Monday, October 01, 2007

AM, FM Radio Predicted to End in 15 Years

AM, FM Radio Predicted to End in 15 Years
TV/Radio Writer

In an address that made the musings of Nostradamus seem rosy by comparison, a respected industry observer warned radio executives Wednesday that their industry would all but evaporate within 20 years.

Michael Harrison, publisher of the talk-radio magazine Talkers, told a group at the National Association of Broadcasters Radio Show that competing technologies -- like Internet, Wi-Fi, podcasts and cell phones -- would all but fill the niche they now occupy.

"These are dark times for terrestrial radio," Harrison said. "And most people in terrestrial radio are in denial of it."

Meeting this week at the Charlotte Convention Center are more than 4,000 radio industry executives, on-air personalities and station owners for the NAB's annual gathering.

Harrison, who entered broadcasting in 1967 and has published Talkers since 1990, said he believes most listeners will abandon the traditional AM and FM radio services and migrate to new technologies in the next two decades.

"The next 15 years will be the demise of terrestrial radio as we know it and the rise of the extraterrestrial," he said. Just as Vaudeville gave way to movies and horses to the automobile, he said, radio will be overtaken by gadgets that serve people's needs more efficiently.

Radio isn't an industry in need of a pep talk -- profit margins of 40 percent are not uncommon at stations and listenership has held up well compared with the erosion of broadcast television.

But advertising revenues are flattening, innovations like HD radio have been all but ignored by the public and the industry is struggling with finding a revenue model that works with new technology like Internet streaming.

"It's amazing how little our industry is doing to slow down the deterioration," Harrison said.

What will succeed in radio in the intermediate years, he predicted, will be talk radio because it provides content that can't be duplicated elsewhere.

"That doesn't mean conservative talk, progressive talk or a person spending three hours in a room bloviating," he said. "I'm talking about the unhindered, infinite vista of what can be done with the spoken word."
He said he believes that ever smaller -- yet more valuable -- niches will be served by radio, ones that advertisers find attractive because of their pool of specialized listeners, drawn to programming serving their interests.

Music may vanish first
Music formats, which will be widely available from a variety of sources, are most vulnerable, Harrison said.Bill White, program director of Charlotte's WBT-AM (1110), told those attending that his station has found success by focusing intensely on community-oriented programming and by serving local sponsors. "And we have a lot of fun," White added.

Richard Neer, a sportscaster on New York's sports radio station WFAN, said although his station isn't a ratings leader in its market, it is highly successful because of the sports-talk niche it serves.

"It's going to be the last surviving dinosaur," said Neer, who lives in Mooresville and connects electronically with WFAN for his show. "It's specifically aimed at a very passionate audience."

Furthermore, Neer said, stations like WFAN are more resistant to upstarts in emerging media because the station's informational infrastructure includes reporters, broadcast talent and other journalistic sources. "I don't know how anyone in their garage 10 years from now can do what we do," he said.

Experts described NASCAR as a marketer's dream sport Wednesday, one so flexible that innovations for new advertising strategies are being constantly invented.

In a panel presented at the National Association of Broadcasters Radio Show, being held this week at the Charlotte Convention Center, marketing consultant Max Muhleman told delegates that branding strategies in NASCAR go beyond that of any other professional sport and tie the logos and products more closely to the athletes.

"They see them on the backs of the stars, on the chests of the stars, on the hook and trunks of these 200 mph rockets that run around the track," he said.

It is a long stretch from the early days of the sport in the 1940s and `50s, he said, when he recalled seeing stock cars sponsored by "Sue's Cafe" or "Smith's Chevrolet." Sponsorships for cars now run upwards of $25 million.

1 comment:

Taylor said...

I think you're right on! Music fm stations will go away in favor of talk. In 15 years, every car will have cheap wireless internet access. The latest trends are showing people are listening to radio at work through their computer over the internet. In one year, the percentage jumped from 12% to 20%. Terrestrial radio listening dropped from 88% to 80%.

And adults 18-34 favor their Ipods over radio.

Unless the industry changes radio as we know it is dying.