Is it time for Radio’s “Requiem”?

So says a Business Week columnist, who actually refers to radio as “old-time” radio, as if Fibber McGee and Molly will be coming right up.

Then again, the undercurrent of his column – and a theme of mine for years now – is that the modern day equivalent of Fibber McGee and Molly should be coming right up. Because it’s exactly that kind of content which insulates a distribution channel (like radio) from sound-alike competitors who lack that very content.

Here’s what Business Week wrote:

As with newspapers, small-market radio stations have been insulated from their bigger brethren’s woes. And radio still boasts the odd trump card, formats that make up in uniqueness what it has lost in monopolized distribution: morning zoo DJs, rush-hour drive time, the Limbaughs of the world, and local talk. But of all major consumer media, radio is the least suited to an online transition. Industry executives fiercely deny this point, but consider the landscape. Newspapers’ ills are well-documented, and I’ve had much sport with them in this space. But the local paper’s Web site is almost always the dominant local online entity. Newspapers churn out tons of original content daily. Radio is built to a large degree on music it doesn’t own and syndicated talk shows. Both are available in countless venues online, which means radio Web sites have less unique stuff to attract audiences. And stations aren’t structured like newspapers. While their profit margins are much higher—try 40% and up—they also have much smaller news organizations and fewer bodies to create new content that can be slapped up online. Ryvicker says radio companies that are doing well in the Web are getting 1% to 2% of revenues from it. Hogan says Clear Channel Radio will get 5% of revenues from its 1,005 Web sites “very soon” but isn’t there yet. (Radio executives also extol the revenue potential of radio stars turning up on cable, à la Imus, or on local TV, but few can make that leap.)

Note the suggestion that radio as an industry has been “fat and happy” compared to other media, and that monopoly ownership of the audience’s audio attention is coming to an end.

This is correct.

It is also correct that not enough local stations have content which is unique enough to create a sustainable advantage when the competition with other media is head-to-head – as it is online.

This is because the radio industry has underspent on unique content – and continues to do so – and overspent (if you can call it that) on commodity content. This is a recipe for disaster, of course. So we should hardly be surprised to see it play out before our ears.

Where Business Week goes wrong, I think, is in underestimating the relationship that millions of radio listeners have with their favorite stations. And underestimating the value of “permission” that those listeners grant those stations to communicate with them, whether that communication is about station content or the benefits of various advertiser partners.

This is a huge advantage for the radio industry, one that has barely been realized to date when it comes to digital content. And woe unto those (outside the radio industry or inside it) who underestimate its value.

In the long run, your radio station is the loudspeaker for your content online. The “non-traditional revenue” will be today’s spot revenue, and the NEW-traditional revenue will be sourced online. Get this through your heads and we can start creating our future.

Just fight harder for the same spot-related patch of advertising grass, and the negative PR will build.

And with it will come increasing audience indifference.