Consider this a debate with only one side represented. The issue is radio and if this were an old school classical debate — one that strictly followed the time-honored protocols for such things — one debater or debate team would make the case for radio’s attaining a new golden age and an opponent would present the case against it.
“But who,” in the words of the politicos who stage the quadrennial multi-candidate press conferences inaccurately billed as presidential debates, ” needs classic debate rules?” Who, indeed? Surely not us. So we’re going to present only one set of arguments, those that support the resolution.
Do we have any remorse about excluding those “against” from the exercise? Not really. Since the start of the recession the against point of view has been more than adequately represented by Chapter 11 filings, dismal financials and depressed share prices.
Truth is, the majority — if not virtually all — of the tangibles argue against our debate resolution. But, tangibles, especially when you’re dealing with the public’s taste in entertainment, often don’t count for very much. Who would have thought, for example, that cobbled up filler intended to plug prime time schedules during the 1988 TV writer’s strike would have spawned a reality show craze that’s still going strong today.
With that in mind, here’s our intangibles-based argument for an impending radio renaissance.
– Item: Internet Radio
Internet radio, its royalty battles finally behind it, has a unique ability to deliver its signal to almost everywhere via computers , phones, network music players (Sonos, etc.), personal music players and even some game consoles. If it is the future of radio, the future may be nearer than many of us think.
According to Arbitron, almost 13 percent of all Americans over the age of 12 — approximately 33 million people — tuned into one or more internet radio stations each week of 2008 and the vast majority of them were exposed to commercials in the form of inline audio ads and/or interactive graphical ads.
What’s more, thanks to advances in Geo-Location technology, internet radio stations can now offer advertisers both national- and local-market ad coverage.
Two recent example from the files of the Pandora i-radio service:
1. McDonald’s running a national campaign which featured, among other spots, a commercial devoted to telling listeners how to best use Internet radio to maximum its entertainment and information benefits.
2. Whole Foods Market sponsoring 15-second audio spots promoting their lunch menus to listeners whose IP addresses placed them within seven miles of one of the chain’s San Francisco Bay Area stores. One can argue the mapping — wouldn’t some people be willing to drive eight, nine or even ten miles for a good, healthy lunch? — without diminishing the value of internet radio’s ability to get that granular.
Item: HD Radio
Yes, it’s developing at a snail’s pace, but so did FM, which was hampered by exactly the same factors that are holding HD back — a severe programming deficit, incompatible hardware, lackadaisical consumer and industry support, and technological issues centered on limited transmission range.
The FM snail proved, in the end, to be considerably faster than the AM hare. Likewise, there’s no reason why HD shouldn’t begin cantering — if not exactly galloping — once the broadcasting industry figures out how to effectively exploit it, radio listeners become aware of it, and advertisers begin to realize how it can refine audience targeting and improve radio budget ROI.
A simple example should suffice. Mythical radio station WRYS (We Rock You Silly) has been programming top 40 or top 100 rock and roll for five years. Moving into HD, it programs oldies rock on one sideband and album tracks on another.
Advertiser A wants to reach everyone interested in rock, he buys all three WRYS feeds, probably at a better rate than buying three discrete rock stations with differing formats. If advertiser B wants to reach a somewhat older subset of rock and rollers, he buys only the oldies channel, hopefully ensuring that each “M” in his CPM will have a more favorable adult/juvenile ratio. Advertiser C, who wants to pitch hardcore, bad-to-the-bone headbangers, buys the alternate rock feed plus, maybe, a small schedule on the main channel.
– Item: Personal Music Players & Cell Phones
Does the iPod generation listen to radio? Possibly not four or five years ago when the rush to downloadable music resembled a feeding frenzy with threshing shark and barracuda packs mindlessly attacking and ingesting everything that made a sound except CDs and radio. But that was then. Today is now and both iPods and virtually all other high- and mid-range PMP models sport integrated FM tuners. Some fully featured players even integrate Wi-Fi to provide internet radio access to denizens of libraries and Starbucks.
The impressive factoid here is that radio capability, according to many consumer electronic product reviewers and trends analysts, was added to these devices in response to consumer demand. As far as most OEM music-player makers were concerned, the onboard portable music player tuner had long ago accompanied its host — the cassette tape-playing Walkman — into eternal oblivion.
Internet radio streaming has also become something of a “must-have” feature on smart phones and media phones. Empowered by software integrated into the phone as a standard feature or added by the user as an iPhone, Android, or Pre app, Internet Radio is becoming a highly popular alternative for accessing media without over-filling a phone’s memory card or fooling around with computer/USB file transfers.
How pervasive is this trend? According to a study by radio audience tracking report provider Bridge Ratings LLC, the number of Americans streaming radio through mobile telephones will match or surpass those subscribing to satellite radio in the not-very-distant future.
Which brings us to ….
–Item: Satellite Radio Stagnation
Based on its first three 2009 quarterly reports, Sirius XM is on track to end 2009 with 4 percent fewer subscribers than it had last December 31. That’s a full 4 percent erosion of their installed subscriber base, not a 4 percent decline in growth rate.
Though Sirius execs have tried to lay some of the blame off on poor sales of new automobiles, that spin seems hard to swallow since we’re talking about listeners who proactively cancelled existing subscriptions, not people who declined to buy new ones.
The good news for the ad-supported radio business is that it’s logical — though not empirically provable — that the people opting off the Sirius XM pay-for-play merry go round are still listening to radio. They’re just tuning into terrestrial or internet stations instead.
Whoops! Times seems to be up. The debate is over. The judges will now deliberate and declare the winner.
Wait a sec? What judges?
You, of course, and you and you and you and, most of all, posterity will determine whether the resolution that ad-supported radio is on the cusp of a new golden age will be affirmed or denied.
In the meantime, while we’re waiting for the verdict, we can all click on Are You Sitting Comfortably for a warm, friendly, time-tunnel tour of a world in which radio was king and the prospects for its reign seemed to stretch forward into forever.

