State of Radio in USA and why people pay for it.

[Mido3737]

As someone living in Ireland and listening to radio in Europe and America each day I would like to know how your view radio on Fm online and why more people are stumping up cash every month to pay for their fav services.Couple of points is Fm radio so bad that you rather pay for it when option like online radio does such a good job minus 15 mins ad breaks.Dont get me wrong here in Europe especially Ireland and UK the market is bland and boring with major media groups running the show.But LBC and others tried a pay wall but nobody bought into the idea . I guess what I'm saying is are you getting value for money for radio services you pay for ?

 

[TheBigA]

I guess what I'm saying is are you getting value for money for radio services you pay for ?

Apparently yes. There are several factors. One of the tops, as you point out, is that when you pay for radio, you avoid commercials. For some, that's important.

Another factor is the limited range of FM. Some people are long distance commuters, and satellite covers the entire country.

But a growing factor has to do with the limited number of formats available on FM. It's harder to find a lot of niche formats. So for people who live in NYC and want country music, satellite is perhaps the best option.

Still with all that, satellite subscriptions are still less than 10% of the public after 20 years.

 

[PTBoardOp94]

I used to spend hours a day at my office listening to classical and jazz radio. In a way, I paid for that by sending financial donations to the non-profits which provided those formats. Those stations changed formats, so I stopped listening.

So now I listen to streaming services, and the number of hours a day I listen to radio is dramatically smaller.

 

[seattlesarchiebunker]

There are a couple aspects that probably explain why streaming services are popular here in the US:

1) Geography. Americans tend to be spread out and have a much larger mileage distance to commute. As an example, I commute 38 miles/day each way to work. My father is still commuting 55 miles to work each way and has been for near 4 decades. 40-60 miles is about the usable range of the vast majority of FM stations here…unless you’re dealing with 100kW flamethrowers on a high tower or mountain ridge. That would be comparable to the “national” services in the UK/Ireland (BBC services/RTE/ClassicFM/etc). From my experience, most independent local radio stations in the UK/Ireland are fairly low powered/low height, and would be equivalent to our class A stations (or less). So usable range is 10-30 miles out for most of those stations. With streaming or satellite, the coverage is far more universal.

2) Regulation: In most of Europe/UK (and many other countries), radio formats are regulated. One couldn’t decide on a whim because it would make the company more money to make a major change to a radio format. It requires (at the least) paperwork and regulatory approval to do that in most countries. What that means is formats can (and frequently do) come and go from local US airwaves based on potential financial success, not based on what the government, commissions, or even the local community desire. As an example, rock and sports talk are by and large low-ratings formats in the US, but the money made off of it by direct response ads makes it a successful format to the point that it’s a very common format in most towns.

 

[Mido3737]

Apparently yes. There are several factors. One of the tops, as you point out, is that when you pay for radio, you avoid commercials. For some, that's important.

Another factor is the limited range of FM. Some people are long distance commuters, and satellite covers the entire country.

But a growing factor has to do with the limited number of formats available on FM. It's harder to find a lot of niche formats. So for people who live in NYC and want country music, satellite is perhaps the best option.

Still with all that, satellite subscriptions are still less than 10% of the public after 20 years.

Your points are well made just shows that lots people are not happy with Fm services in their area .It fair to say Spotify is out there but that doesn't have the surprise factor that some jocks on air have

 

[Mido3737]

I used to spend hours a day at my office listening to classical and jazz radio. In a way, I paid for that by sending financial donations to the non-profits which provided those formats. Those stations changed formats, so I stopped listening.

So now I listen to streaming services, and the number of hours a day I listen to radio is dramatically smaller.

Great insight all true for niche markets online which fund themselves as income earned is zero apart coffee donations. t

 

[Mido3737]

There are a couple aspects that probably explain why streaming services are popular here in the US:

1) Geography. Americans tend to be spread out and have a much larger mileage distance to commute. As an example, I commute 38 miles/day each way to work. My father is still commuting 55 miles to work each way and has been for near 4 decades. 40-60 miles is about the usable range of the vast majority of FM stations here…unless you’re dealing with 100kW flamethrowers on a high tower or mountain ridge. That would be comparable to the “national” services in the UK/Ireland (BBC services/RTE/ClassicFM/etc). From my experience, most independent local radio stations in the UK/Ireland are fairly low powered/low height, and would be equivalent to our class A stations (or less). So usable range is 10-30 miles out for most of those stations. With streaming or satellite, the coverage is far more universal.

2) Regulation: In most of Europe/UK (and many other countries), radio formats are regulated. One couldn’t decide on a whim because it would make the company more money to make a major change to a radio format. It requires (at the least) paperwork and regulatory approval to do that in most countries. What that means is formats can (and frequently do) come and go from local US airwaves based on potential financial success, not based on what the government, commissions, or even the local community desire. As an example, rock and sports talk are by and large low-ratings formats in the US, but the money made off of it by direct response ads makes it a successful format to the point that it’s a very common format in most towns.

Can't disagree with any off that.But really there is no national radio station in USA and while some station boost to be number One nationally no one can ever claim that crown.What drives listeners away 15 minutes ads per hour is it any wonder more are going online for radio that fits their needs .

 

[davideduardo]

There are a couple aspects that probably explain why streaming services are popular here in the US:

1) Geography. Americans tend to be spread out and have a much larger mileage distance to commute. As an example, I commute 38 miles/day each way to work. My father is still commuting 55 miles to work each way and has been for near 4 decades. 40-60 miles is about the usable range of the vast majority of FM stations here…unless you’re dealing with 100kW flamethrowers on a high tower or mountain ridge. That would be comparable to the “national” services in the UK/Ireland (BBC services/RTE/ClassicFM/etc). From my experience, most independent local radio stations in the UK/Ireland are fairly low powered/low height, and would be equivalent to our class A stations (or less). So usable range is 10-30 miles out for most of those stations. With streaming or satellite, the coverage is far more universal.

Interesting thought, but not the reason.

In the early 30's when the FCC was formed, a number of senators were afraid that if radio stations were allowed high power, the coverage would exceed the circulation areas of city newspapers and thus be a bigger political force than the press. And if companies were allowed to own too many stations, they could influence national politics more than print media, too. So caps were put on power and ownership.

Of course, back then the only places in Europe with private radio stations were Luxembourg, Andorra and Monaco. So the development of radio in Europe was vastly different.

Ireland has about the same land area as Indiana; no single station covers all of that state and, in fact, there are multiple larger markets including the Louisville and Chicago suburbs, Ft. Wayne, Indianapolis, Terre Haute and others that have their own set of FMs with good facilities. Even the national services in the UK, Ireland, France, Spain, Germany and others use dozens if not hundreds of transmitters and boosters to get national coverage.

2) Regulation: In most of Europe/UK (and many other countries), radio formats are regulated. One couldn’t decide on a whim because it would make the company more money to make a major change to a radio format. It requires (at the least) paperwork and regulatory approval to do that in most countries. What that means is formats can (and frequently do) come and go from local US airwaves based on potential financial success, not based on what the government, commissions, or even the local community desire. As an example, rock and sports talk are by and large low-ratings formats in the US, but the money made off of it by direct response ads makes it a successful format to the point that it’s a very common format in most towns.

In plenty of nations in Europe, the regulation is hardly any more severe than in the US. Spain, Portugal and Italy are very free, and even the private stations in France, Germany and Austria have considerable leeway in programming. Others, like France, England and Poland are a bit more restrictive but stations have quite a good opportunity to determine formats and operations.

Rock and Sports don't live off direct response ads to any significant extent; many won't even sell that kind of account. Direct response is more of a TV revenue device, since most TV shows have fixed commercial breaks they have to fill so "PI" (per inquiry) ads are used to occupy the time.

Sports is a highly profitable format because it delivers adult men efficiently. While such stations don't generally dominate the 12+ audience data, they do show amazing strength in 25-54 men and they sell based on those high ratings. There are lots of advertisers who sell specifically to men who don't want their budget wasted on stations that deliver women.

There are different kinds of rock formats. Alternative radio is in trouble because the music genre is in trouble. AAA is too old for commercial stations, so is mostly heard on non-commercial ones. Classic rock is big in ratings and revenue in most markets. And very few run direct response ads in significant numbers.

 

[gr8oldies]

Sports and other male dominant formats have a new revenue stream in sports betting

 

[TheBigA]

Your points are well made just shows that lots people are not happy with Fm services in their area .It fair to say Spotify is out there but that doesn't have the surprise factor that some jocks on air have

The broader picture is this: The music industry used to be a closed system, where the record labels signed artists, produced their records, released them to retail, and promoted them to radio. Now that system has been blown up completely. The retail side of the music industry was the most affected, but also the radio side. So now music can bypass the previously closed system and go directly to the people. Radio is still there, but record labels are also promoting music via satellite and streaming.

Radio has been forced to re-evaluate its business model based on the changes in the music business model. So that's why you see iHeart and Audacy becoming very active in the streaming business, and radio companies getting more involved in podcasting. FM radio is still the big kahuna. It's free and easy to use. But there are limitations, some of which are imposed by outside factors. If people are willing to pay for radio, why not pay for FM? Currently there are laws that control that. But with a weak congress and activist anti-government court, you might see a lot of changes there. Then radio won't be as dependent on advertisers for revenue, and listeners can get the programming they want from FM.

 

[TheBigA]

Related to my above post, here is an article about a Billboard study on changes in music promotion and radio:

Billboard Explores How Working Records To Radio Has Changed.

Promoting records to radio has drastically changed over the years. Today labels executives have data from streaming services and social media to consider when developing their pitch to radio. “We

www.insideradio.com

If the primary reason people listen to radio is music, then its important to understand how the music business works with radio.

 

[Mark40]

When I commuted 66 miles each way satellite radio was appealing. After retirement not so much. Now it's OTA in the car and internet radio and OTA at home.

 

[Don CT]

Interesting thought, but not the reason.

In the early 30's when the FCC was formed, a number of senators were afraid that if radio stations were allowed high power, the coverage would exceed the circulation areas of city newspapers and thus be a bigger political force than the press. And if companies were allowed to own too many stations, they could influence national politics more than print media, too. So caps were put on power and ownership.

Cable news really ruined that plan.