Terrestrial radio and other faltering channels

This morning, I flipped a switch on my clock radio. From now on, instead of being jolted awake by Jordin Sparks singing "Tattoo" for the kazillionth time, I'll be gradually woken up by nature sounds.

Normally, such things aren't very noteworthy. The only reason this stuck in my head is that it represented the final nail in the coffin of my terrestrial radio consumption.

That's right. Over the past few years, my relationship with terrestrial radio has slipped. I used to listen to terrestrial radio all the time -- on my clock radio in the morning when I woke up, in my truck to and from work, while I was working. All of that terrestrial radio consumption has been gradually wiped out.

This morning after switching over to nature sounds, I got ready for work and jumped in my truck. On my way to the train station, I listened to about 10 minutes' worth of XM's uncensored comedy station. On weekdays, I drive for a total of about 20 minutes per day, and I trade off between listening to my iPod through a hardwired iPod dock and listening to satellite radio. There are probably hundreds of choices available to me on satellite. I listen to only a small handful of channels -- liberal talk radio, comedy, a couple of music channels and sometimes baseball when it's in season. The iPod gives me instant access to all the good stuff in my CD collection, so there's a tremendous amount of choice there, too.

After boarding my train, I plugged in my iPhone and surfed around Flycast. No, not the old ad network that some of you old-timers worked with back in the late '90s. This Flycast is a streaming service with nearly 1,000 channels of audio content. While it's true that some of the content consists of simulcasts of terrestrial stations, I stick to genre-specific channels that don't exist in the terrestrial space. Instead of rolling my eyes at the notion of hearing "Tattoo" again, I listened to about 10 heavy metal bands I'd not previously been exposed to and made a mental note to review the tracks in my history -- maybe I'll purchase some of them on iTunes at some point. The rest of my commute was spent getting caught up on podcasts I missed.

At work today, I'll be cranking away on internet strategy while listening to anything that's in my record collection that suits my fancy at that particular moment. I might also hook in to a couple internet radio stations during the course of the day. One thing's for certain: While I've got standalone music players and mobile devices laying around my office, as well as software players on my computer -- all of which I can use to listen to audio content anytime I like -- I no longer have a little box radio on my desk. I'm in my office for up to nine hours a day. That's nine hours of potential consumption that will go to digital media and be taken from terrestrial radio.

My evening commute will probably look a lot like my morning commute, except I might be plugged into my MacBook Pro instead of my iPod or iPhone. (Yes, Apple runs strong in my family.)

By no means do I consider myself an early adopter of many of these technologies. As I look around at my fellow LIRR commuters, I see that almost everyone has a digital music player of some sort. A few have other sorts of devices like CD players or small radios, but the trademark Apple white headphones tend to dominate.

Not to project this microcosm of digital media consumption to the general population or anything, but it did occur to me that I just cast myself into what Adam Gerber and others have called "media potholes" -- the people you can't reach via a specific medium because they don't consume that medium. Unless I happen to be passing an electronics store with a stereo blaring, it's highly unlikely that you're going to reach me with a commercial message via terrestrial radio.

How many more like me are there? Perhaps a better question is, "How many more like me are there likely to be in the near future?"

I think it's important to look to other media that have seen marked decreases in consumption and advertiser support. Newspapers are in trouble. While everyone else was innovating and content consumers were abandoning the channel, there was this eerie quiet period where the product became homogenized and control became more centralized.

See that happening with radio? I do. How many of the rest of you will scream loudly the next time you hear Jordin Sparks? How many of you will simply change the channel?

No, terrestrial radio won't go away. It will just be de-emphasized to the point where it will never be as powerful as it once was. Sure, there will be things that will grant a temporary stay of execution (HD Radio?), but the slide toward the inevitable will not be denied.

Tom Hespos is the president of Underscore Marketing and blogs at Hespos.com.

 

Comments

Andy Slater
Andy Slater November 21, 2008 at 10:05 AM

Tom, don't blame all of terrestrial radio for poor taste in music! Set your dial to something a little less offensive. In all seriousness, as someone who cut their teeth in the media biz schlepping radio spots (12 years, thankyouverymuch) one would think I'd try to hang on and be loyal the industry that gave me my start. But, I switched over to Satellite radio 3 years ago myself.

Tom Hespos
Tom Hespos November 21, 2008 at 8:49 AM

Steve:

Digital music players have already cut into terrestrial radio's consumption significantly, and they still have a way to go before they're ubiquitous. One can bank on seeing the march toward ubiquity happen over the course of the next few years. Apple will sell more than 10 million iPhones this year alone. They've already sold many more iPods. And they own only a fraction of the digital music player space. Ubiquity is inevitable as prices drop.

Speaking of prices dropping, add-on GPS units were a very popular gift item last holiday season for the early adopters. This year, they're expected to be a top-selling electronics gift item. Units that sell for $149 include trial subscriptions to local traffic and weather information. Right now, people will have to pay to keep those subscriptions active, but what happens when those companies shift their business models? MSN, which supplies local content to my GPS unit, could EASILY give the service away and charge local businesses and franchises fees to enhance their listings on the service. It's the Yellow Pages marketing model. Except in this case, the ads would literally drive traffic and be quite accountable to the advertiser. Know where the money will likely come from? Radio budgets.

As you alluded to, in order to gain approval for its business model, satellite radio had to essentially agree to avoid competing in local markets with terrestrial radio. With their market-based traffic channel experiments, it's clear they don't intend to honor that commitment. What happens when they roll out in the top 200 DMAs? Whether XM/Sirius is right or wrong is essentially immaterial - the FCC will soon have to decide whether it wants to be in the business of protecting outdated business models and limiting competition. I'm guessing that as President-elect Obama brings more transparency to the U.S. government, it will become more difficult for the FCC to continue to protect terrestrial radio companies, especially those who have a homogenizing effect on the content like Clear Channel.

More choice is rolling out to people in the form of digital music every day. The effects are being felt ahead of the penetration, which to me suggests that fragmentation is going to make terrestrial radio a very tough business to be in.

steve virissimo
steve virissimo November 20, 2008 at 5:13 PM

Tom, you're spoiled.... between your satellite radio, I-Pod and your GPS system (no need on a train) you have many more toys than most people can afford. Between the three what did that cost you and continues to cost you every month? I doubt that satellite radio will ever get to the point of "local content" despite what you or they say and try to do with repeaters that have been proven to be illegal. As of today they don't supply local content nor local commercial information. Yes, I would like to hear about the new sports bar in my town as well as when the major concerts are coming to my city.Tom, how do you hear and get your new music? As you know, many radio stations display the name of the song and artist on the face of the radio .This allows you to download it and buy it at the same time. But then again, I know you know this already. Thanks for the thoughts.

Tom Hespos
Tom Hespos November 20, 2008 at 2:27 PM

Mark - I agree that radio needs to invest in quality programming to get its relationship with the listener back. The problem is that the listeners expectation of "quality programming" has shifted well beyond radio's capabilities. Remember how you used to stick with a station through a few crummy songs while driving in your car? Listeners are much less apt to do that these days. Why suffer through music you don't like when the music you DO like can be carried with you or beamed to wherever you are?

Steve - I also agree that radio needs to reinvent itself. I'm just not sure that radio will always enjoy an advantage when it comes to localization and immediate information. My Garmin GPS unit can not only give me traffic conditions, but it can route me around them. Why bother waiting through three commercials for the traffic and transit report to come up? As for localization, streaming solutions (and even some satellite content) deliver on local promises, despite the FCC's attempt to keep satellite from competing on the local front.

steve virissimo
steve virissimo November 20, 2008 at 1:11 PM

Well being a liftime west coast guy I don't have the luxury of commuting by train to work. Out here we gotta be on the freeways to and from everywhere and the commute isn't getting any shorter. Therefore we're a captive audience. Yes, some ( very few) pay for satellite radio ( assuming they survie their financial mess)and yes some may have Ipod capabilities in their car. That again is assuming you don't mind paying 99 cents per song to load on your $100+ I-Pod. But that's not gonna give them the news and traffic information needed daily. As far as at work listening, nearly every terrestrial radio station offers their programming live via streaming. And it's often interactive offering the opportunity to interact with the radio station online for information and prizes. The days of the portable radio on the desk are long gone. i stream at work about 3-4 hours every day. I do agree that radio will never be what it once was. However, radio has always managed to reinvent itself. It's strength has been and always will be localization and immediate information.

Mark Lassoff
Mark Lassoff November 20, 2008 at 9:04 AM

HD radio is perhaps the most unsuccessful role out in the history of the broadcast industry. It certainly will not save terrestrial radio. The author here is pointing out something many realized a long time ago-- the corporate homogenization of terrestrial radio caused by cost cutting and the drive for efficiency has cause radio to lose its soul-- and its audience.

Instead of putting money in to research, larger sales forces, cheesey off-air marketing programs, etc., radio needs to invest in quality programming to again forge the personal relationship it once had with its listeners.