Radio’s resilience has its limit. AM/FM has met its match in the internet age and the time has come for it to die. But the radio itself is one of the most resilient media platforms I know. It exists despite extreme forecasts by experts who have said that it would be dead already. Recently, things have gotten even worse. Let’s go over the reasons radio as a mass media is dying.
The new consumption habits of Generation Z
Young people, particularly Generation Z (those born in 1995 or later) have new consumption habits and the radio is not one of them. As John Allen Hendricks and Bruce Mims express in The Radio Station, “The rising ‘Gen Z’ demographic is showing little interest in traditional media, having grown up in an on-demand environment as true digital natives.”¹ A study from Musonomics, a company that provides analytics for the music industry, showed “the listening to AM / FM radio among teens 13+ declined by almost 50 percentage points between 2005 and 2016.”² These individuals prefer interactivity and personalized digital streaming platforms like Pandora, Spotify, Apple Music, or Play Music.
For several years, the radio was a source of music discovery and exposure. Now, people discover new music with streaming platforms and the music industry receives the majority of their revenue from these platforms. Generation Z is not turning to radio first for music discovery.
One of the technical limits of the radio is distance. I t is transmitted by an antenna and the maximum distances between the sender and receiver are typically limited to 30–40 miles. Meanwhile, new technologies distance knows no bounds.
The appearance of smartphones challenged radio, which had the answer to force the inclusion of FM receiver chips in phones. Still, iPhone has never had a native radio mobile app and with more than 60% of the US population using iPhones in 2017, this was a major problem. So, Emmis Communication Company launched a mobile app called NextRadio which consisted of unlocking the FM chip and offered consumers the option to listen to local radio stations³. The result was a failure only a year later. There was a supply for FM receivers in smartphones but no demand.
In the face of the loss of audience and money, radio stations are making desperate efforts to impose their radio system when in reality this doesn’t work anymore. In the last three years, there were two big changes that seemed to be the last straw for radio: in-car entertainment systems and smart speakers in houses. Cars, one of the pillars of listening to the radio, have been introducing digital entertainment systems instead of just radio receivers. Accenture, a multinational consulting firm, had a study in 2016 where they asked about the importance of services for passengers. Access to streaming and digital information services was the top answer for 71% of respondents⁴. In the case of smart speakers like Google Home and Amazon Echo, unlike the traditional home audio receiver, they have access to the internet and don’t have an AM/FM receiver. The Edison Research made a study in 2017 showing that 7% of Americans aged twelve and more own at least one smart speaker⁵. With a focus on digital services, both in cars and houses, the presence of an AM/FM receiver is not only dwindling but disappearing. The traditional broadcasters are faced with the complex but known challenges of their business.
The Alternative Radio Business Models
Historically, the business model of the radio was advertising. Due to digital disruption in the last few years, radio has focused on the local audiences and local advertisers as a differential value offer from the rest of the media. Meanwhile, in 2016 U.S. commercial radio’s income went down one percent, and both in 2017 and in 2018, income declined two percent, according to a study of BIA Advisory Services⁶.
Local advertisers and audiences choose to shift the dial to digital platforms
As mobile and digital alternatives are increasing, local advertisers and audiences choose to shift the dial to digital platforms such as Youtube, Spotify, or even social media like Instagram, Facebook or Twitter. In those platforms, brands can have specific and real-time analytics from the behaviors of consumers, and in turn, these receive personalized content according to their interests. One of the new alternatives to the traditional radio format is podcasts. Unlike the radio that is usually listened to live, a podcast is a series of digital audio or video which a user can listen to on-demand on a digital device, such as a phone, computer, or smart speaker. The Interactive Advertising Bureau says that U.S. podcast advertising in 2018 was $479 million, an increase of 53 percent from 2017, where it had already increased 86% from the prior year — $314 million as compared to $169 million⁷. This growing trend of media anywhere and anytime is creating huge opportunities for digital media, in which podcasting is the alternative to the old business and content model of radio. Even the advertising model to sustain the media, such as TV, radio, or newspapers is old and less effective year-to-year.
The audience, especially young people, tolerate less and less advertising as shown by a survey conducted by McCarthy Group stating that not only 84% of millennials don’t like traditional advertising, but also they didn’t trust it. This generates a strong negative impact on the advertising model and undoubtedly the radio stations have to find new paths of reinvention in the face of all this adversity.
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Reflections of why the radio is dying
It’s clear the new ways of consumption of media by young people, technological advances, and new profitable business models are the main causes of radio’s impending death. The industry needs to make peace with this inevitability and see it as an opportunity to change their business and a chance to turn it into a global digital information service. If you are a passionate radio producer like me, making a podcast is one of the best alternatives as to the evolution of traditional radio that you can produce easily and keep up with the times.
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- John Allen Hendricks and Bruce Mims, The Radio Station, (New York, Taylor & Francis, 2018).
- “Why Radio Must Adapt to the Rise of Digital.” Musonomics, August 30, 2017, http://musonomics.org/paradigm-shift-why-radio-must-adapt-to-digital
- Pail Mclane, “NextRadio Takes a Bite of Apple With Streaming.” RadioWorld, August 1, 2017, https://www.radioworld.com/news-and-business/nextradio-supports-streaming-including-on-apple
- “Consumers Willing to Pay Extra for In-Car Technologies.” Accenture, April 28, 2016, https://newsroom.accenture.com/news/consumers-willing-to-pay-extra-for-in-car-technologies-accenture-research-reveals.htm
- “The Smart Audio Report.” National Public Media, 2018, https://nationalpublicmedia.com/wp-content/uploads/2018/01/The-Smart-Audio-Report-from-NPR-and-Edison-Research-Fall-Winter-2017.pdf
- “Investing In Radio 2018 Market Report 4th Edition” BIA Advisory Services, 2018, http://www.biakelsey.com/research-data/broadcast-center/publications/investing-radio-2018-market-report-4th-edition/
- “2019 Podcast Ad Revenue.” Interactive Advertising Bureau, June 03, 2019, https://www.iab.com/insights/third-annual-podcast-ad-revenue-study-by-iab-and-pwc-reports-significant-growth/
- 88“Millennials Survey.” The McCarthy Group, February 6, 2014, https://www.themccarthygroup.com/millennials-survey
The original text was written in the Advanced Writing Class – Michigan Language Center – October 2019. Ann Arbor, Michigan, United States