Will the recession kill the radio star?
Print media has made many headlines this past year as the industry bemoaned hardships it has faced during the current recession. In addition to hundreds of editorial layoffs and buyouts due to budget cuts, the parent companies of Chicago’s two major newspapers, the Chicago Tribune and the Chicago Sun-Times, declared Chapter 11 bankruptcy this past year. Then there was the fall of a major metro daily, the Seattle Post-Intelligencer, which dropped its print edition in favor of the Web back in March. Bankruptcies and closures in magazines are also becoming regular news. With all the turmoil over the passing of print media and the rise of the Internet, why hasn’t there been more noise made over that other relic of media – radio?
Radio has seen hard times in the last 12 months. As reported previously by inVocus, media giant Clear Channel Communications eliminated 1,850 jobs in January, and an additional 590 full-time employees in May – overall, 12 percent of its workforce. And according to quarterly fiscal reports released by Friday Morning Quarterback (FMQB) magazine late last month, most media companies continue to watch their revenues plummet.
In the midst of all this negative news, how has radio managed to stay afloat? In short, there are two reasons radio remains strong: its proclivity for change, and its imperviousness to becoming obsolete.
Most people may not realize it, but radio stations go through changes quite often. Whether it is the format the station plays or the company that owns a particular station, radio stations rarely disappear off the face of the planet. If you ever turn to your favorite station one morning and find that the Modern Rock station is now a Top-40 station, that’s an example of radio’s ability to adapt. The station may be different, but it’s still there.
But what if the company that owns the station gets in financial trouble, or worse, goes bankrupt, as a result of a loss in revenue? Before the last couple of years, it was common for media giants like Clear Channel or Cumulus Media to buy up stations owned by smaller companies or private owners in order to corner a certain market. Since the recession, however, the practice remains the same, it’s just that roles have switched. In order to pay off mounting debt and stop the bleeding of revenues, media giants are selling off smaller market stations in order to concentrate on larger markets. For example, earlier last month, CBS Radio sold its four-station Portland, Ore. cluster to Alpha Broadcasting, a new local media company that surfaced in May. CBS gains capital, the stations all survive, and – as an intangible benefit – the local media company can give the station back some of the local flavor it may have lost being run by a larger broadcasting company.
Also looming over radio is newer technologies like the iPod, Internet radio and satellite radio. Despite the prevalent use of iPods and programmable Internet radio applications like Pandora, radio still remains strong due to its accessibility, mobility and ease of use for those not familiar with newer technologies. While driving, listeners are more likely to get the latest news, weather and traffic updates from a local news radio station than they are from an iPod, because, like television and the Internet, the information that radio transmits is always fresh. It’s a quality that print media is still struggling with, evidenced in clumsy forays online This past decade has also ushered in satellite radio, a major competitor and advancement to terrestrial radio that offers more choice in programming, while eliminating commercials and keeping the qualities of mobility and freshness. But since the beginning of the recession, inVocus researchers have watched satellite radio lose listeners due to the subscription fees that are required to stay tuned in.
It’s hard to imagine radio disappearing in the same way people fear print media may one day vanish. Radio is simple, it’s free, and despite its age, it still remains a modern tool in wide use today. Formats may come and go, but radio’s ability to adapt will keep it around for much longer than one might expect. After all – it did survive television.
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