‘Connection’ helps commercial radio remain relevant: analyst

Broadcast commercial radio remains popular in the face of competition from online streaming services and satellite radio because it’s a “point of connection” for listeners rather than just a music-delivery service, says analyst Jeff Vidler. The latest figures from the CRTC, released Tuesday, showed commercial radio revenues for the broadcast year ending Aug. 31, 2013 rose a quarter of a per cent from the year earlier to $1.62 billion. In its news release, the CRTC noted that radio revenues “remained relatively stable from the previous year despite competition from satellite, online and mobile services.” Vidler, president of Toronto-based media research consultancy Audience Insights, said the stability of radio revenues reflect the role of radio as a medium of connection. Radio provides value through local news and a shared experience, Vidler said. “Streaming services are very personalized,” he said in a phone interview on Tuesday. “It's not the same thing as radio, which connects you to other people. The function that radio serves beyond playing music is it gives you a point of connection, local connections, connection with the DJs and hosts who are on the air, even, with ads, a connection to deals and offers that are out there in the community.” Although most smartphones have GPS capabilities for creating the potential for localized digital content, Vidler said it will be “years” before local radio is supplanted by online services. Radio, Vidler said, is able provide local advertisers with a relevant audience, unlike streaming services. “For advertisers, radio still fills a real need in terms of reach and frequency that other media don't do a very good job of delivering in the same way,” he said. Vidler said that statistics show that 90 per cent of Canadians listen to broadcast radio in a given week, many of them while commuting by vehicle or by foot. Rather than smartphones posing a danger to over-the-air commercial radio because of the vast library of content they have access to, Vidler said, the ubiquity of Internet-connected devices is a huge opportunity for the broadcasters if they stream their content — and their advertising — online. “It's been a long time since people carried transistor radios around with them,” he said. “It's given radio an opportunity to be once again a portable medium.” Some of the more recent smartphones from BlackBerry Ltd. give users access to FM radio. FM radio had $1.33 billion revenue in the most recent broadcast year, up from $1.31 billion in the previous year, while AM broadcasters took in $295 million, down from $306 million, according to the CRTC. Pre-tax profits in the commercial radio industry were $266.7 million in the last broadcast year, down from $367.2 million a year earlier, data from the CRTC showed. It was $241.9 million in FM radio, down from $321.7 million the year before. In AM radio, pre-tax profits fell to $24.7 million from $45.5 million. Independent broadcast consultant Andrew Forsyth said in a phone interview that radio is “doing an admirable job” in adapting to the popularity of the Internet. "It's not like radio hasn't run into this before," Forsyth said. "Radio was around before television, and survived television quite admirably. It was around before the Internet and it will probably survive the Internet as well." — With reporting by Peter Henderson at phenderson@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

‘Connection’ helps commercial radio remain relevant: analyst

Broadcast | June 3, 2014

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