Thursday, August 4, 2011

The Impending Death of Radio

In the nation’s top media markets, the online “radio station” Pandora is now the most-listened-to service, beating on-air radio in key demographics in New York, Los Angeles, Chicago, and San Francisco. As of July, Pandora was number one in the number of persons 18-34 years old listening in those four cities, and Pandora was number two or tied for second in the nation’s other ten largest markets, except Boston, where Pandora is number 3.

And, according to my friend, top-flight radio consultant Holland Cooke, the erosion of radio ratings to internet services is not just about Pandora; the internet’s top 20 audio-casters are up 27% in the past year.

I’m pretty sure neither of my kids (ages 26 and 28) listens to radio.  I think radio’s goose is pretty much cooked, and that it will largely disappear within my lifetime.  And I’m 62.

Any radio station that plays music of any sort as its stock-in-trade was doomed a long time ago, when the mp3 player became popular.  Smart radio group operators have already realized that news/talk/sports (called “spoken word” formats in the industry) is about the only remaining viable role for radio, and in the biggest markets, station owners are dumping the music format on their FM stations and simulcasting their news/talk format on their FM’s.  In Chicago, CBS radio has just dumped the music format on its FM station (which used to be “Fresh 105.9”) and is now simulcasting news/talk WBBM-AM on the frequency.  This sort of thing is going on all over the nation.

Nearly every car sold today has a sound-system (we used to call it “radio”) input for your mp3 player; Ford has pioneered in-car internet connection; and it won’t be long until every new car sold will come equipped to get the internet.

By and large, broadcasters have no concept of how to deal with these massive changes, and continue to pare the payroll of the best and most experienced on-air talent (read: most expensive), replacing veterans who have long-standing connections with the community – attributes which are most likely to slow the constant erosion of listeners – with lower-priced, less-experienced personnel.  Most radio stations regard their website as a glossy brochure for their on-air product, offering almost no value to people who stumble across their website.  They’re riding the horse backward.

Radio’s days are numbered, and it seems most station owners are doing what they can to hasten its death.

7 comments:

  1. Here's my question, Tim: Why can't radio stations sell ads on their podcasts? It seems to me the listener numbers are much easier to account for and, in some cases, the listener is more engaged than they would be just trolling the dial on the evening commute. Then again, I know what a lot of radio people think of the "sales weasels," so maybe your response here will be predictable. ;)

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  2. A lot of ex-on-air folks have moved to podcasting, and have learned to “sell spots” in their podcasts to generate revenue.

    You’re also correct about the sales/programming dichotomy. Most on-air folks view the sales units as greedy, rich bastards (take a look in the parking lot at ANY radio station: you can tell which cars belong to the sales people, and which belong to the on-air people) who are constantly annoying them with last-second impossible requests to produce a commercial (“spot”) for a client “who’ll cancel if it’s not on the air tomorrow morning”; or to do an impossibly complicated “spec” spot for some client who’s not going to buy the ad (or, if the client does, it will have to be re-done with massive changes); and there’s the “value-added” trinkets and trash the sales people insist be given away “with mentions” (“the 14th caller right now will win a certificate good for a free ice cream cone at Joey’s Drive-In, at 2nd and Main, with the sexiest carhops in town and great food for all your eating needs!!!!!!!!”) which clutter programming and position your program as the one that gives away crappy stuff. BTW, ever notice how many radio stations give away crap like ball-point pens, refrigerator magnets, and heavily logo’d coffee cups? Trinkets and trash.

    Sales people view the programming people as unmotivated slackers, who are there to obstruct their best efforts to land new clients, who say things on the air that drive away business (I once had to sit through a long lecture from a sales manager because I called the Stop ‘n Go convenience store at a certain location in Madison the “Stop ‘n Rob” station, because it got held up twice a week), and as uncooperative people who have no clue how hard it is to land a client and keep them happy.

    So the short answer to all this is the bane of local broadcasting everywhere, namely, poor management. The best DJ becomes the Program Director, and the highest-billing sales person becomes the Sales Manager – never mind that it’s a completely different set of skills required to MANAGE talent. And odds are long that the “station manager” or “general manager” began (and essentially ended) his (yes, HIS) career in sales, and views news as an expense item and programming as a necessary evil at best.

    So, Jason, was this a predictable response?

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  3. Hmm... sounds like the newspaper business!

    A good, enterprising sales person would be able to sell podcasts as well as anything else and a good marketing person would be able to drive traffic to those products. But just like print people are horrified of "cannibalizing" their own products while seemingly unconcerned that the alternative is to lose them altogether, radio people are losing their listeners to things they could just as easily be doing themselves.

    I mean, how much are these studios going unused during the day while syndicated programming plays? You'd think they could use all that fancy equipment to produce niche podcasts that would satisfy their advertisers.

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  4. I'm at a loss why local talk radio doesn't work in Madison. Stations with that format do very well in Milwaukee and Chicago.

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