Is Online the Future for Radio?

People love to make forecasts and predictions, especially in our industry.  As a Denver based advertising agency, CCT Advertising is always keeping an eye on current trending and is constantly evaluating the movement towards all things digital that is keeping the predication meter at an all time high.

One subject there’s been a lot of chatter about over the past couple of years is how terrestrial radio listening will change in the digital world.

According to Radiostreamingnews.com, there was a forecast in 2005 by Kagan Research that U.S. terrestrial radio broadcasters would be seeing a significant percentage of their total revenue from HD radio, mainly due to multi-casting abilities. They also forecast that advertising-supported “now” channels, offering local information such as all-the-time weather, sports and traffic, would bring in a large chunk of revenue. HD radio has not been developed as a revenue stream and these predictions have not come to pass.

However, there is general agreement in the industry that the Internet will significantly impact radio’s future.  Recently released numbers from the Radio Joint Audience Research Ltd. (RAJAR) show that the popularity of digital radio continues to increase, and there’s no doubt that more people are listening to radio on mobile phones today than even a year ago. At the same time, trends indicate that AM/FM simulcast streaming audiences will continue to grow for at least the short term, while Internet only radio stations like Pandora are continuing to increase in popularity.

While all of these content options offer revenue potential for stations, mobile seems to be the current hot button.  With Smartphone owners projected to reach 221 million by 2015, we can certainly expect more apps like Clear Channel’s iHeartRadio, to pop up and try for a share of this growing audience.

This changing landscape will affect not only whether an advertiser uses Internet radio as part of their marketing mix, but how they use it as well.  For one thing, online promises to allow more time spent listening than we’ve traditionally seen since radio will be able to go wherever the listener goes rather than being limited to a home, office or car.  And, time of listening may evolve as well.  Peak hours for online listening are late morning and early-mid afternoon versus the traditional “drive-times” seen with terrestrial radio.

So is online the future for radio?  It will almost certainly grow in popularity and continue to offer audiences more listening options while delivering varied revenue streams for continued profitability.  That sounds like a yes to us!

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