By Jason Menard
To paraphrase Mark Twain, the reports of radio’s death have been greatly exaggerated. But the future of radio may, in fact, involve a twist on the old saying: tomorrow’s radio will be less rock and more talk!
With all due apologies to the Electric Light Orchestra, rama-lama-lama rock and roll won’t be king, but rather content will rule the airwaves. And the savvy broadcaster that invests now in developing locally relevant content will find themselves at the vanguard of the next generation of radio.
The Canadian Radio-Television and Telecommunications Commission recently released statistics showing that revenues and profits are rising for Canadian commercial radio. According to the report FM radio revenues grew by 11.8% in 2005 over the previous year to a little over one billion dollars. FM’s profit before interest and taxes also increased by 19.6% over the same period, from $220.3 million to $263.3 million. And while revenues for AM radio decreased by 0.7% year over year, their profit before interest and taxes rose four-fold from $3.4 million in 2004 to $13.6 million in 2005.
However, instead of resting on its laurels and patting itself on its back, commercial radio should invest those resources back into one word: talk.
The question exists as to how radio will be able to compete with the onslaught of next-generation technologies that currently exist and threaten to eat away at marketshare. Already a generation that has grown up thinking that the Sony Walkman is a relic have embraced the idea of plugging in their I-Pod into their car stereo and programming their own music.
The place to be to hear the latest artists won’t be on-air, but rather on-line, and radio must realize that the model of free music distributed over the airwaves is one that just can’t last. When listeners have the option to direct their musical experience as opposed to being dictated to by some program director, it’s clear as to which path future generations will take.
But the one thing that the Internet can’t replicate is content. The AM model, which relies heavily on talk and analysis, ironically will be the one left standing. Personalities, perspectives, and information will lead the way, more than the latest band or track. As our world continues to shrink and people have the news of the world literally at their fingertips, the move towards local perspective and analysis will be a natural progression.
Many so-called local stations actually import a significant amount of their content from abroad. In Canada, many of our stations pull from not just major media centres like Toronto or Montreal, but their syndicated content originates from the United States. And while that model may be cost-effective in the short run, it’s a myopic view of developing market share and listener fidelity.
If the listener wants to hear Toronto radio or a show originating in Los Angeles, they can either jump on the satellite bandwagon, listen to streaming broadcasts on-line, or subscribe to podcasts. What radio stations must do to set themselves apart is create dynamic, engaging broadcasts that leverage the local flavour, talent, and perspective.
Unfortunately for the station manager or program director whose jobs are predicated on ratings in the here and now, return-on-investment is a concept that can drown out all other ideas. Putting money into developing programming for the future is a wonderful idea, but the fact of the matter is that the return on those dollars may not come for a few years into the future.
But perhaps that future investment can be offset by opening new revenue streams that have, to date, been sadly undervalued. Many stations do offer an on-line, streaming version of their broadcast content. However, the advertisements remain local. Where is the foresight to approach advertisers specifically based upon the on-line demographics.
In many cities, ex-pats flock on-line to listen to a taste of home. So why not approach service providers and vendors that either export local products or offer services like travel and hotel accommodations to those interested in coming back and visiting family. The Internet is more than just a delivery method – it’s an entirely underutilized revenue stream that can open up previously untapped advertising budgets.
No matter how small the world gets, the idea of ‘there’s no place like home’ resonates within us all. Local content, local perspective, and local talent distilling the changing world down to a level that means something to local listeners is the future of the industry.
The gravy train that the industry is riding now can derail quickly without those steering it having an idea of what the future conditions are going to be like. Now the question is are those at the controls willing to turn the wheel and take control of their direction, or are they going to plow straight ahead into an uncertain future?
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