Is radio on the same decline as newspapers? It very likely is.

An "inside business" issue these days--and especially inside the world of marketing communication--has to be the future of terrestrial radio; this pertains to what most lay people would refer to as traditional radio, such as AM and FM broadcasting listened to, historically, in cars, tabletop sets, alarm clocks, and desk sets at work.

Yesterday the Wall Street Journal ran a story that reports that Clear Channel, via its parent, CC Media, company reported a third-time-in-a-row quarter of advertising losses in the range of about 20% each!  [Hell, that’s about 60% in aggregate in my book!]   Clear Channel is the largest owner and operator of AM, FM and short-wave radio stations in the U.S. 

Clearly, it is too early to say exactly what the trajectory of terrestrial radio will be like; after all, we’re in the middle of a prolonged economic recession—and the decline in media advertising is affecting all media, not just radio.  Nonetheless, one has to take seriously all the talk that the decline of radio has begun—and might well follow newsprint into—if not decline and oblivion—maybe into a new reality and economic business model.  Several independent indicators seem to support such apprehensions, including the surpassing of ad dollars directed to on-line information sources--and at an increasing rate at that!  Since the “science” of tracking radio listenership—and I use the word “science” in this context very loosely—has never been seen as particularly trustworthy, one can see other signs along the way that support the ascendancy of other media and the demise of traditional radio.  Let’s enumerate some of the more obvious ones. 

First, much of radio listening has occurred in automobiles—from hence came the marketing use of the term, “drive time.”  Less and less listening to radio is today happening in autos; instead people are talking on mobile phones or electing to listen to personal audio devices like iPods, MP3 players of one sort or another.  Why would a person want to take the chance of maybe hearing their favorite song on the radio—when they could otherwise listen to a playlist of their own making in which all of the songs are their favorites?! 

More and more new vehicles are coming, stock with subscription-based satellite radio units—making obsolete the need to listen to up to 40% of the time in the car to paid commercials.  [When I am forced—out of sheer boredom--to turn on terrestrial radio, I now think it odd and annoying to hear so many commercials?  I ask myself “Who still really does this?”—particularly if they’ve ever been liberated by bring-along devices that permit favorite sounds of music, podcasts, recorded books, etc.]

At home, the picture is changing as well for the worse insofar as traditional radio is concerned--and in not-so-subtle ways!  Internet radio is making in-roads into people’s listening preferences—again with no- or fewer commercials!  Cable companies are now delivering specialty “radio” alternatives to people’s homes—also with no- or fewer commercials! 

It’s too early to write the obituary for terrestrial radio, but all the signs are in place that a long life as we might have expected for it are not in store.  Even with an economic recovery, it is likely, in my opinion, that much of the losses radio will not be re-gained.  With loss of listeners—even if ad rates stayed the same [and they likely will not!]—effective advertising cost will rise, mirroring the plight of newspaper today! 

This is the case for the simple explanation that much in the way of direct—and better [read, advertising-diminished, or advertising-free] listening alternatives exist.  And where chance remains to listen to the “radio,” other activities will continue to supplant idle time that used to be spent by individuals, alone with a terrestrial radio signal source.  The times have clearly changed for paper-printed newspapers [See yesterday’s WSJ article by Nat Worden “Ad revenue eludes newspapers” for more bad news for newsprint] but the "signs of the times" are that radio will likely be following predictably along behind. 

As they say in the broadcast business:  stay tuned. 

Post note:  You can check-out Sarah McBrides WSJ piece “Clear Channel parent CC Media posts loss as sales decline” for yourself.  

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