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Radio’s evolution to digital revenue is do-or-die


From MediaPost in relation to TV ad revenue:

[Veteran Bear Stearns analyst Spencer Wang] points out that digital revenues are minimal compared to overall sales, and not likely to move the needle in the next several years. Generating digital ad sales for repurposed content online “has not materially changed the top-line growth rate, given the conglomerates’ large base of legacy revenues,” Wang said. Even as digital revenues grow annually at a compounded rate of 20%-plus, entertainment companies will strain to achieve an overall 5% to 6% annual growth rate over the next five years. For instance, newspaper companies have successfully grown their digital revenue base, yet have been unable to offset erosion in their core print advertising business.

This situation will be no different in radio. So it suggests two things:

1. So-called “legacy revenues” will decline as the ways for advertisers to spend their money proliferate.

2. Developing significant digital revenues is not optional – it’s a matter of survival for all media, including radio. I’m talking survival, folks.

As I have said before, this is not “non-traditional revenue,” it’s “new-traditional revenue.”

It’s time for radio to ramp up the experimentation.

It’s time for radio to invest in new media on a massive scale.

It’s time for radio to stop imagining that success can be achieved by consolidating and cutting until one day your entire group is run from a PC in a locked room like W.O.P.R. in the 1983 movie Wargames. No need for PD’s or air talent in that world. No need for marketing or research or promotion or staff. No need for anything but sales and – if you’re lucky – an ever-diminishing number of listeners. It’s Dabney Coleman and a big Central Brain that asks millions of listeners at once: “Want to play a game?”

Is that the kind of radio industry you want? Because if you mistake the current down market for a cycle rather than a trend, that’s exactly the one you’re going to get.

If we fail to sow the seeds for new revenues via investment that revenue will never bloom. This strikes me as mind-numbingly obvious, and I have a hard time believing the Wall Street prognosticators with their gloomy forecasts won’t see the same logic.

If anyone in radio is bold enough to share it with them.

It was the human ingenuity of a teenaged Matt Broderick that outwitted the Central Brain and prevented World War III.

Where’s that human ingenuity, radio?

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