When Tonya & I started Remerge back in early 2007, we kicked-off the company with a whirlwind tour or radio stations throughout the Midwest (30 stations in 30 days). The very first slide we showed during our presentation looked like this -
Our slide clearly demonstrated that the radio industry (blue) had flat-lined as a $21 billion industry, while momentum and innovation were driving breathtaking growth for digital ad revenue (red). Our question to radio broadcasters was rather simple and straight forward: “How long before digital out performs traditional?”
Most broadcasters at the time, and many to this day, dismissed the obvious. At best, they paid digital lip service. While Clear Channel has used their broad reach to drive interest in the iHeartRadio app, there is still very little serious planning going on within the radio industry to confront new realities, and/or offer new solutions.
Radio revs for 2012 were at $17 billion, up 1% from 2011 – with the largest growth coming from… you guessed it… digital at 8%. While “up” is good, the industry is still down nearly 20% since we first did out presentation above.
Now comes a bit of info that should be slightly more disturbing to broadcasters… and it’s not merely the presence of Pandora, Spotify, Google’s new streaming solution, or Apple’s plans to join the streaming arena. Harris interactive just released the results of a study of over 2000 adults (not kids)… and 6 out of 10 feel terrestrial radio will be gone in 5-years.
Whatever challenges radio may have, their lack of attention to problem solving is certainly not helped by public perception believing radio is quickly becoming irrelevant… a feeling so strong, that 60% would predict an end to radio in 5 years!
Significant change is coming to the radio industry with or without their input. It appears peddling faster is no longer an option… radio needs to start shopping for a motor bike.