Friday, March 22, 2013

Musings On The Presumed Death Of Terrestrial Radio

There has been lots of talk in the media lately about the anticipated demise of terrestrial broadcast radio, particularly AM. Even the end of traditional AM/FM car radios has been suggested (since recanted). The continued survival of this broadcast medium is of course dependent on how many people listen to it. And the cost of doing business must continue to be affordable.

Broadcast audience figures are always tossed back and forth in the media. Arbitron, charged with measuring audiences of all kinds for more than 40 years, provides essentially a monopoly yardstick to define the numbers of radio listeners in different markets. Accuracy of counts seems to be in continual question, and many challenges to Arbitron's methods and results can be revealed by a simple Google search.

Until 2007, Arbitron relied mainly on a paper diary, or listening "log". Though replaced in 2007 by a electronic device called the Portable People Meter (PPM), the diary method is still used several times a year. Diary logs are mailed to random but interested households, and all members 12 years of age or older are eligible to participate. On a card, the listener records what radio stations he or she listened to throughout a seven day period. Arbitron monetarily compensates the participant.

Daily diary

Survey accuracy concerns and the poor log return rate seemed to be the driving factor to develop the PPM. In 2006 out of 2.6 million diaries mailed, Arbitron could include only 1.5 million in their survey. Not surprising, really.

An interesting PDF exists which tells about the Arbitron diary method.

Portable People Meter

The Portable People Meter is a pager-like device worn by the survey participant. It electronically gathers inaudible codes identifying the source of a broadcast, such as a radio station. Thus, it logs which stations have been tuned to throughout the waking hours, even if tuned to only briefly. Arbitron recruits and monetarily compensates a cross section of consumers to wear the meter for an average of one year and up to two years.

You may like the interesting story, "Diary of a Portable People Meter Person".

Out of all of this, Arbitron produces what is called the eBook, or audience survey. The audience estimates generated from each monthly survey are used as the standard reference of market-share which determine the viability of a radio station to realize $dollars for its current (or prospective) advertisers.

On-air talents, supporters of traditional radio, quote "290 million people a week listen to the radio, the vast majority of which are listening to terrestrial radio" (Doug McIntyre, KABC-790). "Terrestrial radio is listened to by 93%-95% of Americans every week! In fact, radio is the medium that has been least affected by other, newer mediums" (Gary W. Bryan, K-Earth 101).

Arbitron claims on its web site just today that "Arbitron Releases RADAR March 2013 Radio Network Ratings - Network Radio Reaches Nearly 180 Million Persons 12 and Older On a Weekly Basis (dated 3.18.13)". And another, "Radio Adds More than 1.6 Million Weekly Listeners, According to the RADAR March 2013 Report (dated 3.11.13)". RADAR is Arbitron's national radio ratings service that measures audiences for radio commercials aired on more than 50 radio networks nationwide.

I stopped believing in the Easter Bunny many years ago, but that's just my opinion. Regardless of your views on the accuracy of listener surveys or on-air talents, there seems to be a definite feeling afoot that AM broadcast radio is on the wane. To claim that "radio is the medium that has been least affected by other, newer mediums" is absurd. And the listener counts seem highly suspect to me. Perhaps 290 million people "pass by" a playing radio at some point during the week, but that doesn't mean that even 5% of them are actually listening to it. They may simply be "exposed" to it (or "reached" in Arbitron parlance), which is not the same as listening. Arbitron even admits that their counts are "exposure" counts.

From Arbitron's web site:

"PPM (Portable People Meter) ratings are based on audience estimates and are the opinion of Arbitron and should not be relied on for precise accuracy or precise representativeness of a demographic or radio market."

That's reassuring.

I look around my daily landscape and the people I see under 40 years old you are either listening to an iPod device or playing with a smartphone.

The 40-55 year old group seems to be deep into careers or jobs. What percentage of them are actively listening to a car radio on a regular basis? My bet is it's small.

The 55+ senior-citizens group seems to have the best chance of being caught with a radio on, and only because they come from that era where we got our news and entertainment from an over-the-air device like a radio or TV.

But in a few short years that last group will be dead (be nice, I am in that category). They will be replaced by the first two groups and an upcoming group as yet unnamed, none of which has a history of listening to the radio. Then, radio as we knew it will truly be dead. No listeners = no broadcasting. And by no broadcasting I mean broadcasting in the traditional sense: a transmitter emitting RF to a distant listener. Or more likely, radio will eventually assume a much smaller footprint, perhaps mostly streamed over the internet. For one, it's cost effective (no huge power bill, no personality salaries, no brick and mortar), and two, it scales well to a smaller audience. Thus, we have hints of the demise of the traditional AM/FM car radio - to be replaced by an internet "streaming device" - not really a radio. Ahhh, for the warm glow of tubes again....

All American Five (5 tubes)

That brings to mind another question. Does anybody actually listen to a radio in the home anymore? Years ago we had the "All American Five" sitting on every kitchen counter top. If you are over 50 you probably remember it. I used to take one of them to bed every night as a teenager, and it was out of its plastic case - ungrounded metal chassis and all. It's a wonder I wasn't electrocuted. How many people these days have a table top radio or portable or clock radio sitting on a counter in the kitchen or on a bed stand? If so, is it even used? Further, if turned on, is it actually listened to?

TV comedy writer Ken Levine writes in his recent blog entry "Terrestrial Radio Sucks", pointing to today's seemingly attractive alternatives which usurp traditional radio's listener base:

"Now there are literally thousands of alternatives. On iTunes radio there are 543 stations streaming Top 40/pop music. Right this minute a Lady Gaga song is on 523 of them. There’s probably a 24/7 station that plays nothing but Spandau Ballet – and they only had one hit."

Alternatives? Not for me anyway. Sounds more like Chinese water torture: the constant drip on your head till you go insane. What you might gain here with these alternatives are no commercials. Commercials are likely the first reason people are driven away from terrestrial radio, though the argument could be made that modern humans have become so desensitized by commercials and ads that they are automatically blocked from the mind, akin to background noise. Program content now is just the filler for that increasingly short time between commercials and the vanishing three minutes of news (itself interspersed with commercials) at the top of the hour.

The main problem is the world has changed and moved on. If you don't think so, consider this recent scenario which happened to me:

I went into a major chain grocery store one day looking for a local picture post card I could send by mail to a friend across the country. I asked the 18 year old cashier checking groceries if the store carried any local post cards. Her reply: "You should probably check with the customer service desk, they might know what that is." She had no clue.

My gut feel is that traditional radio is like picture post cards. If not slowly on the way out, it is at least headed for some "niche" level. And not likely to come back strong, ever.

What is ironic, however, and runs counter to the naysayers, is that the number of US FCC-licensed AM radio stations has remained almost the same since 1970. Since the peak of 1990, a very small but steady overall decline has been taking place. Month by month, if you follow the FCC counts, we lose a couple of stations. Canada, on the other hand, seems to be on a tear to totally get out of the AM broadcast business. Mexico has even entertained the same idea in recent years.

Year Of RecordFCC AM License Count
2013(March) 4736

But at least in the US, how can traditional radio be in a catastrophic state of demise with all this AM RF still in the air?

Maybe we are devolving into that condition in physics called "Steady-State": the condition of a system when some or all of the quantities describing it are independent of time but not necessarily in thermodynamic or chemical equilibrium. In other words, it's about as messed up as it can be and not likely to change any time soon.

Perhaps listener surveys like Arbitron provides really don't matter anymore, accurate or not. It was calculated a few years ago that e-mail spam needed only one buyer in 40,000 e-mails to be profitable. Send out a billion e-mails and you have sold 25,000 of something. Saturate the market with advertising like we see today on radio and TV and we get the same result. A one hour TV program is one-third advertising. Tune across the FM band at any given time and 50% of the time you land on a commercial ad. I gave up on FM radio many years ago because of this. AM radio is hardly different. Maybe the mass of population we have now is such that it will generate just enough advertising revenue to be sufficient to sustain broadcast radio, regardless of the quality of the program content. Just like the e-mail scenario describes - shoot enough arrows (ads) up into the air and some of them will have to hit something on the way down (buyers). That is, if enough people are truly listening.

Thus, the Steady-State theory. We shall see what happens in the coming years to terrestrial broadcast radio.


gkinsman said...

Hi Bill,

I still listen to radio daily. My Sony ICF-2010 wakes me up every weekday. I listen to my CCRadio-SW in the bathroom when I'm getting ready in the morning, and to my Sangean WR-2 whenever I'm in the kitchen. I also listen when I'm in my car. 90% of my listening is on the AM band. I have way more portable radios than I really need. I'll be 55 this year, so I guess I'm "over the hill".



Hi Gary,

Good to hear from you, and thanks for your input.

My listening here runs about 70% DXing (mostly from my truck radio), and 30% actual listening split between home and the truck.

Most of my DXing on a portable is done from either the Tecsun PL-380 or PL-600.

I should get my Sony 2010 out and blow the dust off!

65 here. Way over the hill and through the woods!


Dick said...

As long as right-wing radio with it's several foaming-at-the-mouth commentators dominate AM radio, I will be absent. I haven't listened to that bandwidth in years.