Radio’s Future Is Off-the-Air

Sounds funny doesn’t it.

Like a headline in a consumer publication. You know, where the reporter always ends the article with “stay tuned” or mentions the word “static” in the text – an early indicator that they don’t know what they are talking about.

Radio has been raking in tons of new revenue from Internet, mobile, webcasting and pre-roll commercials to the tune of 18% last month alone according to the RAB. Meanwhile traditional on-air national business is down 17% and local is down 8%.

All this non-spot revenue is in sharp contrast to the 8% decline of on-air revenue for the same period.

The recession is going to cause a flat business like radio to post declines at the end of this year and possibly next. The best radio can hope for is to finish flat beyond that because it is a business without a future generation -- that's a big reason. That generation was lost to – new media.

The non-traditional upswing is what I have been begging radio people to focus on.

Spend money on it.

Go out and learn about it. Not just that you can stream your terrestrial signal on the Internet but why the next generation is not going to listen to your terrestrial signal streamed on the Internet.

And radio has to find a way to get in the content business to generate revenue from the next generation or else it dies as its older audience continues to age.

If you think you know the next generation, I can assure you that you don’t. Become experts of generational media as Steve Jobs is. Not just the CEO (that would be a good place to start, by the way), but retrain everyone.

I see some glimmers of hope.

Dan Mason at CBS is going full throttle into new media. He’s building webcasts for AOL distribution, on CBS-owned Last.FM, on his HD channels (lots a luck on that one), and on their own CBS stream. There’s a great new channel. Dan’s got interesting niche projects going on like a psychic radio channel and so on.

Good start.

I am convinced radio can be the provider of content for a new generation while it bolsters its traditional on-air fare for the available audience which, as I have said many times before, does not include the next generation.

You don’t have to believe me – look at your own RAB numbers to see what happens when radio even dabbles a little in non-traditional online and mobile content.

Here’s a preview of the challenges ahead:

1. Content for the next generation cannot sound like radio. It’s okay to make your streams mini-radio stations if the target is older Gen X and Baby Boomers, but this strategy will likely fail to bring you new age listeners.

2. Radio must loosen up control on content. Understand the true importance of mashups and consumer control of content. To proceed by building interesting channels based on topics and music genres will not be enough to win a meaningful market.

3. Social networking is important – and I don’t mean Facebook and MySpace. Social networking is more complex than that.

4. On-air and online do not – and probably should not – be tied together. They are separate businesses. One attracts older listeners and the other is where the next generation lives. Never the twain shall meet.

5. Podcasting will be the new broadcasting.

6. Technology is expanding exponentially but our understanding of the sociology of listening is not keeping up.

So, kudos for the few radio execs who are trying to craft businesses that might have a presence in radio's missing next generation.

As Yogi Berra said, “when you come to a fork in the road, take it”.

For those of you who would prefer to get Jerry's daily posts by email for free, please click here. IMPORTANT: First you must check your mail or spam filter to verify your new subscription before service can begin.
Thanks for forwarding my pieces to your friends and linking to your websites and boards.