Radio continues through a major transformation. While sat radio like XM and Sirius have been busy acquiring high-priced content and talent (a la Howard Stern), standard radio (you know, the AM/FM kind, sometimes known as terrestrial radio) has been cutting back on advertising, trying new formats and introducing new digital gadgets like HD Radio (which offers AM/FM radio digitally plus additional companion formats for stations not heard over the regular airwaves).
Additionally, radio's ratings company -- Arbitron -- finally is making an aggressive push away from paper diaries to modern digital PPMs (portible people meters that automatically record radio listening habits).
While these changes may be a bit late, at least they are being done. And maybe still in time. Naturally, radio insiders and CEOs express their collective confidence about radio's long-term health. I'm a radio guy who still actively listens to radio for both professional reasons and personal enjoyment. I'm hopeful...and also realistic looking at the changed competitive landscape. Radio has a serious challenge ahead.
Radio was a Wall Street darling throughout most of the '90s. For the first couple of years after the dot com bust, radio still got positive marks from investors, even though a major talent shift to the Internet and digital media industries was taking place. It all changed when the iPod was released a little more than 3 years ago. Radio suddenly got wrapped into something called "old media".
Which brings us to today. Whenever a major advertiser/multi-media buyer outside the radio industry says something positive about radio, it's noticed. In terms of media buys, radio has long battled being secondary to TV and newspapers, despite reaching more than 90% of the entire US population every week. The Internet poses another challenge. The perception of radio as "old" is its greatest challenge.
And yet, according to Billboard's RadioMonitor, one major US advertiser said “Radio is at a critical moment in its history, on the verge of tremendous growth and poised for transformation.” Whoa. Okay, I'm intrigued.
Radio "could squander its opportunity if it doesn’t act quickly. Radio needs to embrace culture change, put consumers first – “don’t lose sight of the listener” when embracing new technologies -- and “get comfortable with being uncomfortable.”
To read the RadioMonitor article about what happened at the AdWeek/RAB "What The Frequency? New Rules for Radio" forum conducted this morning in New York, click here.
posted by Chris Kennedy @ Wednesday, March 15, 2006,