Radio is Switched On Again Strategies for 2020 and Beyond

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The 20,000 Foot View: Just what is radio? Radio is branded and produced show content known best in the form of live (or pre-recorded) broadcast. However, the definition of ‘radio’ is shifting away from the broadcast format and towards the content produced – programmes or shows – made available on-demand anywhere, via radio apps, smart speakers and podcasts. Radio network straplines around the world follow some form of the “radio, music, podcasts” combo. This reinvention of radio has been essential to the sector’s survival, yet takes radio into the dangerous territory of competing directly with music and audio streaming services that have been growing voraciously and absorbing more and more listener hours. 

This report looks at the changing role of music radio specifically, and the sector’s current and future challenges, particularly those arising from the competitive threat of on-demand streaming services. We look at how radio has gone from a tastemaker of new music to a validator, how the recent        pandemic has triggered a radio revival, how radio’s last bastion may be the car and what radio network brands can do to survive and even thrive, in the streaming era.

Key Insights

• Streaming services are looking to steal radio audiences and ad-dollars, they have moved in aggressively on key radio strongholds: the commute, the home (smart speakers), in the car and with podcasts
• The impact of the above has been more than just a gradual drop off in audiences. Radio has seen its reputation as the primary discovery window and tastemaker usurped by streaming
• The growth in apps and radio’s repositioning towards on-demand listening has been accompanied by a commendable effort to hold on to existing revenues 
• The human factor in radio programming and presentation has been clearly demonstrated during the        pandemic and the national ‘lockdown’ isolation periods 
• Radio programmes were trending on Twitter for the first time in years. Radio listening increased (along with news, TV and gaming) at the expense of music streaming services
• The growth of podcasts – together with commercialisation of the sector spurred by Spotify’s entry into the market – is a key factor in driving change in how brands and media buyers are considering audio as an advertising medium
• While radio is doing a good job holding onto revenues, it continues to have four significant worries when it comes to audience behaviours: an ageing demographic, a drop off in total listening hours, a lack of global audience reach and outdated audience measurement
• Radio networks need to develop new business models and revenue sources, a strategy that requires having brands with meaning to consumers across platforms
• For radio to thrive in the streaming era, radio networks need to focus on differentiation in each of the key areas in which they compete: distribution/daypart, audience segments, content personalisation and business model
• Radio is not a subscription business and must evolve its revenues through personalised advertising, and by monetising content through licensing and syndication to tech and streaming platforms

Companies and brands mentioned in this report: A Million Ads, AdsWizz, Bauer Media, BBC, Capital FM, Global Radio, Instreamatic, Magic, NPR, Pandora/Sirius XM, Radio        Radio        RadioAnalyser, Sonos, Spotify, YouTube, WARM