There’s a much bigger, more ominous picture in play for radio here. We’re really on the cusp of a technology shift which has been underway for a while, but is poised for an accelerated takeoff as the pieces fall into place.
Consider how quickly DVD sales and rentals sank once Netflix became available as a streaming model, and then Internet service providers began ramping up speeds to allow customers to take advantage of it. Cable cord-cutting ensued at a fairly stunning pace, and now we see everything is moving to VOD apps. This has been massively disruptive to TV, cable and video businesses. Watching TV no longer requires watching a TV channel. The way people consume video series and movies has dramatically changed in a very few short years.
So, now here we are with radio, and audio usage habits which trail those of video but probably not for long. The audio streaming services are already in place but the challenges with easily connecting to them in the car have helped radio keep its dominant role on the road. However, the connected car is a priority for auto makers now. Satellite and streaming apps already occupy a more dominant place than AM/FM radio in the dashboard of many, if not most new cars. And now we have rapid rise of the electric car with its big-screen control center where things like connectivity and new tech are really prioritized, and AM radio has been dropped completely.
When people use a streaming app, they aren’t all using it to stream a radio station. They use a service like Spotify that allows them to listen to music customized to their taste without commercials. And they listen to podcasts to hear favorite shows on demand, and to pause, rewind, skip, etc., just like they’re accustomed to doing with those Video on Demand services at home. I believe these habits will overtake the usage of traditional, live, linear radio as streaming uptake grows further.
All of this will devalue linear broadcast AM/FM radio at an accelerating pace, and the streaming replacements largely won’t resemble radio as we’ve known it. During this transitional period, the buyers of distressed radio stations are going to be these deep pocketed religious broadcasters who will gradually transform the FM dial into an agenda-driven wasteland like we saw with shortwave and AM radio during their declines. In that respect, the religious broadcasters are more a symptom than the cause of the decline.
