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March 25, 2015

The Evolution of Radio

Radio is going through many changes.

Radio is a powerful, imaginative medium and one which MayoSeitz Media and its clients have always used effectively. However as with almost everything in the business world in general, and in the media world specifically, it is going through change.

In this case the change is gradual but steady nonetheless. First of all, reports of the “death of traditional (terrestrial) radio” are way, way, way overstated. In fact they are false. Terrestrial AM/FM radio sill largely delivered in autos is strong. In fact in a cities and close in-suburbs where the average commute is lengthening it’s an opportunity for greater time spent listening.

However, it’s not news that change in fact been happening which can and over time will chip away at terrestrial radio’s overwhelming dominance. Satellite radio is now 10+ years old and its 27Million radio listening subscribers clearly listen to less traditional radio.

Additionally a recent Wall St. Journal report which predicted that terrestrial radio, which owns 80%+ of car listenership, will lose up to 1.5 % points annually as “streamers” like Pandora and others chip away.

Connectivity is critical in this arena and connected cars, those equipped the 4G technology, will account for roughly 40% of vehicles shipped this year and rising. That does represent a threat over time, but here too with the average age of vehicles on the road lengthening, the impact of 4G connected cars will be a trickle not a tsunami.

So over time as satellite radio continues to inch upward, and streaming services like Pandora and others, still in their infancy in 4G connected cars, terrestrial radio will see some erosion. That makes it critical for terrestrial radio to deliver programming that makes it essential for listeners. Sports, local news, local talk, local personality driven programming may erode less, and more homogenized music formatted stations programming may be more vulnerable.

Time will tell.