Video was supposed to kill the radio star. At least that's what one-hit wonders the Buggles sang when MTV launched on Aug. 1, 1981. Except it really didn't. Listener levels remained consistent throughout the 1980s and 1990s, once again baffling those predicting the format's demise. Indeed, radio has proven to be a very resilient medium, fending off television, video and portable music players. But now it's facing the toughest challenge yet: a slew of new technologies that will cut into listeners' time and advertisers' pocketbooks. Satellite and web radio are already here. Digital and high-definition radio services are coming. And that's just the start.
It's quite an adjustment, considering radio hasn't changed much since the first commercial transmission in 1920. According to Garry Foster, national director of technology, media and telecommunications at Deloitte, “we're now in the revolutionary era of radio”–something Deloitte has dubbed Radio 2.0. Radio is no longer a single broadcast medium–now, listeners have a broader range of platforms, devices and channels to choose from. And once-local radio is now global, thanks to the web, satellites and broadband wireless.
Eventually, existing radio companies will have to adapt, but by no means are radio station owners suffering–yet. Indeed, advertisers still love radio. For example, Corus Entertainment Inc. posted a 10% rise in radio ad revenue during its first quarter over the previous year, and same-station revenue at 43 of its stations was up 9%. But the warning signs are there. According to 2005 Statistics Canada figures, Canadians listened to the radio an average of 19.5 hours per week in 2004, down 90 minutes from 1995. The decline can be primarily attributed to younger Canadians, who are tuning out in favour of their iPods, the Internet or, most recently, satellite radio, all of which offer massive playlist variety.
Radio veteran Gary Miles, for one, believes teenagers will eventually end up embracing radio as they get older and want information–not just music–and someone else along for the ride. “You can put as many songs as you want on an iPod, but without a face, and a face to put to the brand, you just have a pile of tunes,” says Miles, CEO of the radio arm of Rogers Media, the parent company of Canadian Business. Miles, who started out as a DJ on CKCK Regina nearly 50 years ago, says traditional radio connects with individuals, and that's what separates it from other media as well as radio newcomers.
Radio has long been dominated by personalities, from Alan Freed–credited with naming rock 'n' roll–to BBC Radio 1's John Peel and the CBC's Andy Barrie. However, change is coming, and companies such as Rogers, CHUM Ltd., Astral Media Radio Inc. and Corus have to realize “there will be different distributions that we don't have a lock on,” says Miles. One example is satellite radio, where the XM Canada service brought a new player, John Bitove, into Canada's close-knit media community. The web has thousands of stations to choose from, many of them free of charge, free of advertising and free of bland pop music and drivelling DJs.
Most traditional radio stations are also on the web now, but Astral Media in January took that concept one step further, offering a separate web-only station that allows users to customize the music they hear from a library of roughly 400,000 songs for a fee of $6.99 a month–or listen to preprogrammed genres for free. Radiolibre.ca, says Denis Rozon, vice-president and general manager, “has been deployed to satisfy people who have left or are about to leave traditional radio because their musical needs are not fulfilled [by that media]. We're not competing with it; we're complementary with it.”
Radiolibre.ca only makes sense because of declining streaming costs (according to industry figures, from roughly $1.30 per gigabyte in 2004 to about $0.10 in 2012), but Astral has been active in expanding radio to other platforms. That's partly because not too many traditional stations are up for sale and partly because Astral knows listeners are leaving traditional radio for other platforms. Other companies have been busy, too. Standard Radio and the CBC teamed up with Sirius to launch a satellite radio service in December. CHUM and Astral are still trying to get a terrestrial digital service off the ground, albeit likely one with a different approach than XM or Sirius. While a company such as CHUM is willing to dabble with the idea of podcasting, subscriptions or developing content for national consumption, Paul Ski, executive vice-president at CHUM Radio, says radio is still the company's primary focus. “We have to be careful of picking up pennies when dollars are getting away from us,” says Ski. “We take great pride in the fact that all of our radio stations are locally run, locally managed and locally programmed. That won't change for CHUM.”
Foster sees the web as the high-growth engine for radio companies. The key for traditional radio outfits is to develop new content–beyond the existing mix of news, weather, sports–and extend their brands beyond the local markets using these new platforms. The web and digital technologies allow broadcasters to be narrowcasters, targeting specific groups of people, but they also open up local stations to a global audience and, potentially, a bigger advertising audience. But, as Ski points out, traditional radio is a 24/7 medium that reaches 96% of Canadians for about 22 hours a week, offers dozens of programming choices and prices its commercials at less than other competitive media that reach fewer people. “Every now and then we lose sight of that fact,” says Ski. Radio, unlike the Buggles, might have a few hits left in it after all.