The changing face of radio


by Tim Feran
The Columbus Dispatch.com
Sunday,  April 13, 2008

                      

Like many other communication mediums, radio is in the middle of a battle -- for listeners, for profits, perhaps even for survival. The adversaries include MP3 players, cell phones, satellite services and the infinite dial of the Internet. A wide variety of music is offered free or for a low monthly fee, while radio -- one of the oldest electronic mediums -- scrambles to defend its turf.

Figures for 2007 show that spending on radio advertising dropped 3.5 percent (to $10.7 billion) from 2006, according to TNS Media Intelligence, and was surpassed for the first time by spending on Internet advertising.



The audience, though still robust, has likewise eroded during the past decade: Arbitron reports that 93.3 percent of people 12 and older listen to the radio at least 15 minutes a week.

Can radio as it has been known for nearly 100 years survive?

Industry leaders say yes.

To get the word out about radio and its latest attraction -- digital multicast "high-definition" broadcasting -- the National Association of Broadcasters has launched a promotional campaign: Radio 2020.

"Americans continue to have a love affair with radio," said David Rehr, association president. "More than 232 million people each week, according to Arbitron, listen to radio. And they think of radio like electricity or the washer or dryer. They love it, but they don't think about it very much, because it's so accessible, so free, and it's everywhere."

Industry leaders plan to save radio not by avoiding new technology but by embracing it.

Here are some of the plans:

New delivery systems
While talk radio in particular has embraced iPods and other MP3 players that allow listeners to download radio shows for later listening, the industry is actively pushing for MP3 players that include a radio for live reception.

In a recent survey by the National Association of Broadcasters, "We found the No. 1 requested adapter on iPods was FM adapters," Rehr said. "You go through all these bloggers' comments, and most of them are all talking about how iPods would be so much better if you could get radio on them."

An even more promising delivery system is on the horizon: cell phones.

"If you've got cell phones that also can be MP3 players, how hard is it to add a chip so that they could pick up FM and HD? Not hard at all," said John Crenshaw, operations manager of Clear Channel Columbus.

The move toward listening to music on cell phones is well under way. A recent study from TNS Global Telecoms found that 43 percent of cell-phone users listen to some form of music on their phones. While much of that comes via MP3 players, use of FM players on cell phones could be ready to explode. About 30 percent of U.S. cell phones can receive FM radio, and the industry is hoping for more, Rehr said.

According to surveys by America Online, more than half the respondents say they would listen to the radio

on their cell phones if it became available.

Satellite

The future of subscription radio remains in limbo, as the two giants, Sirius Satellite Radio and XM Satellite Radio, battle over Sirius' $5 billion bid for XM. The stakes are high: Without a merger, neither satellite radio company thinks it can become profitable and survive.

The Justice Department in late March approved the buyout, saying the deal was unlikely to lessen competition or harm consumers. The companies have a combined 17 million subscribers.

Sirius proposes to keep separate subscriptions for XM and Sirius customers, ultimately offering "a la carte" services that will provide options with fewer channels and lower prices.

Internet

Many central Ohio stations can stream audio live from a Web site. New, portable receivers that allow listeners to plug into Wi-Fi as easily as listeners use old transistor radios will open up vast opportunities.

A study to be released this month by Arbitron and Edison Media Research shows that online radio listenership grew from 29 million a year ago to 33 million. That means 13 percent of Americans age 12 and older listened to online radio during a recent week.

Arbitron said that while 42 percent of listeners use their computers to tune into Web streams made available by traditional radio stations, 56 percent are choosing Internet-only stations.

The number of people who listen to Internet-only stations may be large, but it is diffuse, Rehr said.

"We're always going to have new entrants, people with niche markets who put on Internet stations that offer classical ballroom music produced in Jamaica," he said.

"On the Internet, you can find 50 other people who want to listen, too, but for large bodies of people who care about genres, radio is well-positioned."

High definition

The big push is on among the old radio companies to switch to high definition, a system that will enable them to multicast three or more channels over one signal -- turning what was a single station into several at the flip of a switch and allowing new segments of the audience to be served.

"Right now, you have to seek it out," said Peter Ferrara, president and chief executive officer of the HD Digital Radio Alliance. "But within five years, every radio will be HD. Kind of like when you walk into Best Buy today, you don't ask for a color TV anymore."

"We had to struggle getting consumer devices out there," Rehr said, "but it's going to be an exponential increase soon. Now we have them in Ford, Volvo, BMW. It's moving forward."

Sales outside of cars have been slow, however, and that has hampered HD radio's growth. Bridge Ratings projects that it will be another two years before there are more than 1 million listeners nationally to HD radio.

Based on current trends, Bridge Ratings estimates that HD will have fewer than 10 million listeners by 2020, while 250 million will still be listening to "terrestrial" radio and 180 million will be listening to Internet radio.

The multicast capabilities of HD radio are already being put to use by many Columbus stations, Ferrara said.

"WCOL is doing country and new country, and that's not unusual.

"Most stations are doing one of three things with HD," Ferrara said, "straight brand extension like WCOL, or doing what I refer to as a demographic parallel -- serving the same audience with a different format.

"A good example would be a station that has adult contemporary music (WSNY, for example) and would offer female talk on its second channel.

"The last thing stations do with HD is sort of a diversity experiment, fill in the blank, something that has nothing with a current format or a current target audience, but someone at the station says, 'Wouldn't it be great to have . . . ' whatever format you can imagine would fit an unserved niche."

tferan@dispatch.com

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