Radio sucks

I personally have given up on commercial radio over a decade ago, perhaps longer. My own musical tastes more diverse than the crapola payola on the dial. Napster & Audiogalaxy, in their prime, were what radio used to be: a means to sample new music without having to invest 20 bucks prior to listening. Now I just listen to my own music on my iPod: at the office, at home, in the car; in the el, wherever. Radio sucks.

from today's Altercation:

Name: Barry Ritholtz
Hometown: The Big Picture
Hey Doc,
Back in July, we addressed the slow death of Radio in Radio's Wounded Business Model.  It generated more e-mail than any other comments I've made on Altercation.

It looks like the meme has gone mainstream:  This morning, Barron's cover story hits on many of the same themes: Internet broadcast and streaming, Satellite Radio, iPods, and P2P and how they are (heh heh) killing the industry.

As we observed last time, its their own damned fault. The industry -- Clearchannel in particular -- went for short profits at the expense of the long term relationship with their audience. They completely overlooked that their product IS THE AUDIENCE -- who they then sell to their clients, the advertisers.

The Barron's piece is subscription only. Here's a small excerpt:

Losing the Signal

Younger adults -- the key targets of radio advertising -- have clearly been losing their ardor for the medium. By one key measure, the number of listeners ages 18 to 34 has declined by about 8% in the past five years, as portable digital-music players, Internet radio programming and other innovations have started to take hold. And while the dollars spent on radio advertising have been essentially flat for the past few years, competing media like cable TV, the 'Net and outdoor advertising have been gaining steadily.

"It's over," Larry Haverty, a media specialist at State Street Research and Management in Boston, says of radio stocks' big run. "Something good happened in the 'Nineties; something less good has happened in the '00s. Every retailer is blowing its budget on advertising and radio is not getting any of it. If they don't get it now, they're not going to."
...
Investors, along with radio executives, may not be facing up to the full extent of the industry's challenges. While radio has always weathered past threats -- video did not kill radio's star, as a group called the Buggles prophesied in 1981 -- things could really be different this time.

Across the country, listeners are changing how they choose to receive music and news and talk radio. They are turning to portable music players like Apple Computer's iPod, streaming audio over the Internet and the emerging field of satellite radio to hear what they want, when they want to hear it.
...
Music downloading is one of the "fastest-growing digital phenomena ever," says Forrester Research Group. It predicts download services will generate more than $200 million in revenue this year, $40 million higher than forecast and up from just $36 million in 2003. In all, some 35 million U.S. adults have downloaded music, according to the Pew Internet & American Life Project, a nonprofit initiative.

Trends like that are causing companies to reassess advertising choices, to ensure they're getting the most bang for their buck. Accountability and return on investment are the priorities in advertising right now, and it's hard to say radio is providing much of either as listeners start tuning out. Among all people older than 12, only 14.6% are listening to radio during an average 15-minute period, down from 16% in 1998, according to Arbitron.

and more here
The Big Picture: Radio's Wounded Business Model :

Listen to music on the radio much lately?


If you answered “no,” you’re in good company. Americans are listening to broadcasts -- especially of music -- much less frequently then they used to.


And with good reason, too: Stations which were once a way to discover new music have become bland sources of uniform playlists. At present, the heavy emphasis (or over-emphasis) is on hip hop; This comes after a long dalliance with insipid boy bands. Listeners left in droves.


So it was with no small amount of amusement that we heard yesterday that radio giant Clear Channel (CCU) was announcing they were cutting back the amount of ad time they would sell on the radio each hour, to a mere 15 minutes per hour, starting January 1, 2005.


The "spin" was that the largest radio player in the U.S. Would be able to use this "enforced scarcity" to raise the value of each spot.


The reality was -- ahem -- somewhat different.


Madness to the Method Man: Lost in this charming PR hype was a simple fact -- Clear Channel’s fastest growth is behind it. When they were early in the process of consolidating and homogenizing U.S. radio, they a huge growth curve ahead of them. At an earlier point in their growth cycle, Clear Channel was able to wring out massive cost savings as they consolidated their network. That phase is now over.