15 years left for radio: A foolish prediction?

By on Mar, 30 2013 with Comment 1

crystal ballFormer NPR CEO Ken Stern, who has just written a book on the current state of charities, found himself talking to Motley Fool about traditional radio, which he said may be gone in 15 years. Here’s why that prediction should be taken with a 50-pound bag of salt: He said the exact same thing 10 years ago.

Stern was asked about the proliferation of new competition facing AM-FM radio, coming from sources like them SiriusXM, Pandora, Spotify, iTunes, and what that would do to broadcast during the next decade.

“It’s a hard question,” he replied. “I’ve been making predictions about the demise of traditional radio for some years. About 10 years ago I said, “It has another 15 years. Now I’ll sit here and say it has another 15 years. Someday I will be right in saying that it has 15 years.”

Stern said, “Let’s face it: No one would build a radio tower now. It doesn’t make much sense in terms of all the options, but in fact there’s a built-in audience for it, a huge embedded audience for it now, and the force of habit.”

As for Sirius XM, Stern added that nobody would launch a satellite now, saying as new as that platform is, it is already dated.

RBR-TVBR observation: A long series of technologies and seismic social shifts have all had a crack at knocking radio out of business. Stern noted the results himself – radio is still an engrained habit.

The only reason nobody would build a radio tower now is that there is no space for them where there are enough people to form an audience. We guarantee there are plenty who would be thrilled to build a tower in any metropolitan area; and indeed, the clamoring for the smallest of towers, for LPFM and FM translators, is louder now than it has ever been.

Radio’s future is not guaranteed – but it has always shown an amazing ability to transform itself and adapt to new market conditions.

To our way of thinking, survival will key on holding on to radio’s core attributes which can not be duplicated by national digital platforms – in particular, the provision of compelling content geared to the tastes and needs of a population only the broad broadcaster knows; while at the same time making use of the best new digital technologies and taking a big heaping helping out of the slice of the advertising pie that is currently migrating in that direction.

If radio can manage this feat it will be around for many more years.

 

About The Author: RBR-TVBR has been reporting on the business of broadcasting for nearly three decades. Beholden to no one, it is independently owned.

  1. Ah, this must have been an April Fool’s joke. Otherwise, for the sake of NPR, I’m glad Mr. Stern left them. I can’t predict the future, but I can analyze existing facts and trends. If Mr. Stern had done that 10 years ago, he would have realized that satellite radio would never be capabile of taking away virtually any radio listeners and would eat into very little radio listening time (there are about 10 studies out now that lead one to conclude that music lovers and digital users are heavier users of radio than the average person).

    He needed to understand economics. Very people will/can pay a subscription for anything they don’t have to, especially when radio is free.

    He needed to understand motivation. People like localized information and personalities to entertain them. There are regional musical tastes and certainly localized news and talk topics. Satellite radio could not replace those (although they tried with local traffic in 4 or so markets and sneak selling local spots on local MLB teams). Not good enough to replace radio.

    As for radio, as RBR pointed out, as long as it understands it product, its market and keeps morphing with technology, it will be around for a lot longer than 15 years.

    He needed to understand that the digital doorways opened by the internet and mobile would become means of two way conversation and further connection between stations, personalities and listeners. Not doable on satellite radio (or any national service).

    Then he would have been able to focus on NPR’s needs, positioning, programming and future. Good that he is gone and someone is actually doing that for NPR.





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