Digital Gabe
Cutting Edge Commentary On All Things Media

Radio’s Age Problem (follow up)

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On Friday I posted an article about broadcast radio’s ageing audience and what that means for the future of the industry.  Since then I’ve received quite a bit of push back from broadcasters who are trying to defend their business, which I can’t begrudge them for.  Amongst the feedback was an email asking if I thought Radio would be around in 20 years, and if it did survive what would the industry look like?  To add to the conversation I thought I’d share my response publicly . . .

Yes, Radio will be around 20 years from now.  However it won’t look much like today’s version.  According to my crystal ball AM radio won’t be commercially relevant in 20 years.  We’ll still have non-commercial stations on the AM dial along with other fringe formats like classical music, college radio, etc..  Between now and then the more successful AM stations will have migrated to the FM dial, where we’ll still hear plenty of sports play-by-play and talk radio.  This transition is already happening – just google “FM talk radio (insert city name)” for a list in your market.  However these FM talkers won’t air on newly created frequencies.  Instead they’ll be using existing dial positions currently occupied by music stations.  Why?  Because FM dial positions will no longer carry music programming because listening to songs will have completely shifted to the internet.  It’ll still be the same artists and music we all love, but streamed digitally instead of using the frequency modulation (FM) technology which was invented in 1933.  Because of this migration the business of radio will also have moved from broadcast to streaming, as today’s radio operators try to claw their way across the digital divide.

We’re already starting to see broadcasters’ revenue model shift from over-the-air to digital.  For evidence take a look at BIA/Kelsey’s full year report of Radio’s 2017 revenue.  US Radio revenue was essentially flat (-.2%) YoY.  But if you look inside the numbers you’ll see a 2% decrease in over-the-air revenue being offset by a 10% increase in digital billing.  This shows broadcasters are starting to transition their business into digital.

Over the next 20 years we’ll continue to see the slow and steady erosion of Radio’s core broadcast product.  Some radio companies will reinvent themselves and join current streamers Apple, Pandora, Spotify, and even digital big boys like Google and Amazon in music’s future-scape.  Unfortunately several won’t make it because they’ll be hanging on stubbornly to an FM distribution legacy which is destined for media’s dinosaur graveyard.

That’s my prediction for 20 years from.  Join the conversation and let me know what you think.

 

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