The Impact of Internet and Satellite on the Radio Industry

While the listenership of terrestrial radio — traditional AM/FM stations — remains strong, the radio industry is changing. In part, the demands of younger listeners, who utilize technology for everything from communication to entertainment, is driving this change. In response to this demand, satellite radio, subscription and streaming services, podcasting, and other services have changed the nature of radio.

Who Is Listening?

A 2014 Edison Research survey found that 91 percent of Americans age 12 and older listened to traditional radio each week. In 2015, the number of Americans in the same age group who had listened to online radio in the month preceding the survey went from 27 percent to 53 percent in a five-year period. Of these online listeners, 73 percent used their smartphones, followed by desktops and laptops, to listen to their programming choices.

The Growth of Internet and Satellite Radio

Radio is big business. As an industry, it took in over $17 billion in 2013. Terrestrial radio is one source of that revenue, but other sources include satellite and Internet radio. These major players continue to force growth and innovation in the radio industry, especially in the areas of accessibility and customization.

Unlike terrestrial radio, satellite radio relies on paid listener subscriptions. In exchange for these fees, users get the freedom to choose content within a greater listening range. Traditional AM/FM signals only cover a limited area. Satellite signals, however, eclipse these areas. Because listeners can tune in wherever the signal reaches, they can listen at home, in the office and in the car. Sirius XM Radio Inc., a satellite radio company, was valued at $23 billion in 2014, demonstrating the scope of this nascent industry.

The Internet has also changed how listeners access audio. Through a laptop, tablet, or mobile device, listeners can stream live broadcasts, access previously aired broadcasts or podcasts, and delve into a nearly limitless library of music. Users can listen to songs and programs in any order, at any time. Spotify, an online audio streaming service, gives listeners access to over 30 million tracks, and users can tailor their listening experience to hear what they choose, not what a DJ decides to play. Together, Spotify and its competitor Pandora boast 140 million users. Many listeners pay a subscription fee to further tailor their experience and eliminate advertisements.

Radio Promotions in a Changing Landscape

In this era of changing listenership and technological advances in the radio industry, is there still a need for some of the traditional roles in radio management, such as promotions managers? Like any evolving industry, radio continues to assess the need for certain roles and adjusts those roles to compensate for new requirements.

Promotions managers typically promote radio stations to increase listenership and drive revenue. Although satellite and Internet radio use different formats and offer content differently, they still need people to promote their services and drive business. The tools that promotions managers use and the audience they attempt to engage may have changed, but the results they seek are much the same as they have always been.

Because many of the new radio offerings are subscription-based, there is still a need to market the value of subscription fees to listeners — a task that falls to promotions managers. Satellite and Internet may be forever changing the nature of radio, but the need for innovation to increase listenership and differentiate an organization’s services may be greater than ever.

Learn about the Frost School of Music’s online Master of Music Business and Entertainment Industries program.


Sources:

http://www.journalism.org/2015/04/29/audio-fact-sheet

http://smallbusiness.chron.com/satellite-radio-industry-analysis-79281.html

http://time.com/3906839/spotify-tips/

http://thenextweb.com/insider/2013/11/27/the-future-of-radio/


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