Sep 02, 08Last updated: May 18, 2008
The Elevator Pitch for the Future of Radio
1. The most active radio listening is in cars, mostly during commutes to and from work. Commuting times are increasing, not decreasing, and therefore radio listening is not much suffering. It is still an extremely viable broadcast/publishing medium (as the References will illustrate).
2. Audiences and revenues are, however, decreasing, although not as dramatically as in other media types.
3. Audiobooks and podcasts have expanded the range of audio broadcasts, and in some cases the "publishing bandwidth" of radio.
4. The future of radio is challenged by mobile audio devices (obviously with the iPod at the forefront). Particularly in the youth demographic, radio is losing out to user-programmed audio.
5. New technology is starting to have an impact on radio, as it is on other publishing technologies - for example satellite and Internet radio.
Like television, radio remains largely a "push" medium with heavy advertising content. As such it goes against the prevailing media adoption trends: users programming their own content in an ad-free environment. My prognosis for the future of radio is neutral.
2. Audiences and revenues are, however, decreasing, although not as dramatically as in other media types.
3. Audiobooks and podcasts have expanded the range of audio broadcasts, and in some cases the "publishing bandwidth" of radio.
4. The future of radio is challenged by mobile audio devices (obviously with the iPod at the forefront). Particularly in the youth demographic, radio is losing out to user-programmed audio.
5. New technology is starting to have an impact on radio, as it is on other publishing technologies - for example satellite and Internet radio.
Like television, radio remains largely a "push" medium with heavy advertising content. As such it goes against the prevailing media adoption trends: users programming their own content in an ad-free environment. My prognosis for the future of radio is neutral.
Page Index
- Introduction to the Future of Radio
- Radio's Reach
- Radio Industry Profitability
- The Prognosis for the Future of Radio
Introduction to the Future of Radio
Radio has somehow become the lost child of the Internet revolution. It falls below most of our "future of publishing" radars. Overall it generates less original content than other publishing media, but it is a key source for the dissemination of original content from other sources.Where has radio traditionally had its greatest impact? In the live broadcast of the audio of current events (mostly sports), in delivering news, and in introducing audiences to new music.
If people didn't drive so much, radio would already be dead. As the chart below illustrates, nearly half of all radio listening takes place in cars.
Arbitron, the apparent arbiter of data for the radio industry points out in its National In-Car Study that "Americans report spending an average of 15 hours a week in-car, either as driver or passenger, and perceive traffic is getting worse. Commute times, from the recent Census, have increased 14% from 1990 to 2000."
There is an increasing trend for drivers to program their own audio to listen to while driving, such as by plugging their iPods into the audio system of their cars, and while I can find no direct figures on what impact this is having on radio listenership, clearly there is an impact. The much improved audio systems in most new cars encourage drivers to either plug in their own audio inputs, or listen to CDs or audiobooks. Audiobooks continue to enjoy significant sales increases, and have reached nearly $1 billion in annual sales. As the Audio Publishers Association (APA) points out, like radio, "the primary usage [of audiobooks] is while traveling and commuting." And as many audiobooks are borrowed through public libraries, this sales figure surely understates the full audience for this medium.
As the Project for Excellence in Journalism (PEJ) 2008 report states, "What we once knew as radio is now something more complex and in many ways more interesting. In addition to the AM and FM dials, now there is satellite, HD, Internet, MP3s, podcasting, and increasingly, cell phones."
Radio's Reach
According to the PEJ report on radio, "traditional broadcast radio has maintained an impressive following, even among fans of new audio, though the numbers are falling slightly. According to Arbitron, traditional radio commanded a weekly audience of 93.3% of the population 12 and older as of the spring of 2007. This translates into nearly 233 million people over the age of 12 who tuned into the AM/FM dial at least once during an average week."That number represents a modest drop of 1.6 percentage points since the spring of 2000. The decline is relatively small compared with newspapers, network television and magazines (emphasis mine) that, like traditional radio, also face competition from new technologies."
Radio Industry Profitability
Even using figures from the radio industry's primary trade association, the Radio Advertising Bureau (RAB), the industry's revenues are trending flat:
Another data point, from an investment blog called Seeking Alpha, points out that:
"There are simply too many radio licenses that have been issued by the FCC creating much more supply than the industry can support. This creates too many bottom feeders in the marketplace that drag down advertising rates for everyone else."
Quoting a March 18th report from Inside Radio, blogger J.P. Hannan notes:
"The FCC reports the total number of licensed radio stations has risen to 13,977 -- the highest number ever. Today's count is nearly 1,200 above the number of licensed stations a decade ago. The current total includes 6,309 commercial FMs and 4,776 AM stations. Not part of the count is the 831 licensed low-power FMs."
The Prognosis for the Future of Radio
Paraphrasing from the PEJ report on radio: Much more change is to come.References