12/05

Uh Oh: Radio’s Reach is Declining

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In  a new report from Nielsen, the news for the traditional radio space is decidedly unsurprising, and not the stuff of holiday cheer.

As Tom Taylor summarizes:

AM/FM’s monthly reach gained half-a-percent – but Time-Spent fell 3% over last year. And the 3% drop is consistent across African-Americans and Hispanics, two groups that have traditionally shown stronger listening than the national average. Two charts display the contrast between monthly reach for Americans age 2+ and their actual consumption of radio. The positive news – the “number of users” for radio grew 0.5% compared to last year, up from 257,420,000 to 258,743,000. [in Time Spent Listening,] last year’s “composite” figure for radio was 60 hours and 42 minutes, or 3,642 minutes per month. This year? 58 hours and 53 minutes, equal to 3,533 minutes. That’s a 3% drop.

What this summary doesn’t reveal is that quoting reach in actual numbers rather than percentages of total population hides the truth behind the numbers: Population rises every year! That means the whole numbers rise because there are more bodies in the US, not because the percentage “reached” is rising.

Specifically, the population growth rate in the US is roughly 0.7% per year. With growth in the “number of users” for radio of 0.5%, that means relative reach is declining, not growing.

I’ll repeat that for emphasis: Radio’s reach is declining (albeit modestly), not growing. And TSL is declining much faster.

If “reach” is not defined as a percentage of the population, then the number becomes utterly meaningless and without context.

Remember that these small differences in growth rates are exponential, so they expand over time.

More from Tom’s summary:

Teens spent about 36 hours a month listening to radio. That compares to nearly 59 hours for all Americans, age 2+ – so teens listen about 39% less.

Teens listen about 39% less.

This relates to my recent post about the diminished value 16-24’s place on the distribution channel called “radio.” Do you think they’re listening to less audio entertainment and information? Or simply to less on the “radio”?

So what to do about all this?

Let me state unequivocally what not to do:

  • Don’t indulge in feel-good presentations from feel-good keynoters telling you the sky is not falling.
  • Don’t try and dance around these statistics in the hope that you can bend them to your will.
  • Don’t suggest that traditional radio has a “PR problem” – what traditional radio has is a real problem
  • Don’t double-down on new ways to bring utility to the FM or AM dial – something which solves the problems of broadcasters, not consumers. Consumers are making their content decisions every day, and they refuse to be constrained by the audio distribution monopolies of old.

And what should you do? At the risk of sounding like a broken record (now there’s a dated phrase):

  • Recognize that you’re in the content business, not only the distribution business
  • Consumers are in control: Give them what they want, when they want it, where they want it
  • Invest in unique and compelling content you can own
  • Satisfy the desires of consumers and spark their passions
  • Leverage your content across multiple platforms in forms which fit the platforms
  • Develop workable business plans for digital, streaming, etc.
  • Partner with other media platforms to leverage their strengths against your weaknesses
  • Recognize that the market for audio entertainment and information is growing even as the market for traditional FM and AM is declining
  • Plan for a future which leverages the attention your brand enjoys with audiences and the relationships you have audiences and advertisers. You’re not really in the “radio” business, after all. You’re in the business of connecting consumers and clients via your megaphone across all platforms. Invest in that future.

That’s enough to get you started, isn’t it?

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