What's Next for Radio?
Inside tips for effectively using radio to drive return on investment

By Tom Barnes
September 19, 2003

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Radio is a specialty at Mediathink. Over the course of my career I've helped over 50 radio stations improve their revenue and their ratings by refining music, air talent, promotion, production and even sales. We work daily with leading stations around the country improving these product features for them. Radio faces many challenges that advertisers can benefit from. So, we risk biting the hand that feeds because we believe smarter advertisers will make radio better for everyone.

Why music radio is losing relevancy with consumers.

First, the tough part. Music, radio's primary source of content for the past 30 years, is in the midst of historic change. Radio is playing less new music. Consolidation and risk- management have caused radio to focus on playing more reliable "gold" titles. These titles are easier to research but they are also easier to download and share. Record companies, victims of their own procrastination, have fewer resources to devote to artist and product development. If the sad state of affairs turns around, it will be because the record industry properly leveraged the technology that now dogs them, not because radio got any more generous or adventuresome.

Mp3 players, of various types, can now easily hold more songs than most radio stations play. File sharing may be slowed but can't be stopped. In a matter of months it will be necessary to acknowledge that the PC has replaced the DJ (or, more accurately, program directors armed with a music scheduling program called Selector) as Music Mediator for the Masses. Right now eighteen to twenty-four year old adults, no longer relying on radio for exposure and guidance, are disappearing into their basements to find music rotation nirvana for their ever-growing collections of MP3s. As time marches on, those same adults move into and dominate the coveted 18-49 and 25-54 demographic.

Additionally, satellite radio is also coming on strong, despite detractors. XM and Sirius have over 3/4 of a million subscribers and are on track to hit a million by the end of the year.

But that's still not all. Office workers streaming high quality music over their networks have profoundly changed music listening. Real Networks purchased Listen.com earlier this year. Currently, Real has over one million paying subscribers, and the Listen purchase gave them the Trojan horse they needed to get into the big ISP's and MSO's for some serious distribution. So, while profitability, critical mass, and business models remain dubious, these music delivery options are not going away anytime soon.

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