The report this morning from The NPD Group surprises me, although perhaps it shouldn’t considering how quickly the music business is changing. The research firm says that in Q4 online services including Pandora, iHeartRadio, and Spotify accounted for about 23% of the average weekly music listening time among 13-to-35 year olds, up from 17% at the end of 2011. The latest figure is just about even with AM/FM radio: It accounted for 24% of the music listening time among young fans, down two percentage points from the previous year. The change is “driven by mobility and connectivity” — especially the growing use of smartphones as music devices — says Russ Crupnick, senior vice president of industry analysis at NPD. The firm’s latest Music Acquisition Monitor study, based on its consumer surveys, says that young listeners increasingly see streaming services as attractive alternatives to CDs and digital music files. Digital files accounted for 15% of their listening time followed by on-demand services (14%), CDs (9%), satellite radio (5%), and the remainder for other sources. Pandora remains by far the most popular online service. It’s used by 39% of the young streamers followed by Clear Channel’s iHeartRadio (11%), the free version of Spotify (9%), Grooveshark (3%), Slacker (2%), Pandora One (2%), TuneIn (2%), Last.fm (2%), and Xbox Music (2%). A little more than half of the group said that they mostly listen to music in cars. Traditional radio still has a lot of fans among older listeners. AM and FM stations accounted for 41% of music time for those 36 and older. They spent about 13% of their time with Internet radio.

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