The Baltimore Sun has a great writeup on "good old-fashioned terrestrial radio" and its struggle to stay relevant amid the increasing competition for our ears.
There's some interesting facts and figures in the piece, but one quote that struck me was from a GM at an AM station:
"Because of satellite radio, more affluent people are going to use that service, so we have a smaller piece of the pie to slice up with the people remaining, who are not so affluent," said Bob Pettit, general manager of WCBM, the Baltimore talk-radio station at 680 AM. "The younger people are going to the new technologies. Radio used to be a very effective way to reach people aged 18 to 34. Now, not so much."As a result, Pettit said, national advertisers are not turning to the old medium the way they once did, leaving the field to cheaper, and often local, ad buyers. In turn, the stations are obliged to charge less money because their demographic is poorer, he said, leaving the stations with less revenue.
That whole statement says, in no uncertain terms, "we are competing head-to-head with satellite radio." And it's valid. A decrease in cume numbers means less ears that are hearing an advertisers spot. And when the demos are less and less influential, even the smaller numbers become less valuable.
The savior for terrestrial radio is supposed to be "localism" - because unlike satellite radio, iPods or any other listening medium - only terrestrial radio can be local.
But I think the value of terrestrial goes beyond just reporting the local high school football game scores. If every station you switch to is playing the same song, then what's the point? It's a point that is referred to in the Baltimore Sun article:
"It's cool to hear a reggae channel, but no FM owner seems to dare to commit to one,"
It's not just being "local" that matters - it's being relevant. The only thing preventing terrestrial radio from playing Bluegrass, or Jazz, or Folk music is the corporate old guard who care about nothing other than squeezing the last penny out. But there's a whole new generation of Marketers who don't use the word "brand advertising" in their vocabulary. They use terms like "segmentation," "targeting," and "relevancy" to craft their campaigns.
And Radio is just not appealing to them.
Ryan, I beg to differ on many points here. How can a "Horse and Buggy" compete with a "Horseless Carriage" (Terestrial and Satellite radio) Its not compition ... its the eventual taking over by better technoligy unless a newrer and better technoligy takes over. Hoses never competed with cars.
The points made about the Demographics and add revenue are interesting.
As for Terestrial being relevent. They will alyways be able to advertize the local bands playing at the local pub. Or night club events, but when it comes to playing Raggae? Face it... These stations Must play what brings enough listeners to get enough ratings in order to sell enough on air advertizments to pay the bill. If top 40 pop has the most listeners then in this capitalist economy thhat will wind up being the only format of radio on the air. Just remember the "Old Guard" played the repeditive crap cause its popular. I get bored with it but many more do not and they know that.
Payola? its part of the biz... face it... Terestrial plays Ozzy's new song.. "never gonna stop" ... I think... gosh I love that old song.. "NIB"... I go buy the CD. Record copmany kicks back cash to terestrial.. circle complete.
Satelitte... Plays NIB... I am happy... end of circle.
Satelitte is a change in music listining on such a basic level that IMO has been overlooked.
So, how long before this Baltimore guy's NAB membership is revoked, or Rehr requires him to issue a retraction of his statement to the paper? :)
Hey Ryan, good work on being quoted in that Baltimore Sun article. Nice to see Orbitcast getting some media attention. Shows you're quite the influential yourself. :)