stations that are targeting this demographic.

The future of radio depends on companies and stations that make an effort to reach young listeners. As we know, new technology – cell phones, mp3 players, videogames, the Internet – compete for eyes and ears. It is critically important that Arbitron speed up its plans and strategy development for surveying young listeners.

While some may view this survey as being limited to members of station databases, keep in mind that these listeners are the "gold card members" – strong, regular, engaged listeners.


Our Recap Of Arbitron's Plans for Dealing with the CPO situation

Jacobs Media’s Technology Web Poll II was conducted in February, 2006, among more than 25,000 respondents across 79 different Rock-formatted stations. Participating stations represent Mainstream Rock, Classic Rock, and Alternative outlets. Of course, this is a web poll, and cannot replicate all radio listeners or even all Rock radio listeners. As with all Internet-based research projects of this kind, the results reflect only those who choose to participate in the survey and do not necessarily represent the views of all Rock radio listeners in the country. Still, the 79 radio stations that invited their listeners to take the survey are a broad cross-section of Rock stations, with large and small markets, large and small stations, and those that play the newest Rock music and those that play only Classic Rock.

For questions or comments, please contact us:

Fred Jacobs
248-353-9030
fredjacobs@jacobsmedia.com


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