Internet Killed the Radio Ad

A story in Radio & Records last week stated that, for the first time, total Internet advertising dollars exceeded total radio advertising dollars. Advertisers are starting to migrate toward the web at the expense of traditional media.

Another scary thought for the radio biz: A former big-time radio executive was anonymously quoted as saying that radio is irrelevant to anyone under 24, and that it is losing importance among the coveted 25-54 year-old demographic. Logic says to give the young folks what they want, but they like the freedom to pick their own songs in their order, with no commercials or mindless DJ chatter. They are not likely to come back to radio. The other strategy is to abandon the youth and program to the old folks. That might be a good short-term strategy, but what happens when they pass away? Radio finding itself between a rock and a hard place.

I suggest that any company heavily invested in radio sell now, before the licenses and physical plants begin to decline rapidly in value to the point of worthlessness. And it will happen. The only variable is time.

Wednesday, September 5: Jumping Through Hoops

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4 thoughts on “Internet Killed the Radio Ad

  1. You’re the radio expert, Andy. But I wonder if radio didn’t kill itself when the corporate behemoths focused totally on brokering audiences for advertisers and not one bit on delivering engaging content to listeners. Recently returned from a vacation and 30 hours behind the wheel. Took the radio off XM only once, and that was to listen to the Indians game on the way home.

    On the plus side, the Internet is breathing new life into the music business, and the focus seems to be on making good music vs. making lots of money. Maybe the Net will also lead to a rebirth of a radio product that is again listener focused. And maybe it’ll spell a slow and painful death for Clear Channel. They deserve it!

  2. One of the main reasons that music radio is declining is that everyone has different tastes, and stations try to program the songs that are common favorites to the demographic. Even people that like the same artist will have differing opinions on that artist’s songs.

    Steely Dan pointed this out brilliantly in their song, “FM”. Donald Fagen lamented that there was “….nothing but blues and Elvis and somebody else’s favorite song.”

    Unfortunately, stations with eclectic playlists tend to get whacked in the ratings. When you try to go deeper than the standard format songs, many listeners will switch stations. I witnessed this twice, as a listener and an employee. In Columbus, Ohio WLVQ-FM came on in 1976 with a tight rock playlist and blew away freeform WCOL-FM in a mater of months. In Birmingham, AL, I helped launched WAPI-FM, another tight-list rock station. We forced rival freeform WRKK-FM to go country in a matter of weeks. This was in 1981.

    The web has spawned some interesting radio content. The problem here is that there is a move by the recording industry to jack up the fees these stations have to pay. The small guys won’t be able to survive.

    Believe it or not, Clear Channel has some very cool formats online and on their HD radio channels.

    Check out their format lab: http://www.clearchannelmusic.com/formatlab/

    I’m starting to ramble, so I’ll try to wrap it up. People like to pick their own music. With this iPod/web mindset, they don’t need radio to discover and play music. That in itself will help kill radio.

    Compelling personalities and content will be essential fo radio in the near future. Howard Stern caused a big rumble when he defected to Sirius. Expect more to do the same.

    I am hooked on Sirius, but hope to get a dual XM/Sirius hookup with my new wheels later this year, unless they merge.

    You really didn’t need to leave XM for the Indians because they broadcast all MLB games.

  3. Like I said, you’re the radio expert. But no, I will not listen to clear Channel unless I have no choice, like when I tune in the Indians game on WTAM). To me, CC is the WalMart of the airwaves. We’ll see if HD can save their sorry ass.

    Now that you mention it, we got the first 5 innings of the Tribe game on XM, but switched to WTAM when we got within range. XM was carrying the Tampa Bay broadcast, and those guys were practically asleep, but I can hardly blame them.

  4. Clear Channel is a significant investor in XM, and it also provides programming to it. So you are listening to them in a roundabout way.

    I know what you’re saying. I worked for them. They just took advantage of the relaxation of ownership restrictions, which was part of the Communications Act of 1996. They took on a lot of debt, and are in the process of selling off over 300 small and medium market stations. They might become the K-Mart of radio!

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