Future of Radio: Is It the End for Terrestrial Radio?

In my series of posts on the history of radio, one was titled “Video Didn’t Kill the Radio Star After All.” It was about the time when television became popular, the late 40’s and early 50’s, and the networks, NBC, ABC and CBS, virtually abandoned radio. Many, including the guys who ran those networks which supplied the most popular of radio programming, were ready to write the medium off.

Radio MastBut instead of fading away, radio had a revival. Transistors, car radios, teenagers, DJ’s, rhythm and blues and rock and roll all combined to make radio more popular than ever with both more listeners and more influence on a few successive generations of Americans.

Fifty years later, many are again questioning the future of radio. With streaming services, Spotify and Pandora, with satellite radio, podcasts and internet radio, with smartphones that allow you to carry your whole music collection in your pocket, what happens to all the those AM and FM radio stations?

Maybe nothing.

The Pew Research Center’s 2016 State of the News Media annual report didn’t have a lot of good news when it came to traditional media. That is, except for radio. “The American public’s consumption of audio content, which includes radio news and talk shows in addition to music, sports and other programming, continues to increase. Advances in consumer technologies allow increasing numbers of Americans to choose to listen to radio on a variety of newer platforms, while at the same time, terrestrial radio continues to reach the overwhelming majority of the public.”

The Pew report continues: “Traditional AM/FM terrestrial radio still retains its undiminished appeal for listeners ­– 91% of Americans ages 12 and older had listened to this form of radio in the week before they were surveyed in 2015, according to Nielsen Media Research.”

The radio industry trade publication Radio Ink concurs. “Still as strong as ever, radio continues to confound competitive naysayers by expanding its connection to analog listeners despite the proliferation of pureplay alternatives like Pandora and commercial-free experiences like satellite radio. In fact, radio was the only analog medium to show growth year-over-year in Nielsen’s analysis (+1% in time spent listening) and it is the only medium to command a consistent share of daily media activity (17%), no matter the demographic.”

So why is radio the medium with nine lives? Turns out that simple old AM/FM radio has a lot of things going for it.

  • Radio is free. There’s no monthly subscription required. It’s not bundled into some expensive package by your cable operator or broadband provider. It’s in the air. Turn it on and you’re good to go.
  • Radio has a business plan. It has nearly a century of history being supported by advertising. While traditional on-air spot advertising has shown a small but steady decrease in recent years, it is still by far the largest stream of radio revenue (75% according to Pew). Wil Pandora ever make money? (For the first quarter of this year Pandora reported more revenue, more subscribers, more advertising. And a loss of $132 million. Even higher than the loss of $115 million in last year’s Q1.) Why is there only one satellite radio provider? And who’s making money on podcasts?
  • Media advertising itself is in a state of flux. You can block ads on your phone or computer. You can record and fast forward past them on TV. But radio ads are pretty much unstoppable. And while display ads have been widely discredited in terms of effectiveness, radio has been practicing the newly-popular “native advertising” approach since the 1920’s. Just have your favorite DJ describe the great dinner he or she had last night at a local restaurant and you’ve got the kind of meaningful endorsement advertisers struggle to replicate on other mediums.car radio
  • Some newer cars today come equipped with satellite radio. Some have wifi. Some have wireless connections to your smartphone. But ALL of them, old or new, cheap or expensive, have radio. And you don’t have to set it up or figure out how to work it. Here’s the numbers from Pew: “…traditional AM/FM radio is – and by a large margin – the most common form of in-car listening. Just 8% of listeners in the car named online radio as the source they used most often and 12% named satellite radio, compared with 63% who named AM/FM radio as the audio source they turned to most often. That is up only slightly from 60% in 2015.” That’s right it went up!
  • The whole world doesn’t have broadband. The whole country doesn’t have broadband. Last year the FCC said there were 34 million Americans without broadband. There are still rural areas with little or no good internet options. There are people who don’t have smartphones and there are people who can’t afford the only available broadband. Some folks are unaware of how to find and listen to podcasts and some others don’t know how to connect their phone to their car speakers. But they can get radio and everybody knows how it works.
  • Radio scales at no cost. Station operators’ expenses are the same no matter how many listeners they have. There are no additional data costs if your online audience grows. Nor do your listeners need a bigger data plan to listen. And royalties are not calculated based on the size of the audience.
  • And finally, here’s one I hadn’t thought of (courtesy of Slate): “When the zombie apocalypse arrives, radio will save your hide. Anyone with a generator and an antenna can broadcast radio, and everyone listening hears the same key information in real time.”

Is it the end for terrestrial radio? No. At least not for now. Radio is looking like the last holdout of the analog world. But will radio have another revival? I’ll discuss that in next week’s post when I raise the question “Is It the End for Big Corporate Radio?”

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13 Responses to Future of Radio: Is It the End for Terrestrial Radio?

  1. Real good article, Ken.

    Liked by 1 person

  2. BroadBlogs says:

    Sounds like radio is a great investment. I know that I always listen to it when I’m in traffic.

    Liked by 1 person

  3. pjlazos says:

    Haha! I was thinking about Ham (sp?) radio as our savior during a zombie apocalypse but you beat me to it, Ken!

    Liked by 2 people

  4. Donna Janke says:

    Interesting article. Certainly the accessibility of radio is one of the reasons for its survival. I think the fact that there are often stations with a lot of local information may also be a factor.

    Liked by 1 person

  5. This was just such an interesting article. I went for a big stretch of years without TV and the radio was so important to my family. Another love of the radio is driving across the United States and tuning into the local radio stations along the way. It really does give insight into the culture and diversity of the country. Enjoyed this essay very much Ken. Just excellent. Thank you.

    Liked by 1 person

  6. Got to admit Ken I have never even considered radio going the way of dinosaurs like print media will. It does seem like it will always have a place and yes, it’s free…really and truly free with no one (I think) watching where you spin the dial and selling that information.

    Liked by 1 person

  7. ken really a good article

    Liked by 1 person

  8. spotmagicsolis says:

    Oh good. You’ve written my post for me. Thank you!

    Liked by 1 person

  9. spotmagicsolis says:

    Reblogged this on Synchronicity is taking terrestrial radio into a *better* digital future. and commented:
    Radio is alive and well so we’ll let this Off The Leash guest poster report the Pew study and all.

    Liked by 1 person

  10. Pingback: Interesting ideas on future of radio via another blog……………… | A Henley on Thames Blog

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