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10/30

Will Half of Terrestrial Radio Stations Disappear?

A recent Borrell report provided a slew of predictions for the media space over the next ten years, but none was more alarming to radio broadcasters than Prediction No. 4:

borrellradioprediction

The prediction:

Car-dashboard options diminish AM/FM radio listening. Half the terrestrial stations disappear. Only those with strongest and most valuable audiences remain. Smartphones become radios.

The knee-jerk response to this for folks in the industry is to reject it out of hand. But let’s look closer with an open mind.

First, the premise here – and this is something I have stressed for some time – is that a more “complete” and compelling car dashboard is unavoidable and radio’s “proper place” on that car dashboard is whatever the consumer says it is – in other words, radio will be as important as what’s on the radio.

Ideally, that means broadcasters invest in new kinds of unique and compelling content that’s “must hear” and “must find.” But is this too hopeful and optimistic?

Let’s imagine that ideal doesn’t materialize and what we hear today is pretty much what we’re gonna hear in the years to come.

Under that scenario, when new options blossom on the dashboard with new value propositions and attractions, radio, by comparison, will be “consistently consistent” and unexciting by comparison. Not bad, just unexciting.

In other words, radio will, for some portion of the audience, be marginalized. And that marginalization will cost listening hours. And those listening hours will be connected to ad dollars. And the stations most hurt by this evolution will be those most vulnerable already. Indeed, signals are already flickering out across the land, and there will certainly be more to come.

The data indicate that comparatively little online radio consumption occurs in the car right now primarily because online radio is neither easier nor more convenient than the radio built into the dash. But when that changes – and change it shall – the floodgates will open and listening will begin to equalize across platforms (it remains shocking to me that many broadcasters are still not streaming – that’s like the makers of The Hunger Games deciding to release the movie in all theaters – except those owned by AMC).

At that point smartphones will truly have become radios and, as Gordon predicts, only the radio stations with the largest and “stickiest” audiences and the most progressive and experiment-friendly business models will thrive.

Many more will only survive.

And many more will not.

So what does Borrell advise as the solution to this problem?

Develop original content. Strengthen community relationships. Pick the most valuable audience format. Master the radio-social media marketing game.

The first point is the one I just made.

The second point -“Strengthen community relationships” – has to do with being more tightly integrated into the community. I say – unless you’re in the information or sports or public radio formats – that will not be enough.

The third point – Pick the most valuable audience format – predicts that we will see more stations packed into fewer formats tomorrow than we see today. Indeed, I think this is correct. We will see fewer formats in the future and more competition for them. Why is that? That’s a separate post. Ask me about it later.

The fourth point – “Master the radio-social media marketing game” – confused me. So I asked Gordon what it means. Here’s his reply:

Radio is the original social media. It’s formed around affinities and is the only local media with enough personal clout to get people to profess their affinity via a bumper sticker, the analog equivalent of a “like.” If radio can harness those affinities on-air and drive listeners into digital social media to take action, they’ll really have something powerful. TV, newspapers, and yellow pages can’t affect that type of action. No bumper-sticker mojo.

Leave aside the notion of radio being the “original social media” – I think cave painting beats it by a few thousand years.

But read the rest of Gordon’s response carefully. It says something important. It says that many (but certainly not all) listeners actually love the stations they listen to. They don’t just “like” their favorite station, they love it. Can you possibly call the action of placing a logo sticker on a bumper anything less than “love”?

When Gordon writes: “If radio can harness those affinities on-air and drive listeners into digital social media to take action, they’ll really have something powerful,” the phrase “take action” means taking action on behalf of an advertiser – a client.

In other words, if radio can re-engineer the social media megaphone currently shouting to the audience about the station – and instead direct its power towards clients in such a way as to facilitate, encourage, motivate, and incentivize consumer action on behalf of those clients, that’s winning recipe. Social media, you see, can help radio create much-desired ROI. And that’s a compelling future.

Especially one where, as Gordon predicts, radio and all other local media will be buoyed less by local ad dollars and more by their innate expertise in promotions.

If you missed the Borrell report, go here to review the whole thing.

But do it with an open mind.

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